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Garriott sues NCsoft for $24 million

Famed Ultima creator/space tourist accuses former employer of breach of contract, fraud stemming from "involuntary" departure from company last year.

Only a few short months after having launched Tabula Rasa in 2007, Richard Garriott discovered that he had been selected to live out his own sci-fi fantasy by journeying to the International Space Station. The trip, which occurred nearly a year to the day after launching his first massively multiplayer online game, cost Garriott in the range of $30 million. Now, the famed game designer may have found a way to pay for another trip to orbit.

Richard Garriott

Richard Garriott

Yesterday, Garriott filed suit against NCsoft in the United States District Court of Texas, charging his former employer with breach of contract and fraud that he claims cost him more than $27 million. According to the complaint, Garriott is now seeking $24 million in damages.

The charges stem from Garriott's departure from the company in November 2008. Though it was initially characterized as an amicable resignation, Garriott now claims that he was fired from his position at NCsoft, a move that resulted in him having to prematurely exercise a number of stock options that he was awarded when the Korean publisher purchased his company Destination Games in 2001. Two weeks after his departure was announced, NCsoft said that it would be shutting down Tabula Rasa, effective February 2009.

"In or about November 2008, Chris Chung, president of NCsoft's North American operations, informed Mr. Garriott that NCsoft had decided to 'part company,'" reads the complaint. "Although Mr. Garriott objected to his dismissal, Mr. Chung insisted that the decision was final--Mr. Garriott had to go."

The suit goes on to note that Garriott received this information while still in postflight quarantine after having returned from the ISS, and the open letter announcing his departure from the company posted to the Tabula Rasa Web site purportedly penned by Garriott was in fact written by NCsoft.

"As Mr. Garriott prepared to leave NCsoft, however, Mr. Garriott learned that NCsoft had internally recharacterized his termination by Mr. Chung as a 'voluntary' resignation," the suit continued. "This mischaracterization had profound and detrimental effects on Mr. Garriott's stock options: If NCsoft terminated Mr. Garriott's employment (which it did), then the options--worth tens of millions of dollars--would remain in effect until 2011; but if Mr. Garriott resigned voluntarily (which he did not), then NCsoft might have terminated those options--worth tens of millions of dollars--within ninety days of his departure." (Emphasis in original.)

The suit goes on to state that despite Garriott's attempts to redress the issue with NCsoft, he was forced to exercise his options within the 90-day window, lest he lose everything. "This forced exercise caused Mr. Garriott to lose the remaining 2 1/2 years of his option period and forced him to sell into one of the worst equity markets in modern history," the suit reads. The sale also resulted in "hundreds of thousands of dollars" in costs and tax liabilities, according to the complaint.

NCsoft had not responded to requests for comment on Garriott's suit as of press time.

104 Comments

  • angelcar

    Posted Aug 14, 2010 8:38 pm GMT

    @DynV
    Neither of us was part of the legal teams, so we can;t really say what did or didn't happen. Al i can say is that based on the results it seems that Garriott had valid claims.

  • angelcar

    Posted Aug 14, 2010 8:37 pm GMT

    @ Adam_the_Nerd
    What does his trip to space, or that he ha money have anything to do with the validity of his claims to money owed to him by NCSoft??

    I can't understand why some people are so p-o'd at the guy...

  • DynV

    Posted Aug 6, 2010 1:17 am GMT

    @angelcar I still can't believe there was no injunction to have his departure status contested in the first place... I wonder if his lawyer even studied such cases beforehand.

  • angelcar

    Posted Aug 5, 2010 6:15 pm GMT

    @DynV

    Yes, Garriott won the case. They awarded him $23M or $26M. I can't remember the exact figure.

  • DynV

    Posted Jul 31, 2010 12:15 am GMT

    @angelcar Is there development on the case? If not I don't understand what there is to regret.

  • Adam_the_Nerd

    Posted Jul 30, 2010 10:59 am GMT

    I understand being forced to sell your shares is not that great, but he profited and got to go on a space trip, meaning his 7 years at NCSoft has obviously fattened his wallet. This lawsuit is just ridiculous and I no longer hold respect for Garriot, or anyone obscenely rich enough to go into space, that still demands more.

