3D Realms breaks silence, explains Take-Two relationship

3D Realms has finally decided to make an official statement to clear the air about what exactly is going on with the company and the Take-Two lawsuit. What’s unclear, however, is what will happen with the work done on Duke Nukem Forever. Let’s let them say what they have to say.

“Despite rumors and statements to the contrary, 3D Realms (3DR) has not closed and is not closing. 3DR retains ownership of the Duke Nukem franchise. Due to lack of funding, however, we are saddened to confirm that we let the Duke Nukem Forever (DNF) development team go on May 6th, while we regroup as a company,” the statement explains. “While 3DR is a much smaller studio now, we will continue to operate as a company and continue to license and co-create games based upon the Duke Nukem franchise.”

The statement also claims that Take-Two has paid no money to 3D Realms for Duke Nukem Forever. The $12 million that went for the publishing rights? 3D Realms “was not a party to that transaction.” The game was self-funded, in other words.

“When the DNF game was originally signed with GT Interactive in 1998, GT paid 3DR a $400,000 signing bonus. Up until July 2008, this was the only publisher money we received for the DNF game,” the statement says. “Meanwhile, 3DR put over $20m into the production of DNF.”

Things, it seemed, got nasty. Here is 3D Realms explaining what happened, and I’ll quote at length:

Take-Two retains publishing rights for the DNF game, although 3DR retains certain rights to sell the game directly to the public. Late last year, 3DR began negotiations with Take-Two to provide funding to complete the DNF game. In the meantime, 3DR was hitting mutually-agreed milestones, despite not having a new agreement finalized. Take-Two was well aware that 3DR needed the funding to continue the DNF game development. Suddenly, after months of negotiations, Take-Two materially changed the parameters of the proposed funding agreement. 3DR informed Take-Two that it could not financially afford the changes Take-Two was suggesting and would be forced to release the team if an agreement was not reached. Take-Two made a last minute proposal to acquire the Duke Nukem franchise and the 3DR development team. Take-Two’s proposal was unacceptable to 3DR for many reasons, including no upfront money, no guarantee minimum payment, and no guarantee to complete the DNF game. From 3DR’s perspective, we viewed Take-Two as trying to acquire the Duke Nukem franchise in a “fire sale.” Those negotiations fell through on May 4th, a deal never materialized, and the DNF team was sadly released a few days later.

While 3D Realms won’t comment on the lawsuit, the statement says the litigation is without merit, and is a “bully tactic” to gain control of Duke Nukem.

This isn’t the last of this story, but at least a few things were explained a little more clearly.