Silicon Knights sues Epic Games

Too Human developer takes Unreal Engine creators to court, saying they broke contracts with licensing partners in order to give Gears of War a head start on the competition.

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Last August, rumors spread that Silicon Knights was ditching Unreal Engine 3 for its long-awaited Xbox 360 game Too Human, because the frequently licensed game engine supposedly ran poorly on Microsoft's console. Those rumors didn't last too long before Silicon Knights president Denis Dyack squashed them in a statement, saying rumors of the group "completely scrapping" the engine were false.

Despite Dyack's statement, those rumors appear to have been partially true, as revealed by Silicon Knights this week in a 54-page lawsuit it filed against Epic Games over Unreal Engine 3. In its complaint, the Ontario-based developer claims that it licensed the engine based on "false and misleading statements" from Epic. Silicon Knights said the Gears of War creator's contractual breaches forced it to begin making its own game engine last May, just before an underwhelming public debut of the Unreal-powered Too Human at the Electronic Entertainment Expo.

According to the suit, Epic "has caused Silicon Knights to experience considerable losses and ultimately has forced Silicon Knights to spend its limited time and resources on building its own game engine rather than in developing its video game." It goes on to say that instead of supporting its licensing partners, Epic has used its fees to develop its own competing products "while simultaneously sabotaging efforts by Silicon Knights and others to develop their own video games."

Epic Games fired off an e-mail to various press outlets this afternoon to address the suit. "This morning we were served with a lawsuit by Silicon Knights," wrote Epic Games president Mark Rein. "We believe the claims against us are unfounded and without merit and we intend to fully defend against them. We'd love to tell you more about it but unfortunately our lawyers want us to save our comments for the courthouse so we're going to do our best to comply with their wishes. In that vein we'd appreciate if our friends in the industry and media would refrain from asking us about the suit because we're only going to say 'no comment.' We just wanted to share the news directly before the rumor mill starts churning."

The suit describes part of the licensing agreement, which called on Silicon Knights to use Unreal Engine 3 exclusively in its Xbox 360, PC, and PlayStation 3 games and advertise them as being powered by the technology. For Epic's part, it had to provide a working engine for the Xbox 360 and PS3 within six months of each system's final development kits being sent out, as well as continued support and updates. For the Xbox 360, that would have meant March of 2006. (The suit notes that Silicon Knights has contracted with Sega to make a PS3 game; originally the title was announced for an unnamed console.)

"That delivery date is significant, since compliance by Epic would have given Silicon Knights time to prepare an appropriate demonstration version of its Microsoft Xbox 360 game, Too Human, for the very important industry trade show, E3, two month[s] later in May, 2006," the suit reads. "Had Epic complied with its promises and contractual obligations, Silicon Knights would have had the opportunity not only to generate a positive press and industry response to Too Human, but also to finish the game earlier and on better financial terms."

Silicon Knights claims it received a working Xbox 360 build of the engine a year after Microsoft's system commercially released. Even then, the developer claims it was not told how to implement the code into its development efforts, and that if they rigged the engine themselves in order to make it work, Epic would not support the altered product. As for the PlayStation 3 version of the engine, Silicon Knights said it is still waiting to receive it, even though the agreement called for it to be delivered in February.

The studio also attributes the delay of Too Human from its 2006 release date to Epic, saying it "faced pressure from its publishing partners to nonetheless move forward with development of its games, and with respect to one of those partners (Microsoft), to complete its game as early as possible in 2007." That alone has cost the company millions in labor and potential profit, according to the suit.

As for Epic, the suit claims the company was perfectly able to make a workable version of Unreal Engine 3 for E3 2006 to show off its own Gears of War, but withheld the technology from its partners for its own advantage. When pressed for the updates and engine tweaks that allowed Gears of War to run well, Silicon Knights says it was told those updates were "game specific" enhancements not covered by the agreement, as opposed to an "engine level" update that would be covered.

Silicon Knights claims those partners were stuck with an Xbox 360 engine that was unable to handle multicore processing, subject to long load times, inefficient memory usage, and crippling slowdown. The developer further claims that Epic would ignore its requests to correct those problems unless doing so would also benefit the development of Gears of War. It also said Epic consistently advised licensees to code things like particle effects in one manner, while at the same time using a completely contradictory method in Gears of War.

The suit accuses Epic of a number of misdeeds, including fraud, negligent misrepresentation, intentional interference with contractual obligations, breach of warranty, and unjust enrichment. Silicon Knights is seeking to have the contract between itself and Epic Games declared null and void and be refunded all of the money it spent to license Unreal Engine 3. The developer also wants to be awarded punitive damages for the offenses it alleges Epic committed. Finally, the studio is asking that Epic be forced to surrender all profits garnered by Gears of War as a result of misconduct.

