The Californian developer is seeking a legal determination over whether or not it can terminate the agreement it hods with Webzen, alleging that the publisher has breached their agreement "multiple times". Red 5 is seeking to recover $5 million over the breach, plus the company's alleged refusal to commit the money towards marketing of the game in the United States.
Red 5 CEO Mark Kern explains:
We are deeply disappointed that Webzen has forced us to react this way. Since day one, our goal has been to craft a revolutionary gaming experience, get that game into the hands of as many people as possible, and do so utilizing the free to play model. Sadly, we do not believe that Webzen has lived up to its obligations under our agreement, which isn’t fair to our passionate team at Red 5 or to our supportive fans in Asia.
This arbitration will not disrupt the continued development of Firefall, which Red 5 intends to self-publish as a free-to-play title in the United States and Europe. Webzen continues to hold Asian publishing rights.
We reached out to Webzen several times to resolve this and other issues, but came away without any progress. It’s a modern day story of David versus Goliath: Small developer versus giant, disconnected publisher. As developers, we must take a stand and show publishers that we will hold them responsible for their dealings. What upsets us the most is that gamers end up paying for a publisher’s poor business practices and, to me, that isn’t right.
...but, of course, there are two sides to every story, and we've caught up with Webzen to find out what's going on from the other perspective. The Asian publisher claims surprise over the matter, announcing that the company first became aware of the arbitration move through "a foreign press release".
Officially, Webzen, based in Korea, cannot comment on matters that may affect the outcome of the current dispute - and, as it hasn't received the arbitration request, cannot comment on any specific details, either.
A statement reads:
Despite Red 5’s allegations that WEBZEN has breached the agreement, it is undisputable that WEBZEN has fulfilled all of its obligations under the agreement and will faithfully fulfill all of its remaining obligations.
According to the agreement, WEBZEN has the rights and obligations to service the game in territories around the world other than North America and Europe. During the last five years, WEBZEN has steadfastly prepared for the service of the game in Korea notwithstanding Red 5’s repeated development delays.
Red 5, however, has unilaterally demanded that WEBZEN perform duties not required under the contract and has rushed the service of the game, although the game is not even completely developed yet.
The statement from Webzen continues, explaining that The9, the Asian company that is the majority shareholder in Red 5, has been engaged in disputes with Webzen in the past, regarding trademark infringement and plagiarism.
In hopes of maintaining an amicable relationship so that WEBZEN can perform its publishing obligations, WEBZEN has refrained from publicly commenting on Red 5 and Red 5 Korea’s disparaging conduct. Going forward, WEBZEN will firmly seek all of its remedies under the law.
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Jimmy the Geek