Interplay near collapse, Fallout Online in danger

Struggling developer Interplay may face a fight to avoid bankruptcy and might have to drop in-the-works MMO Fallout Online in the process.

This has become clear through a 76-page report that Develop has unearthed about the financial state of Interplay. Basically, it’s not looking good, and the only way to weather the storm could be to sell the company.

Since the new year, the company has operated “without a credit agreement or credit facility”, meaning there is very little cash to run operations.

This could have grave consequences for these projects, that the company has confirmed to be working on:

  • Fallout Online, developed by Masthead, planned release 2012
  • ClayFighter, for DSiWare, planned release Q2 2011
  • Stonekeep, for WiiWare, planned release Q3 2011
  • Descent, for WiiWare, planned release some time in 2011
  • Earthworm Jim 4, state unknown

“We currently have some obligations that we are unable to meet without generating additional income or raising additional capital,” Interplay said.

“If we cannot generate additional income or raise additional capital in the near future, we may become insolvent or be made bankrupt or may become illiquid or worthless.”

Interplay has said it is attempting to find external funding and will accept “a sale or merger of the company”. It is also seeking to negotiate a payment plan with its creditors.

The developer has been involved in a lawsuit with Bethesda over the rights to release Fallout Online. Bethesda has sued the company, claiming the MMO is in breach of copyright. Until this matter is settled, the game cannot be released. The latest news on this was that Bethesda has switched lawyers after failing to dismiss a countersuit from Interplay.