Fallout MMORPG future unclear, Interplay facing bankruptcy

After losing $1 million last year, publisher was left with $3,000 cash, $2.87 million in debt, and no credit; only seven developers on staff.

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For the past two-plus years, Interplay has waged an at-times intense legal battle with Bethesda Softworks to protect its right to publish Fallout Online. Last week, the former company issued an annual report that revealed a set of finances so dismal that the company may soon be facing bankruptcy, endangering the nascent massively multiplayer online role-playing game.

Please Stand By.
Please Stand By.

For the year ending December 31, 2010, Interplay's net loss was approximately $1.034 million on revenues of $1.380 million, bringing its working capital deficit to $2.877 million. Interplay also has no new sources of credit to address its lack of cash on hand, which stood at just $3,000 at year's end. As a result, the company is on extremely shaky financial ground and acknowledged as much in documents filed with the Securities and Exchange Commission.

"If we do not receive sufficient financing or sufficient funds from our operations we may (i) liquidate assets, (ii) seek or be forced into bankruptcy and/or (iii) continue operations, but incur material harm to our business, operations or financial condition. These measures could have a material adverse effect on our ability to continue as a going concern," the company said.

In the SEC documents, the company also stated flat-out that it "may not be able to successfully develop a Fallout MMOG." It cited its ongoing legal battle over the Fallout license, which began in April 2009 when Bethesda opted to revoke the Fallout MMORPG rights just as Interplay had entered into a development deal on the project. The two publishers then sued each other, setting off a protracted legal battle.

The latest salvo came last December, when Bethesda filed a motion to block Interplay from using iconic assets from the Fallout universe in Fallout Online, which is currently in development at Bulgarian shop Masthead Studios (Earthrise). If it survives, the game is currently slated for a launch sometime in 2012.

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