"That advantage was nowhere more evident than at E3 2006, where Gears of War was awarded 'Best Game in Show' and garnered nothing but laudatory press," the suit reads. "By contrast, Silicon Knights--one of the only other developers to publicly display a playable demonstration of its game--saw Too Human roundly criticized in the videogame press for its technical problems and generally unpolished appearance. The damage to Silicon Knights caused by Epic's misconduct was manifest, because E3 attendees were able to compare Too Human with another game running ostensibly the same game engine, Gears of War, with vastly superior results."

The suit says that the new engine, which it simply refers to as "The Silicon Knights Engine," is built on Unreal as per the original agreement, but improves considerably on the technology. Furthermore, after the release of Too Human, all Epic code in the engine will be removed.

[UPDATE] Silicon Knights president and founder Denis Dyack released a statement about the suit, saying, "Our strong preference is to focus on making games, not be in court. Unfortunately though, as explained in our lawsuit, we have had extensive problems with the Unreal Engine 3 that Epic has been unwilling or unable to rectify. For more than a year, we have been trying to reach an agreement with Epic to resolve these issues without resorting to litigation, but were unable to come to reasonable terms with Epic. ... No doubt Gears is a fun and phenomenally successful game, but as we alleged in our complaint against them, we strongly believe that from the perspective of someone waiting for a game engine that Epic promised it would deliver almost two years ago, it seems pretty clear that Gears was built on the backs of the Unreal Engine licensees. We certainly stand by our allegations in the lawsuit that instead of using our licensing fees to develop and support the Unreal Engine 3, Epic used that money to build Gears."

Discussion

1003 comments
Nodashi
Nodashi

[quote] packernation31 That's a shame that gears was made from an engine they didn't even design, it's a great game [/quote] Most of today shooters and even RTS games are made using sold engines nowadays, man. It's not any kind of dishonor, just gives the developer time to fine tune a great game. Games are not only the engine, they require a TON of work, from artistic design and choices to sound effects to direction to interface...

oldschoolKEN
oldschoolKEN

Its seems Silicon Knights will come out the winner, in a matter of speaking. If they settle out of court or win the case they get themselves that game engine (woot), and if they win then they get more money to make the game. The situation does seem fishy on Epic's part, but let's wait to see some more facts.

Icarusmk3
Icarusmk3

What I find strange is how a game as great as Bioshock was made by that "same" Unreal Engine 3, and they didn't have a problem. I'm guessing SK screwed up and wanted lay the blame on someone else.

packernation31
packernation31

That's a shame that gears was made from an engine they didn't even design, it's a great game

street2958
street2958

@thekey Just so you know, you completely discredit yourself when you use a $ in the spelling of Microsoft.

Ra-Devil
Ra-Devil

The Killzone 2 Demo? You mean the one where the guy had to keep pressing the button to open up the satelite dish to shoot it, like, every 15 seconds? That Killzone 2 Demo? Because that looked like Bullsh**. There was barely any shooting, the whole destroy dish thing was utterly stupid, and the graphics were the only high point. If the game turns out to be like that, no way it'll get an 8.5. Maybe an 8.0, but that's REALLY pushing it for gameplay that boring looking. They better release a Demo that, you know, involves shooting lots of things, otherwise it's dead in the water.

thekey
thekey

Smoothnzerozeronoodle "360 is the weaker hardware. Epic and M$ want to deny other parties' the access to Unreal engine technology. M$ was on their knees to Epic. Then Killzone2 showed up.. I respect Sony's "don't reply on anybody" policy. In two years' time, Sony closed the gap between them and the leader. The biggest threat to Epic is the cellchip and Killzone2 engine." Rrrrrrrrriiiiiiiiiiiiiiiggggggght! Killzone 2 is going to be a dude. mock my words. The Demo looked great, but lets see if it looks that good when it ships. In fact let's see if this game gets a 8.5 or higher on Gamespot. LOL!!!

darkhand44
darkhand44

Personally I was actually looking forward to Too Human last E3 I am kind of now getting inpatiant. I think it really at first look seems like a really cool DMC in the future thought that it would be cool why can't Silicon Knight's deal with what they have and make the game.

