Interplay Details Dire Financial Straits, Could Go Into Liquidation

Fallout developer Interplay has told investors that they have “substantial concerns” over their ability to stay in business, according to SEC filings obtained by Develop. Among other things, the 76 page report notes that the company had, at the turn of the year, fallen to having a cash balance of just $3,000 and a deficit of $2.8m. The company also has no credit with which to work with. It was noted in the report that the company will have to raise funds, likely via selling the company, or risk “becom(ing) illiquid or worthless”. The filing came two months past its deadline.

The company’s financial situation could have effects on some big name games coming down the road. Among games that could be put into jeopardy are Fallout Online, an MMO set in the Fallout universe and due to be released in 2012, and sequels or reboots for ClayFighter, Descent and Earthworm Jim. The release of Fallout Online was already in jeopardy due to a lawsuit by Bethesda Softworks over the rights to the Fallout name, which were sold to Bethesda in 2004. Bethesda licensed the rights of the Fallout name back to Interplay conditionally so that Fallout Online could be developed.


Analysis: The funny thing about SEC laws is that it lays everything about your company – good and bad – bare for everyone to see. This is one of those cases where the news is very, very bad. Have you ever tried to buy something from someone that really needs the money? Beggars can’t be choosers, and beggars usually have to take what they’re given, which is going to be the case with Interplay either way. Their only way out of trouble – while staying solvent – would be to sell off the rights to their existing IPs, which include ClayFighter, Carmageddon and The Lost Vikings, among others. Unfortunately, they already played their trump card back in 2004, when they were in largely the same situation they’re in now. That’s when they sold the Fallout name, which is the cause of the pathetic lawsuit between them and Bethesda that has dragged on now for almost two years. None of those other names have really been used much, or effectively, in a long time. Selling the company isn’t an option unless someone is stupid enough to go through with it; why bother buying all of Interplay’s debts when you can just let them die, then circle them like vultures, taking their staff and their IPs at a depressed rate? I see that as the most likely outcome to this, especially since it’s pretty obvious that their current investors are going to get left in the lurch.

Interplay has really been on borrowed time for almost a decade; they were bought out in 2001, de-listed on NASDAQ due to low share price in 2002, and their parent company went out of business in 2004. I don’t think anything they do is going to really help, unless one considers treating a severed artery with a Snoopy Band-Aid “help”.

One thing about this: I have to wonder if this was something Bethesda planned on. They got the Fallout name, and were paid licensing fees to give it back to Interplay, after which they sued, saying that while they let Interplay use the Fallout name, they didn’t allow them to use anything having to do with what is considered the Fallout universe, a claim Interplay (rightly) called “absurd” in January. If things stand the way they are, Interplay will end up defaulting because they’ll be out of business. This is 100% extrapolation, and it’s a bit wild by my standards, but if this is the case, man is that some dirty pool on Bethesda’s part.

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Christopher Bowen

About Christopher Bowen

Christopher Bowen is the Editor in Chief of Gaming Bus. Before opening Gaming Bus in May of 2011, he was the News Editor at Diehard GameFAN, a lead reporter for DailyGamesNews, and a reviewer at Not A True Ending, also contributing to VIMM, SNESZone and Scotsmanality. Outside of the industry, he is a network engineer in Norwalk, CT and a veteran of Operation Iraqi Freedom.