Hmmm it seems like he should have sued at the point if and when he tried to cash in the stock options at a later date and was denied by the company rather than suing after he had already sold the options. Also knowing how important the nature of his departure was to the fate of his stock options, he should have gotten something official in writing about the nature of his departure. If NCSoft had difficulty doing that, he could have just stayed in his office until he was forced out by security. Of course hindsight is 20/20 but someone is giving this man bad advice.

It is important to note that Garriott is making "constructive discharge" claim against NCSoft. The fact that he wrote that open letter affirming that he left the company for other interests does not destory his case. Nor is it imperative in situations like this to "hold your ground." NcSoft was the one who got the bad advice. Garriot may very well previal. This type of fact pattern begs for a jury trial.

Due to the amount of money in controversy and the amount of litigation costs that could ultimately be ordered to be paid by NcSoft, I expect that a settlement is likely.

I am willing to bet a years worth of W.O.W, monthly gift cards that Garriot got plenty of legal advice prior to the issuance of that open letter. No lawyer in his right mind would have advised Garriott to merely set up a plain old wrongful termination case against NcSoft. What good would that do? Because there were plenty of reasons that Garriott should have been fired: the failure of Tabula Rasa as a business venture and his extended leave of absence to play space man.

Instead, we have a voluntary departure that shows that he was doing just fine at the company couple with the Hobson's choice--and BINGO now we have a constructive termination.

So, he has plenty of hindsight and he has the best lawyers n town.

just because he had to exercise the options does not mean he had to sell the stock. you aren't required to exercise AND sell, just exercise.

he's just pissed because the stock went up 100%+ after he quit (and sold). I would attribute the rise in NCSoft's stock in a material way to his departure because he was a human wrecking ball at that company.

FTM, you're right, technically, but the story Garriott tells goes like this. Just to remind you, exercising options that have a strike price below prevailing prices for a security generates tax liability for the exerciser, so $1 options on a $101 stock result in $100 in taxable income assessed to you, regardless of whether or not you sell a single share.

If that stock then goes to, say, $1 in value on April 1 of the following year, you have big tax problems: $100 in tax liability per share, but no way to generate the tax money you need. This is why one might sell some of the stock one gets on an exercise to cover taxes.

NCSoft: Ordinarily, you'd be able to wait on exercising these options until it's an opportune time for you. Instead, we're setting you up so that you have to exercise your options now. Suckah!

Garriott: I was forced to sell $xmm in options to cover taxes in this short 90 day period, due to you guys being bastards. If I had been able to hold it until today, I would now have $ymm more dollars. Pay up!!

I suspect that Garriott lost his credibility with NCSoft Korea months before he became a Cosmonaut as the overly-hyped Tabula Rasa was delayed, over budget, and turned out to be a dog of a game. Tabula Rasa underwent six years of costly development, which, even at a conservative estimate of $6M/yr development costs would have been $36M dollars, and likely it cost twice as much.

The bottom line was that Tabula Rasa failed to achieve critical mass, selling just over 61,000 copies at US retailers as of September 30, 2008, according to the NPD Group. MMOGCHART.com estimates that Tabula Rasa peaked at ~135,000 users in 2007 and dropped back to some 60,000 players in 2008. At $12.95 month, the MMO would have generated $770,000 revenue in 2008. At that rate, it would take some 20 years to see a decent Return on Investment. Not surprisingly, NCsoft reported a 50% drop in profits for their financial quarter ending September 30th, 2008.

In the realm of any corporate board room, the 'ceo' is the one who takes the fall for such results. NCSoft USA has needed sound business leadership at the helm for some time. MMO games are big business, if they are 'cool' -- but they most also be profitable if the company is to survive to build another game. NCSoft USA's decline in market share, narrow focus, and past layoffs have certainly not helped them attract or keep top creative talent. On top of all that, 60% of NCSoft's revenues are from Lineage II, and most of that is from Korean players. I can certainly understand why those at Corporate HQ saw a need for change.

Everyone knows that when CEO's 'leave voluntarily to pursue other interests,' that they were fired. To save [the departing CEO's] face, many companies would announce that the CEO left voluntarily. But that would not change their content of whatever the termination agreement stated. Sounds like Garriott had the option to keep his options through 2011 or cash them in 90 days. Perhaps he is just suffering from seller's remorse as the markets begin to pick up.

Well, according to Wikipedia, Garriott owns the Lunakod 21 moon rover currently sitting on the surface of the moon, and has used his ownership of the rover to claim the moon in the name of Lord British.

http://en.wikipedia.org/wiki/Lunokhod

So, I don't think he needs to worry too much if things get rough ... he can always just sell his moon rover.

And the moon, if he can find a buyer.

I think you dropped a zero on your calculations on Tabula Rasa, Bill - at 60k subscribers paying $10-ish monthly, it's $7.2 million a year, and scales from there, obviously. Nonetheless, with teams being kept on to expand content and continuing costs for servers, bandwidth, and community management, it was clearly a losing proposition for NCSoft.

Interesting. I hope justice prevails, whatever that means in this situation. I wish I could see the actual claims and NCSoft's reply.

An Dang,

Here is Richard's complaint. http://media.libsyn.com/media/gamepolitics/Garriott-NCsoft-complaint.pdf

Don't have any documents from NC Soft.

Simon, You're right. That's what I get for doing math in my head. :) So, it might break-even in 5-10 years depending on how much development really cost ($36-$50M I would estimate).

Bottom line, it is the same; especially compared to EA's and Mark Jabobs; hit Warhammer Online reaching over 300,000 subs in the last 6 months and still growing.

As I recall from Akamai's crazy options, you can basically be forced to sell your options for pennies to cover the taxes on them. In some cases, the taxes far exceed the worth. It's quite likely he didn't have the means to pay all the tax due without selling some/most of his shares.

As a note, Richard has long since not been in charge of business decisions. His brother was higher in that regard until last year.

in your Tabula Rasa costs you guys are ignoring the mere $50+ M front-end pay to Garriott & Co. for when NCSoft acquired Destination Games. that upfront cost + years of development is the true fully loaded cost. I wouldn't be surprised if the game reached $100+ M in wasted dollars, particularly if this lawsuit is included in it.

and the bottom line is that if this guy performed, generated a decent game and wasn't living in the clouds or in outer space, none of this would have happened. breaking even on total costs would have been a dream come true for Tabula Rasa... !

The Alternative Minimum Tax can hit you pretty hard for receiving stock options as an employment compensation, but that's part of the American tax code. As a British citizen receiving payment from a Korean company I'm curious whether or not he even pays taxes to America in the first place. I'm not familiar enough with tax law to know.

Garriott was once a truly great game designer. But his recent actions are probably best explained by the well-known axiom: "No bucks, no Buck Rogers."

Personally, my feeling is that NC Soft made the first bad choice in enlisting Lord British to begin with. With no deference whatsoever to the venerable Ultima founder, hiring him was like hiring Tom Edison to work on modern power plants today - brilliant back in the day, but things just evolve to fast for the choice of NC in hiring him to be a good one.

Tabula Rasa was a trainwreck - poorly marketed, misunderstood target demographics, improper market sizing and, a game that just wasn't good enough to boot.

They should revamp the interface to display adds and open that sucker up to free play.

Just goes to show you - brilliance then brilliance now.

uh...brilliance then not equal to...brilliance now...that is

While I have held great respect for Richard’s work over the years, yet find his space venture one humongous ego-fest and waste of a great deal of money that could have gone to better humanitarian uses, if he wanted to throw it away like that, in the end I think his departure from NCsoft frees him up to get back to supporting the fans of his original works!