  • angelcar

    Posted Jul 30, 2010 12:20 am GMT

    @DynV

    I guess you're eating your words now.

  • DynV

    Posted Jul 7, 2010 2:58 am GMT

    This sound ridiculous! This men is a millionaire, surely he has a (if no many) lawyer thus should have know that he could have contested the terms of departure and filed a injunction. I really doubt this suit will hold if there wasn't such an attempt or proof of major difficulties blocking due process.

    This has a smell of "Girl has 56 stars tattooed on face after 'falling asleep'"...

  • runstalker

    Posted May 11, 2009 3:49 pm GMT

    Sure, he had around $12 million in subsidy from other parties, but that still means Garriott blew $18 million of his personal fortunes on that elitist space trip. Then months go by where we hear nothing from Garriott. If this departure was indeed recharacterized by NCsoft, why did Garriott wait this long to start desperately scrambling for his Options, and make it all public? Because he's going broke, that's why. The years of Ultima IP royalties post-EA/Origin that he's been sitting on, combined with the way-too-high-valued salary NCsoft was giving him, have at last dried up. Oh well, if you're headed for financial ruin, might as well leave the planet first. And abandon your fans.

  • decoy1978

    Posted May 11, 2009 12:28 pm GMT

    Honestly, that game sucked so much. I knew when they had that one guy in E3 dressed as a wizard promoting the crap out of the game that it was in serious trouble.

  • ottumatic

    Posted May 11, 2009 12:17 pm GMT

    @DaylightX
    Now you've mentioned it, it is indeed very strange that he chose to file the charges in Texas of all places...

  • sigerzx

    Posted May 11, 2009 5:40 am GMT

    Wow thats a bit much lol

  • DaylightX

    Posted May 10, 2009 6:59 pm GMT

    Question you've got to ask is, why now? Why didn't Mr Garriott call NCsoft out when the alliged fraud actually took place. Like maybe goto the media and go "hey, I didn't write that letter to the fans on the website!" Like, couldn't someone as smart as him think of something so simple? His delayed reaction is really making me doubt the validity of the whole issue. Be interesting to see how this whole thing turns out.

    Other than that, Texas sure is a popular place to file suit against big Asian companies.

  • bobbysbits

    Posted May 10, 2009 5:08 pm GMT

    he's not worth "ten's of millions."

    and he didn't pay for the space flight all by himself.

  • Haplo699

    Posted May 10, 2009 1:29 am GMT

    If he can afford to blow 30m on a trip to space then what's a couple of hundred thousand dollars. We could designate it a responsible use of fortunes tax...

  • SephireX

    Posted May 9, 2009 4:16 am GMT

    Well once Guild Wars 2 is good, I'll be happy. I loved the first one but the expansions were not amazing. Though I hope its an actual MMO this time and not an 8 player co-op game. As for Garriott, I couldn't care less!

  • Alex_09

    Posted May 9, 2009 12:20 am GMT

    Come on Kelemhuma, his name has been repeated about 10 times in this article.... It's Garriott. I'm not a spelling douche like most of the elitists on the internet, but your spelling seems fine after you butcher his name.

  • Kelemhuma

    Posted May 8, 2009 9:02 pm GMT

    Richard Garriott has my respect for bringing amassing adventure games when computers had as little as 64 k. Really I loved Ultima 3 4 and 7. Seven required better computer though 386 I think. Good old Lord British. By The same token any guy that has 30 million to piss off for a space flight does not deserve crap. I hope he loses. Sorry Garriott just my opinion.

  • getondees

    Posted May 8, 2009 12:49 pm GMT

    I use to play ultima online..I loved it.Tabula was just a attempt to cash in like blizzard has been and still is.Mr. Garriott...just go back to space and stay there please.Whether it was Nc,or you that had my hopes up for a little while if anything thinking you were going to make a great product,and waste my money ,and all the time I have read anything to do with you or this whole project that came out to be just a bunch of bs.Your credibility is with UO still and thats where it will stay.Anything else you do ideas, whatever..let the nasa community waste there time reading it.Leave all the gaming stuff to people that "have a lifetime dream"of making great games.Your heart was not with "Tabula Rasa" and thats why it failed.As far as nc soft is concerned..I am a fan of GW so those guys have my respect and I am looking forward to GW2.Just my OP.

