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3D Realms: We're Not Closing, Spent $20M On Duke Nukem Forever

The creators of Duke Nukem Forever fired back today at publisher Take-Two, detailing the costs of developing the never seen game and saying they haven’t closed the studios.

3D Realms, the studio behind the legendarily delayed Duke Nukem Forever claimed in a statement today that Take-Two, the publisher now suing the studio, provided $US2.5 million in funding, a fraction of the$12 million described in the publisher’s lawsuit. Most of that money went to other companies long since uninvolved with the game.

The studio did confirm that the DNF team has been let go, but expressed a desire to “co-create” games based on the character in the future.

In their statement, 3D Realms accuses Take-Two of failing to offer the team a reasonable deal to continue developing the game and instead trying to attain the Duke Nukem Forever game from 3D Realms earlier this month in what amounted to a “fire sale.”

Kotaku has requested comment on these allegations from Take-Two.

3D Realms chief George Broussard e-mailed the full statement to Kotaku earlier today:

3D Realms Release – Pertaining to Recent Events Surrounding Duke Nukem Forever Dallas, TX (May 18, 2009) – In light of recent press articles and statements by Take-Two (to the media and in a lawsuit), we want to set the record straight on some issues.

Despite rumours 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. While 3DR is a much smaller studio now, we will continue to operate as a company and continue to licence and co-create games based upon the Duke Nukem franchise.

As some of you may know, Take-Two filed a lawsuit last week containing various accusations and claims against 3DR and the uncompleted DNF game. Take-Two never paid 3DR advances or any signing bonus or any other funds related to DNF, up until July 2008, at which time they paid $US2.5m in connection with another agreement for an unannounced game. This is the sum total Take-Two has paid 3DR in connection with DNF. Take-Two claims that they paid $US12m to GT Interactive/Infogrames to acquire the publishing rights for the DNF game. To be clear, 3DR was not a party to that transaction and did not receive any money from it. When the DNF game was originally signed with GT Interactive in 1998, GT paid 3DR a $US400,000 signing bonus. Up until July 2008, this was the only publisher money we received for the DNF game. Meanwhile, 3DR put over $US20m into the production of DNF.

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 finalised. 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.

Less than a week after the DNF team was released, Take-Two filed its lawsuit in New York, seeking immediate temporary injunctive relief. The court denied Take-Two’s request for a temporary restraining order. While we cannot comment on the details of the ongoing lawsuit, we believe Take-Two’s lawsuit is without merit and merely a bully tactic to obtain ownership of the Duke Nukem franchise. We will vigorously defend ourselves against this publisher.