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Report: 7 Studios Files Countersuit Against Genius, Alleges 'Unsavory Business'

Report: 7 Studios Files Countersuit Against Genius, Alleges 'Unsavory Business'

April 24, 2009 | By Leigh Alexander

April 24, 2009 | By Leigh Alexander
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7 Studios has levied a countersuit against Genius Products in the ongoing legal battle surrounding Scratch: The Ultimate DJ. It alleges that incompetence and "unsavory business practices" crippled the game -- and caused the very conditions that led Genius to seek an out from its development contract.

Last week, Genius Products filed suit alleging that Activision Blizzard, recent acquirer of 7 Studios, bought the developer in order to block the release of the turntable peripheral-driven music game to prevent it from releasing before Activision's own rival DJ Hero game.

Genius products and hardware company Numark were granted a temporary restraining order against 7 Studios, imposing a 'no talk' order and immediate return of code from the Activision subsidiary.

Now, according to a report from The Cut Scene based on a copy it obtained of the official filing, 7 Studios' countersuit claims that Genius, a DVD distributor making its first steps into video game publishing, bungled the process.

Among the allegations in the suit is that Genius failed to deliver needed music tracks to the developer on schedule -- three months before Scratch was expected to be complete, 7 Studios had received only 25 percent of the total music planned.

According to the report, neither were the turntable peripherals delivered to 7 Studios on time, causing production delays of "several months" -- at one point, Genius was even reconsidering whether to include the accessory with the game.

There were also reportedly plans for a Wii version that never materialized, and the result of all these delays was a monthly spend of $250,000 more than the game's initial $5.5 million budget -- a difference Genius reportedly promised to fully compensate, but according to 7 Studios' allegations, did not, leading to $1.25 million in debt.

Genius also reportedly sought a new developer for the game, attempting to terminate its contract with 7 Studios first because of the developer's insolvency, and later because of missed development milestones.

7 Studios has a vested interest in retaining the contract so that it can keep its proprietary tools as well as royalty rights.

"The promises were made by Genius with the intent to induce 7 Studios to enter into the Developer Agreement, and to continue to develop the game to near completion, at 7 Studios' cost and expense," says the filing as quoted by The Cut Scene, "without adequate support from Genius so that Genius could then take the nearly completed Game and shop it to potential buyers and/or another developer who could complete the game using 7 Studios' substantial, confidential and valuable work product."


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