  • nevryn

    Posted May 8, 2009 10:28 am GMT

    Personally, I'm glad he's suing those jerks at NCSoft. They have an incredible ability to eventually ruin every game they put their hands on. I have no doubt that they forced TR out early and vetoed many of RG's plans. They're an evil Korean company, and make crappy MMOs. They deserve to be sued.

  • jemoedr

    Posted May 8, 2009 8:34 am GMT

    Still to bad that they closed the servers. Tabula Rasa was a great game

  • leoleez

    Posted May 7, 2009 10:23 pm GMT

    lol!

  • nappan

    Posted May 7, 2009 7:42 pm GMT

    @Drosa: I never understood why we're all willing to buy broken products. Very few other experiences in life are similar... except possibly a long flight in Coach...

  • Drosa

    Posted May 7, 2009 7:34 pm GMT

    Wow. I feel like I need a tetnus shot after reading some of these posts. You guys are taking this video game stuff way to seriously. Developers and distributors have been selling us broken games for years. Why get mad about it now? If NC Soft did as he claims then they do owe him. The judge and jury will deside.

  • DieselCat18

    Posted May 7, 2009 7:11 pm GMT

    I'm holding up my hand and rubbing my thumb and forefinger together, which signifies Mr. Garriott, that it's the worlds smallest violin and I'm playing it for you ! ....Boo Hoo !
    Richard Garriott should be made to pay back each and every person the money they spent (that includes myself) on that piece of garbage "Tabula Rasa", then go and crawl back under what ever rock you were living...better yet, go back to the ISS, I'm sure they can use someone to clean the toilets up there.....

  • javalino

    Posted May 7, 2009 6:21 pm GMT

    I am not a expert in stock exchange, but i know something, when you exercise an option before the expire date , you wil get the proportional income. you will not loose anything. About the taxes and fees, dosent matter in witch time you exercise the option , you always pay. i dont know if Garriott (or his lawyer) is wrong , or the information here is not enough to conclude something. Anyway, the conclusion is simple, i will not buy anything with the name Garriott.

  • AceJakk

    Posted May 7, 2009 2:45 pm GMT

    greedy bastard - as though he hasn't made enough money - sure the company may have breached the contract, but in the current economic times, that money that he wants for himself is better spent within the company ensuring the jobs of many. Trust me Mr. Garriot - your slut daughter doesn't need an Audi R8.

  • X-RS

    Posted May 7, 2009 12:09 pm GMT

    i just realized this man lived out my childhood dream as an astronaut as well my adult one, making games.

  • ranbla

    Posted May 7, 2009 12:03 pm GMT

    They should counter-sue... he made a crappy game. He deserved to be fired.

  • wahyudil

    Posted May 7, 2009 8:57 am GMT

    hmmm .... garrior live is full of closing and departing I guess ...

  • DangerClown

    Posted May 7, 2009 6:15 am GMT

    Gotta pay for his space gas, I guess.

  • AnarchyRising

    Posted May 7, 2009 5:32 am GMT

    Though i agree with quickchord, having lived in my car before (and under a bridge haha), i would be pissed if someone wrote a hugely read "letter of departure" and claimed it was me who wrote it... though im not a multi-millionarie so i cant put myself in his shoes.. i struggle with bills and can't fly to the ISS on a whim.

  • quickchord

    Posted May 7, 2009 2:31 am GMT

    People have lost their homes, cars, etc. and this $%^& nut is worried about freakin stock options? He should try living in his car for a few days... Well maybe not that might make things worst. I just hope NCSoft doesn't have troubles with GW2

  • aura_enchanted

    Posted May 6, 2009 10:29 pm GMT

    opportunistic backstabbing son of a B!tch im gonna kick some tail when i get home.

