Sega’s Legal Options are Few When It Comes to Aliens: Colonial Marines

The dust has settled around the critically panned Aliens: Colonial Marines, but one thing remains unclear — was there wrongdoing involved in the development of the clearly rushed, sometimes broken game?

Since its release, anonymous accusations from developers reportedly close to the situation have accused developer Gearbox of misappropriating funds related to the production of the game. But if that really is the case, shouldn’t publisher Sega have some kind of legal recourse? The answer, as with everything related to Colonial Marines, is muddy and unclear.

Since the game’s release last month, there’s been little more than finger-pointing by various anonymous sources claiming to work for publisher Sega or any of the developers involved in Colonial Marines’ creation: namely, TimeGate Studios and Gearbox Studios. Just what took place with the game isn’t precisely clear and none of these supposed whistleblowers has been willing to speak without anonymity, but they generally claim that shady dealings and maybe even embezzlement were among the reasons Colonial Marines came out so bad.

Read Game Front’s previous report on the rumors surrounding Colonial Marines’ tumultuous development here: Aliens Colonial Marines: The Whole Trainwreck Explained.

Accusations mostly center around the idea that Sega provided Gearbox with money to make Colonial Marines, which Gearbox then used to outsource major portions of the work to other developers — namely, TimeGate. In February, a poster on Reddit’s LV-426 subreddit page claimed that Gearbox had found itself with a hit in Borderlands, and immediately started work on Borderlands 2 after the first game’s launch. That created a conflict with the development of Colonial Marines, and the Sega title became a lower priority for Gearbox.

Colonial Marines was allegedly shelved a number of times at Gearbox in favor of other projects, such as the Borderlands games and Duke Nukem Forever. According to the Reddit post, there were even points at which Sega might have been considering legal action, and there have been other anonymous sources stating that Gearbox may have used money slated for the development of Colonial Marines to fund the development of its other games, as Destructoid reports.

One big question remains for the whole situation: Does Sega have some legal recourse against Gearbox? That really depends on the contract between Sega and Gearbox, attorney Jovan Johnson told Game Front. Johnson specializes in law related to apps and video games at the Los Angeles entertainment law firm Johnson & Moo. His practice focuses on information privacy, development, and marketing issues related to mobile games and apps and his clients include game developers as well as publishers.

“Here’s how it works: Publisher approaches Developer and asks for a price to complete a project,” Johnson said via email. “Once that price is agreed upon and the contract is complete, Publisher will makes an initial payment. Publisher makes additional payments as Developer meets contractual milestones. Publisher doesn’t care if Developer spends 100 percent of its milestone payment on labor or jello, so long as Developer meets the milestone. If Developer works as both a third party developer and creates its own titles, Publisher probably expects Developer to spend some of its milestone payments on Developer’s titles.

“It’s possible to negotiate a floor requiring that Developer spend at least X dollars on a certain aspect of the title. If that’s the case with Colonial Marines, then Sega should be interested in following the money trail…which will be difficult.”

The details of the contract negotiated between Sega and Gearbox will likely be what determines any outcome, it seems. Since Sega seemed to be aware of the involvement of other studios on the project, it seems unlikely it would be able to pursue a claim that Gearbox outsourced the work to studios that fell outside of its contract with Sega. While Sega and Gearbox might have a dispute over milestones, the final quality of the game might be harder to quantify.

As for finding out just how Gearbox spent the money Sega gave it, Johnson said that also could be difficult, and would likely require a court order.

“Audit rights are usually granted in contracts that include a royalty provision, and they usually focus on the accuracy of royalty payments,” he said. “Practically, tracing money is difficult even if you know that someone has done something wrong.”

It seems as though Sega’s options are likely pretty limited, and we may well never know exactly what went on behind the scenes in producing the game. Unless Sega’s contract includes specific protections or expectations of the job Gearbox was supposed to deliver in Colonial Marines, it seems unlikely the publisher will have many options — and that’s assuming that Gearbox did anything that can be considered “wrong” in the first place. It may likely be more in line with Sega’s interests to work out something with the developer, or just to consider Colonial Marines an investment lost and move on.

Read more of Phil Hornshaw’s work here, and follow him and Game Front on Twitter: @philhornshaw and @gamefrontcom.

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3 Comments on Sega’s Legal Options are Few When It Comes to Aliens: Colonial Marines


On April 3, 2013 at 1:04 pm

you know you printing rumour not fact again

Phil Hornshaw

On April 3, 2013 at 1:10 pm


It is rumor. It’s also a hypothetical situation — we likely won’t ever know just what happened, unless Sega actually brings a lawsuit up. But even if it wanted to, the point here is that it would have a hard time. So the rumors have been called out as such, but they’re persistent, and we wanted to bring some fact to this: even if the rumors are true, it seems unlikely we’ll see a lawsuit. Whether the rumors are true is something that’s much harder to determine.


On April 3, 2013 at 11:11 pm

Gah; good comments bob and phil. This messy debacle definitely deserves to act as a lesson to the industry, but it’s also very clear that finding out exactly what went wrong will be a nightmare (if not impossible). Right now bob, it seems rumours (no matter how likely/unlikely) are all anyone’s got to go on (except the studios who made ACM of course). But they ARE being reported as rumours!