Furan-San
Furan-San

One word - Ouch! At least GoW looks good and runs smoothly, I'll be waiting for GoW2 for the 360 though. :D

alidius
alidius

Jamesh-42, others...my mistake , read too much into the forum and mis-read that portion of the article. We'll see how it develops and whether other licensees somehow get involved.

jamesh-42
jamesh-42

The story doesn't say that all profit from Gears of War should be surrendered. It says that all profit resulting from the misconduct should be surrendered. They are essentially asking the judge to estimate how much Epic would have made off Gears of War if they were playing fair, and fine them for any profits above that level. It also doesn't say that the money should be paid to Silicon Knights. I assume that Epic has many licensees, and if they are in the wrong then it would probably be at the expense of all of them.

wars45
wars45

donsnt matter unreal 3 will be better than gears of war love ps3

onenonle
onenonle

It seems to me that Silicon Knights is pulling the lawsuit card to prevent or hinder Epic from producing more games (Gears 2 ?) that would lower sales of there upcoming endeavors a la Too Human.

Alucard7321
Alucard7321

Reminds me of Jeremy Soule. Tsk tsk, yanks and their lawsuits!

Swift18
Swift18

I Don't doubt it at all. Also i never saw the part that said they should hand over all of Gears Revenue i actually never saw a price on any thing lol. But any way i don't doubt it i think epic screwed them over and they have every thing in contracts so they will win also tell tail sign is the fact that Epic wont talk at all. OJ any one? lol. I mean just the fact they never delivered the ps3 stuff is pretty indicative of corporate sabotage. So will see but i see the big W going to SN.

alidius
alidius

I agree with Tekkor on this. I think that if SK can prove that Epic was contractually bound to provide code, assistance, PS3 dev kit, etc on a certain date and it did not happen, then Epic probably breached the contract (seeing the exact terms would help). However, asking Epic to hand over all the profit of GoW is just unreasonable. As said below, good chance this is settled out of court. Both companies reputations are on the line, to a degree. Epic will want to assure the other liscensees of the Unreal 3 engine and SK will not want to appear litigious. (Sorry for the long post).

MysticDynamite
MysticDynamite

So Epic is essentially competing with a possible partner. What a world...

Mousse420
Mousse420

DURR EPIC IZ BETTAR BCUZ I LYKE GEERS UV WAR~! Seriously though, Epic violated their contract. Assuming the allegations are true (The PS3 UE3 SDK being late seems easy to prove if nothing else) then SK has every right (legally and ethically) to sue Epic for all they can. No surprise the fanboys side with the game that's already out & popular, while rejecting the game they haven't played yet.

BlackKobra94
BlackKobra94

Epic is better. Epic is not guilty. SK is just saying that cause they just to make a better game than GEARS OF WAR. Well i forget that. if they want to make a game that they think its better. Be my guest. But its never going to better than GEARS OF WAR. anybody agree?

MrLemur
MrLemur

Most telling statement in the article: *The suit says that the new engine, which it simply refers to as "The Silicon Knights Engine," is built on Unreal as per the original agreement, but improves considerably on the technology. Furthermore, after the release of Too Human, all Epic code in the engine will be removed* Now that they have reversed engineered the UE3 engine to builld their *own* game engine - they want their money back plus interest. Yeah, SK are such victims.

WjenningsB
WjenningsB

""...instead of using our licensing fees to develop and support the Unreal Engine 3, Epic used that money to build Gears" Well NO KIDDING, they are fees, not donations." -Swudeson So your saying if you went to a store to buy a camcorder, and instead of the store giving you the camcorder they used your money to make their own movie to sell, youd be cool with that?

Tekkor
Tekkor

After reading through the full complaint I can say you guys all calling SK whiners and defending Epic are a bit off base. Im telling you whats going ot happen on this and i dont need a crystal ball to do it. Epic is in the wrong here. They have not delivered items they signed a contract to deliver. They promised the PS3 development engine within 6 months of system launch and SK still has not received it. I can tell you what will happen though. A few months from now you will read another news update saying they settled out of court for undisclosed amounts etc etc. Epic will refund them all the money they paid and maybe throw them a bone of an extra 50% or something of the amount they paid in or some nonsense. I like Epic. I love GoW and have played it tons. But in regards to this suit it sounds to me like SK has a legit gripe. Yeah other companies have made do maybe just fine with the engine. Maybe they received more support from Epic because they kicked more money into the pot or Epic likes them better....who knows. Obviously SK tried to get assitance and help from Epic and Epic just blew them off. So SK finally got pissed and filed suit. Sounds legit to me regardless of if Too Human is going to be good or not. I could care less.

