Sega Can't Sue Gearbox Over Embezzlement, Says Sega Employee

Ever since Aliens: Colonial Marines released and the taste of embitterment has been filling the digital spaces, one thing has kept surfacing throughout this whole fiasco: Who will get sued by who? Many gamers suspected that Sega would take Gearbox Software and Randy Pitchford to court over fraud and embezzlement charges, but according to an anonymous Sega employee, that may not happen due to contractual obligations.

Jim Sterling has been verifying sources, digging deep and aiming to get to the bottom of this Aliens: Colonial Marines fiasco, with many gamers labeling it as the Xeno-Gate conspiracy, which has resulted in the game losing nearly 65% of its playerbase in just one week. Sterling has verified the identity of the Sega employee and writes more about the ongoing saga over on Destructoid. The anonymous employee, going by the pseudonym “Bryan Danielson”, wrote first about who should take blame for what, saying...

"TimeGate is at fault for: Wanting to even take on this project and their shoddy work,"..."Honestly, I thought they should have risked some arguments and the possibility of losing the contract, if they had problems with the project like the Reddit poster said. However, there still is a chance of their claims being a lie or a half truth, but as I said above, TimeGate has some responsibility."

"SEGA is at fault for: Announcing the project in 2007 when no work was done at all,"... "In my views, a game project should be announced publicly when it is 50-60% done, so you won't have to wait 6 years for a game that turns out to be shit.”

"SEGA is also responsible for not permanently cancelling the game in 2008. I don't know who found out about the mishandling of funds by Gearbox, but [canceling Colonial Marines] had to be one of the few right decisions the board has done, or this person is one of the few board members who knew what they were doing (from what I heard, this person may have left the board a while ago when SEGA decided to start the project again). This game should have been cancelled permanently, and the final product is undeniable proof of it.

According to Danielson and Sterling, the posts on Reddit and from other anonymous developers who claimed to have worked on and tested the game are about 99% true. This napalm of epic fail just seems to keep escalating into facepalm, head-smashing-the-desk territory and it doesn't look like it'll be over with anytime soon.

Danielson basically breaks down and explains what most of us have already pieced together, explaining why Sega went on and shipped the game despite testers warning Sega that the game was in no shape to ship, stating...

I believe SEGA wanted to try to get some of the money back, at the fans' expense. So another blame for SEGA there. SEGA should have also watched the project and development a lot better, because there was a lot of warning signs that said this was a disaster in the making. So whoever was assigned to watch Gearbox and the game has some responsibility too, unless the board was forcing him to do it. SEGA and their lawyers also have some blame on the wording of the contract too, but more on that later."

Now here is the company that should get most of the blame: Gearbox Software and Randy Pitchford. Gearbox stole from SEGA, they robbed us, lied to us about the game, and tried to get another company to make the game instead. Let's see where the funding went shall we? Everyone said the game went to both Borderlands games, but Duke Nukem Forever gets a mention as well, but it's pushed out of the spotlight, because people want to forget about that game, and I don't blame them! Duke Nukem Forever had a big impact on Aliens: Colonial Marines as well."

Sterling points to the Gamasutra article to corroborate the claim of Duke Nukem funding, in which Randy Pitchford himself kind of shoots himself in the foot.

But that's not all, Danielson believes that Gearbox should pay back Sega for the money that was used from Aliens: Colonial Marines for both Borderlands and Borderlands 2, stating...

"It clearly shows that Pitchford and Gearbox wanted to focus heavily on Duke Nukem Forever, but how would they get the money to hire some of the 3D Realms team and even buy the intellectual property? Sure, they made a lot from Borderlands, but guess where they got the money to fund Borderlands in the first place? Yup, SEGA.

"So Gearbox essentially lied to SEGA, mishandled funds, broke agreements and contractual obligations to work on other projects, didn't want to work on a game they were contractually obligated to work on and gave it to another team, poor organization and direction on ACM, took on too many projects from different companies at once, and other things that we may not even know about. Hell, part of me believes that Gearbox wanted this thing delayed as much as possible so they can get more funding money to embezzle from SEGA."

"In this case, what happened clearly was SEGA had a decent eye on the project, rightfully cancelled it, when they saw the problems, then someone decided to restart the project, leading to this massive mess," ... "Where is our money Randy? We should get sales from Borderlands 1 and 2, since it was our money that funded it."

According to Danielson, Sega cannot sue Gearbox because the studio fulfilled their contract and managed to get the game shipped by the date that they agreed upon. Did the game work? Yes. Did it have multiplayer, both co-op and competitive modes? Yep. Was it released on multiple platforms with adequate parity? Yeah. So could they sue for embezzlement if they don't actually have proof the funds were used for Borderlands? Well, it seems like one of those cases that would drag on and on and ruin a lot of careers in the process.

My thinking is this: Sega wants to cut their losses, take a big of a public beating since they published the game but ultimate hoped to reap some money from pre-orders and first-week sales. Given that brunt of the blame is being fronted by Gearbox Software and their reputation as a development studio is what hangs in the balance, Sega will weather the storm, wait it out and get back to business as usual.

With Nerve, Demiurge and TimeGate distancing themselves as much as possible, it's looking like Randy Pitchford and the Gearbox gang will be the ones taking most of the blame for this one. Still, don't discount that all inclinations for a lawsuit are off the table.

You can read more from “Bryan Danielson” over his blog.