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SouthPeak claims creditors used press to 'paint a negative picture' of the company
Throughout 2009 and 2010, SouthPeak's legal struggles made headlines. From the sweeping claims of unpaid work following the buyout of Gamecock Media Group to the lawsuits brought on by various companies that had done business with SouthPeak, a less than favorable image of the Texas-based game publisher had been created. In a recent interview with GamesIndustry.biz, SouthPeak chairman Terry Phillips defended his company, claiming creditors "used the press to try to put pressure on us; to try to squeeze a better deal out of us; to try to paint a negative picture of us." "You read a lot of it and you just think we've had a terrible year on the legal side," Terry Phillips added, "but we've not had one single substantive judgment against us whatsoever this year." He cited a French court's ruling in favor of SouthPeak over developer Nobilis, which granted the publisher "all rights on future [My Baby] games." Needless to say, SouthPeak is hoping for a sunnier 2011, as it expands the availability of Two Worlds 2, continues growing the My Baby family, and works with Nvidia to bring Tegra 2-powered games to Android devices.
Stark SouthPeak Q1 financials due to My Baby issues
SouthPeak's first quarter results saw the shaky publisher report a net loss of $1.2 million, compared to the $687K profit it reported during the same time last year. Revenues during the period were $1.4 million, a steep drop from the $16.7 million reported in the previous fiscal year. The publisher claims sales during the quarter were "largely impacted" by the My Baby mama-drama currently going on in the courts. SouthPeak is hopeful that a summary judgment granting the company the rights to resume production of My Baby: First Steps and "reinstate the contract with Nobilis" for future My Baby sequels will be upheld on December 2. Beyond praying that it gets My Baby back and sequels popping out, SouthPeak also spent time, and the bulk of its marketing costs during the quarter, promoting Two Worlds 2 -- which will arrive in the UK and US in January -- and getting the hype machine rolling for Stronghold 3.
SouthPeak says CDV dispute is resolved, wasn't cheap
SouthPeak Games CEO Melanie Mroz told investors this week that the ongoing legal argument between her company and distributor CDV has been resolved, and while full terms of the agreement weren't released, SouthPeak attributes a solid chunk of its $5.8 million in losses to the legal issues. Mroz says "the litigation costs of $3.2 and 3 million" that the company had to pay "were mainly related to CDV." Next up, the company wants to "put these matters behind us and continue to focus on our business and future growth," but not without My Baby. SouthPeak is still embroiled in the fight over that title with Nobilis and Majesco. Chairman Terry Phillips says that SouthPeak feels the My Baby title "is our series, so we're still hoping that that can happen."
SouthPeak to stop selling 'My Baby' during legal issues
While SouthPeak continues its legal dispute with My Baby developer Nobilis and publisher Majesco over the rights to the franchise and My Baby 3, the publisher will discontinue selling My Baby Girl and My Baby First Steps. SouthPeak Chairman Terry Phillips stated in an investor call today, "We firmly believe we are the rightful holder of the intellectual property to this franchise." He continued that the company is currently in court proceedings to resolve, what he calls, the wrongful termination of its agreements with Nobilis and is seeking damages for the developer soliciting the My Baby 3 rights to Majesco. He concluded that the company plans to "vigorously" defend its position. The My Baby franchise has been a "significant" part of the company's revenue, according to Phillips. So, missing My Baby 3 -- along with the other titles -- from the portfolio isn't helping SouthPeak's already glum financials.
Nobilis fires back at SouthPeak over My Baby IP, blames lack of payment for Majesco move
Responding to recent legal action between former My Baby franchise publisher SouthPeak Games and new publisher Majesco Entertainment, My Baby developer (and IP owner) Nobilis has placed blame for the move on "uncured breaches from SouthPeak, notably for non-payment." In so many words, it appears that Nobilis -- like other SouthPeak debtors -- is still waiting on unpaid bills from the publisher. Nobilis managing director Arnaud Blacher spoke with IndustryGamers regarding the lawsuit, saying that his company will also pursue litigation with SouthPeak over the issue. Furthermore, he confirmed that "all the contracts signed with SouthPeak in the US or in the UK have been terminated." As with most things legal, this situation is sure to get a lot more complicated long before we hear any sort of resolution. SouthPeak had yet to respond to a request for comment as of publishing.