Swudeson
Swudeson

-All profits from Gears of War is completely unjustified. That game came out WAY before this game will launch (if it ever does). -To me, sounds like a case of the ol' JEALOUSY factor. -I've seen this game run on 360 more than enough to say that it works AMAZINGLY! -"...instead of using our licensing fees to develop and support the Unreal Engine 3, Epic used that money to build Gears" Well NO KIDDING, they are fees, not donations. -Welcome to life SK, it's rough. Just because they gave you something that you didn't know how to use correctly isn't their fault. -Ignorance is no reason to sue, just pick up the phone! Yes I know, i'm 100% backing Epic in the comment, because they have deserved it by producing AMAZING games and the UNREAL engine! I still wanna know exactly what the suit says, and what both companies agreed to originally. Until I get that info, I wish Epic the best! I was considering looking at Too Human as a purchase, but this suit isn't exactly pleasing me. (i'm sure i'm not aline there) ~Ben Baczenas

malmeid2
malmeid2

decoy1978 said: "but no one sues for the hell of it" --------------------------------------------------- There's this stuff in the United States that everybody wants, and wants alot of. Me and my friends call it money. 8)

jvonrader
jvonrader

brownbrucelee, Epic didn't want to charge for the maps. Microsoft makes them.

decoy1978
decoy1978

Maybe your right CMcCon342, I do think Silicon Knights is just plain bored and to pass the time they just love to sue other developers for fun. This suit was more of a LACK of support for the engine they purchased rather selling them a shoddy product. If you bought a used car and the car came with a warranty, when ur car breaks under warranty your EXPECTED to get help. I'm not casting any blame on Epic, but no one sues for the hell of it. There has to be some truth in this...

---n00b_kid---
---n00b_kid---

Gears has sold triple platinum, over 3 million units worldwide. That is a huge profit made by Epic and SK is asking for all that money !!

CMcCon342
CMcCon342

Rainbox Six Vegas, Mass Effect, Blacksite, Turok, BioShock, Medal of Honor: Airborne, Brothers in Arms: Hell's Highway, Frontlines: Fuel of War, Lost Odyssey, RoboBlitz, Stranglehold, Huxley, Hour of Victory...why exactly is Silicon Knights the only company complaining about Epics support for Unreal Engine 3? Perhaps they are the problem, not Epic.

CyruzDraxs
CyruzDraxs

UE3 has been available for quite awhile now. Look at Blue Dragon, that game has had in game footage available for quite awhile now and the game itself has been available in Japan for a few months. And what about Mass Effect? With the release date it has it is obvious that the engine has been in there hands for much longer than Silicon Knights claims it has been available for. The game is enormous...no game of that size could have been made in this short of a time frame. They claim that their game looked unpolished for the E3 demo, but that could only be attributed to them. I would understand if it was just a few glitches or a bit of slowdown, but if the game itself behind the engine looks like crap it's your own fault.

CMcCon342
CMcCon342

Epic actually wanted all of their new content to be free, Microsoft insisted it not be because they don't want other companies to follow their example.

brownbrucelee
brownbrucelee

Come on, we all know that Epic is a money grabber. Look how much it costs just for two maps in gears.

Mousse420
Mousse420

Fanboys have a tendency to grossly underestimate the amount of effort that goes into making a game. "waah, why dont they do this, why did they do that" Because it's not easy, silly. Epic did indeed screw over SK, assuming their allegations are true (the delay on the PS3 SDK seems easily provable, if nothing else) , and sabotage like this is a big problem in the already very big and challenging process of developing a game. Fanboys love to criticize, but none of them are making any games at all.

alzdaman
alzdaman

After reading the full suit, they have a winning battle against them. It was less about the fact that Epic gave them a bad engine and more of them refusing to support the engine they orally and contractually agreed to support.

terrabreak13
terrabreak13

I call BS on this one. I don't see other companies like Bioware crying foul. Mass Effect won best of E3 last year running the UE3 and this was before Gears of War dropped. Silicon Knights want to blame someone else for their shortcomings. The art direction of Too Human is also very poor. The greatest engine in the world couldn't help those characters designs.

maxxorz
maxxorz

Silicon Knights are just trying to pre-justify why their game is going to be much more lame than people expect

RW_66
RW_66

I have read the PDF of the full complaint. Epic made a lot of promises, both oral and written, of what their Unreal 3 engine would do and when they would be availible. The fact remains that 'GoW', which was specifically designed to showcase the U3 engine and the 360, is NOT the same engine that Epic has given to their licensee's. It handles most thing's differently, and in a few cases almost totally opposite, of what is included in their released engine. When licensee's asked for the optimised coding that was used in GoW, Epic responded by saying it was all "game specific" and therefore, not part of their developement package. Needless to say, this has left a sour taste in the mouths of all the companies that spent big money for their "multi-platform" solution. SK, and perhaps a few others, feel that Epic used their licensing fee's to fund the developement of GoW, and is now renegging on their developement and support for their (U3) engine. SK has pointed out that the U3 engine, as is, is totally unoptimised for either the 360 or PS3 and therefore is not fulfilling it's contractual obligations.