  • taisui posted May 6, 2009 9:04 pm GMT (does not meet display criteria. sign in to show)

    taisui

    Posted May 6, 2009 9:04 pm GMT (hide)

    Bogus. NCSoft should countersue Garriot for false advertising, a. la. "Great Game Designer." Both Garriot and NCSoft suck anyways, though I'd argue that NCSoft sucks a tad more because they actually hired Garriot, thus the real sucka here.

  • firehawk998

    Posted May 6, 2009 8:39 pm GMT

    Well heres me wishing Mr Garriot that he wins his lawsuit. Though I agree with zintarr and NandoSupes. If that $30 million would have been spent on the game. He could have flown to space atleast 3 times.

  • RockySquirrel

    Posted May 6, 2009 7:59 pm GMT

    Tabula Rasa sucked... take it like a man!

  • NandoSupes

    Posted May 6, 2009 7:04 pm GMT

    @zintarr

    I agree with you on this one,instead of using the money to fix the TR game
    issues, Garriot decides to blow his money on a trip to space.

    now, I'm not saying that going to space is a once in a lifetime experience,
    but that money could off been used towards the quality of game.

  • zintarr

    Posted May 6, 2009 6:28 pm GMT

    Hey Lord British, I want the money back I blew on a crap game that you promised would be spectacular!

    If this whole thing was true he would have and should have acted sooner. Something tells me all his remaining money went up his nose so the only thing he deserves at this point is a good water boarding.

  • angelcar

    Posted May 6, 2009 6:27 pm GMT

    Wow, if NCSoft really did what Garriott claims I hope they get royally f'd. TR was a good game, and I was sad to see it go, but by trying to swindle RG seems to be a shady way for them to cut their losses on the failed game.

  • Targzissian

    Posted May 6, 2009 6:00 pm GMT

    This makes me wonder if NCSoft really just wanted to kill Tabula Rasa rather than stick it out and give the game the chance it deserved. I've had stock options before and I know how important it is to determine the best time to exercise them and be given the opportunity to do so. If everything Garriott is alleging in this suit is true then they screwed him over royally, and they possibly screwed us gamers over as well. Of course, I'm not objective because I've been a fan of Richard Garriott and Ultima since the time I spent an entire Christmas vacation playing Ultima II in the early eighties. I wish Garriott the best. I'm sure he'll land on his feet. I admire what he's done for space tourism as well as for the computer game industry.

  • funsohng

    Posted May 6, 2009 5:27 pm GMT

    i love when ppl sue each other
    it's just so funny

  • arc_salvo

    Posted May 6, 2009 5:25 pm GMT

    Well, if NCSoft has been doing shady things (which they've been known for) then I hope Mr. Garriot wins. If it's a frivolous lawsuit, then I hope he doesn't.

    That's all I can say, really.

  • Zoomer30 posted May 6, 2009 5:11 pm GMT (does not meet display criteria. sign in to show)

    Zoomer30

    Posted May 6, 2009 5:11 pm GMT (hide)

    X-D Looks like he will stop at nothing to get back into space again! (A trip to the ISS like the one he took last year runs about $25 million.)

  • laresistance123 posted May 6, 2009 5:00 pm GMT (does not meet display criteria. sign in to show)

    laresistance123

    Posted May 6, 2009 5:00 pm GMT (hide)

    Never heard of the game

  • asmoddeuss

    Posted May 6, 2009 4:51 pm GMT

    first of all , we cannot judge this to the winds . We aren't the ones who made the contract, if Garriott live in a castle and fly to space and collect cult objects is not a weirdo , who the hell are we to judge that ? Leave this alone , only the time and truth can judge this.

  • Godien

    Posted May 6, 2009 4:50 pm GMT

    If Mr. Garriot lost millions due to NCsoft FALSELY claiming he quit, forcing him to sell his stocks, then they deserve to be sued. No matter who he is, what he owns, or what he does, NCsoft (seems to have) breached a contract and Mr. Garriot deserves his hard earned money.

  • Blackfriend8

    Posted May 6, 2009 4:48 pm GMT

    mabye Garriott should have made a better mmo then he wouldnt be in this situation

  • Shadow_Fire41

    Posted May 6, 2009 4:35 pm GMT

    not sure what to say about this....

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