SouthPeak suing Majesco over My Baby 3
Joystiq has confirmed with SouthPeak Games that the company has taken legal action against Mama game publisher Majesco Entertainment, specifically regarding the right to publish My Baby titles in the United States. The litigation was spurred by an announcement last month that Majesco would be publishing the Nobilis-developed My Baby 3 & Friends, an action SouthPeak claims Majesco wasn't legally allowed to take. For its part, SouthPeak issued this statement on the impending litigation: "We are exceptionally proud of our success in making the My Baby franchise a leader in the North American market; our innovative sales, marketing and PR strategies brought My Baby to a huge audience and built a loyal fan base for future products. SouthPeak continues to hold the rights to subsequent My Baby games and we intend to vigorously protect those rights." Additionally, we've confirmed that, while SouthPeak claims a contractual right to publish "subsequent My Baby games" in the US, Nobilis owns the My Baby IP. So, whose baby is it? That remains to be contested (Majesco and Nobilis reps hadn't responded as of publishing). And while SouthPeak recently acquired a $10 million loan, as well as another $5.5 million injection announced just this week, the company's still running into financial and legal issues left and right. "It's no secret that CDV is currently in dispute with SouthPeak Games along with many other companies, whilst CDV is itself in administration," SouthPeak exec Jonathan Hales told IndustryGamers recently, responding to the seizing of 40,000 units of SouthPeak stock by bailiffs on behalf of CDV. "We have sent High Court Enforcement Officers in last Friday and they took 40,00 units -- two trucks worth of stock -- out of the warehouse that SouthPeak uses. They had until yesterday to apply to court to stop that being sold at auction and as far as I'm aware they didn't make an application. We've also frozen the money from their distributor Centresoft," reps from CDV said. It looks like the custodianship of My Baby is just one of many legal battles SouthPeak may be facing in the coming months.
SouthPeak gets $10 million loan while losing biggest moneymaker
Outside of looming legal battles and down year-over-year revenues, SouthPeak recently received a $10 million "asset-based line of credit" that extends until February 28, 2012, reports IndustryGamers, effectively replacing an $8 million line of credit previously secured. We're not quite sure what debtors will have to take from SouthPeak should the publisher not be able to repay the $10 million, though, as Majesco Entertainment apparently scooped up SP's biggest franchise in mid June, My Baby. For what it's worth, SouthPeak chairman Terry Phillips said of the credit, "Securing this additional credit provides us with greater financial flexibility and presents a clear message to our investors that we are confident of our business prospects and growth opportunities over the near- and long-term." Here's hoping that Two Worlds 2 and Battle vs. Chess are enough to help the company get its feet back on the ground in the coming year.
'My Baby' sold by SouthPeak -- one million times
SouthPeak Interactive may be a little wobbly on paper and in the courtroom, but its My Baby franchise was born to run. The publisher's three My Baby games have sold over one million units in the US and Canada. Yes, one million units over three games may not sound so impressive, but we're talking about a series that retails for $30 and likely didn't cost much more to develop. The games are meant to appeal to girls ages 6 to 11, allowing "gamers" to start with a newborn in My Baby Boy and My Baby Girl, then transitioning them to "experience the joys of parenthood through to the toddler years in My Baby First Steps" After that, they'll be all set for the real thing with 16 and Pregnant.
SouthPeak revenue down 42% year-over-year in second quarter of FY2010
Wake up! After that headline, we saw you start dozing and we wanted to make sure you were with us for the next hundred-ish words of pure, unbridled excitement. According to SouthPeak Interactive's fiscal 2010 second quarter financial results released this morning (which make up the last three months of calendar 2009, ending December 31), the publisher netted $10.1 million, a 42% decline from fiscal 2009's second quarter results of $17.3 million. In one of the report's few positive notes, company CEO Melanie Mroz notes that the My Baby franchise grew 45 percent "compared with the last holiday season" -- and we were so worried about SouthPeak's baby! Notably, the decline in revenue was blamed on "a decrease in the number of titles released in the fiscal 2010 period." Also, the games that the company did publish weren't the pricier Xbox 360 and PlayStation 3 titles. We've got a free solution for you though, SouthPeak -- My Baby Next-Gen: Future Baby for the aforementioned consoles. That one's for free, guys. The next one'll cost ya.
