A drama involving DJ videogames, lawsuits, and boardroom bloodbaths

Seems these days that there are more lawsuits surrounding music games than the Church of Scientology, and the up and coming DJ subgenre is the one under fire this week. Genius Products and DJ Product juggernaut Numark, publishers of Scratch: The Ultimate DJ, are suing Activision, publisher of DJ Hero on accounts of conspiracy to keep their competing product from hitting the market first.

The story is one of intrigue and convolution that is truly worthy of this fine burgeoning industry, and one Gamasutra dug pretty deep on. Genius alleges that the company developing Scratch, 7 Studios, has been in a financial rut for some time, and were asking for milestone payments earlier and earlier as development went on (milestone payments being the sum publishers dish out when a certain point in development is reached). Enter Activision, who want to buy the rights to Scratch for a mint or two. At this point, Genius gets an email from 7 Studios’ CEO Lewis Peterson saying Activision’s talking about buying his company and that they “have ways to get what they would want that would leave Genius in a very difficult position, possibly with nothing.”

Genius demonstrates what they have of Scratch, and on that same day, Activision changes their offer to a price that does not include the value of Scratch as an intellectual property, something they allegedly assured they would not do. After some heated negotiations, Genius eventually declines the offer, even after being told the game would not “see the light of day” if it wasn’t published by Activision, that “Scratch as an IP has no value,” and that they’d face a “lega buzzsaw” when infringing on their and Konami’s patents with the game.

Fast forward just a short while later, and 7 Studios is now owned by Activision. On April 3rd, when the studio and Genius were to sign a revised contract, Genius was blindsided by a list of demands that were commercially and financially unreasonable. This led to the publisher terminating the contract and deciding to take over development. The snag there is that 7 Studios allegedly (again) rejected the termination and refused to hand over their work or their in-progress builds. They were even instructing security to keep Genius staff entry into their studio.

As a result, Genius and Newmark are hitting the legal circuit, demanding an injunction on 7 Studios working on a competing product for a year after release of Scratch, disclosure of trade secrets in their game, and that all damages and legal fees be paid. Activision has been contacted for comment, but has given none yet.

Them DJ’s… brutal.

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