Ellipsis667
Ellipsis667

Too Human seems doomed to me. The creators talk it up so huge but every time they show me something it just dosen't really impress me that much. Honestly, I'll bet this game won't be that great when it comes out in a thousand years because silicon knights has had to focus on everything surrounding it. Not the actual game. Good ideas and passion got too much bullspit smeared all over them. Just can't get the stink off now.

Toribor
Toribor

Ooooh... Epic you dirty dirty dog... Taking money and then using it for something else entirely! Bad!

WR_Platinum
WR_Platinum

If I made a title for this story i would put: "When Business In The Game Industry Goes Wrong" oooh Epic is in trouble.

Mousse420
Mousse420

LOL @ gungriffon thanks for listing all the weapons for us you wierdo. Anyway, I think this lawsuit sounds perfectly valid. The fact that they were promised UE3 for PS3 6 months before its launch, and still haven't gotten it yet, sounds like at least one violation which should be easily provable, let alone all the other complaints which sound perfectly valid. To all the people calling Silicon Knights "whiners", "jealous" etc, you don't seem to understand - Epic signed a CONTRACT with them, which they VIOLATED. That means they WILL be sued and it is entirely reasonable and within SK's rights to do so. I agree that asking them to surrendur all the profits sounds extreme, but if somebody screwed me like this, I'd want to take them for all they're worth too. Epic should have known better, and their doing business like this is detrimental to the game industry. We have few enough good games coming out already without developers sabotaging each other.

diablobasher
diablobasher

floaters: They aren't asking for the profits from gears. They are suing for damages, and asking that the profits be surrendered, the profits would either then be poured back into the correct place (development of the engine) or something else that i dont know about. But lets get this straight, SK are NOT asking to be given gthe profits. That is one thing people seem to be misunderstanding. Either way it is a little ludicrous, even if Gears was made on the backs of other licensees.

dlivian
dlivian

I guess this is the end of the Too Human Trilogy, If they dont get the money they cant affort it, and if they get the money they have to start from Zero since they are using the Unreal Engine, so the have too start all over with another engine... When was the last time SK got money from a game?

necronom_iv
necronom_iv

how the hell does a company like silicon knights make any money?

bear1961
bear1961

[This message was deleted at the request of a moderator or administrator]

bear1961
bear1961

gears of war really does suck anyway, so i dont care.

floaters
floaters

Apparently some people don't know what an "engine" is thus don't make sence in thier comments but with regard to the article from what i see Silicon knights isn't wrong but they are a bit too greedy in what they are asking for i mean c'mon 100% of the profits from gears of war + damages is a bit eccentric to me but hey if you sold me a crappy engine so that you could make your game better then hey I'd want my cut too

quietguy
quietguy

[This message was deleted at the request of a moderator or administrator]

buffdaddy69
buffdaddy69

Smoothnzerozeronoodle "360 is the weaker hardware. Epic and M$ want to deny other parties' the access to Unreal engine technology. M$ was on their knees to Epic. Then Killzone2 showed up.. I respect Sony's "don't reply on anybody" policy. In two years' time, Sony closed the gap between them and the leader. The biggest threat to Epic is the cellchip and Killzone2 engine." The 360 hardware is not weak at all. the system with the weakest hardware is the Nintendo Wii. I own both the 360 and the Wii and i would say that the Wii is the weaker one out of the three. I own a PS3 and i played it for about 20 minutes, and didnt really notice a difference graphics wise between the 360 and the PS3. The only difference i saw was that the PS3's games were more darker then the 360's...which is what made me unhook my PS3, put it in the box, then put it out in the garage and wrote on the box "DONT OPEN UNTIL METAL GEAR SOLID 4 COMES OUT" but to say the 360 has the weaker hardware is retarded, when the Wii is cleary the weaker one when it comes to gameplay and graphics. Sure its motion sensored, but its not advanced enough yet to where it'll only function with certain motions like it should. Instead you just wave the Wiimote around like an idiot until you hit something, or defuse a bomb. I played SPiderman 3 on the Wii and they couldnt even fit the entire game on the Wii version.