Obsidian Entertainment’s upcoming South Park-based RPG, The Stick of Truth, is among the many and sundry games and properties set to be auctioned off in the wake of THQ declaring bankruptcy earlier this month. South Park Digital Studios LLC, which is the owner of the South Park IP, is currently attempting to block the auctioning-off of the game, and have filed an objection in a Delaware court to achieve that end.
The objection asks the court to deny the sale of South Park: The Stick of Truth unless South Park Digital Studios consents to the sale transfer of any South Park licenses, receives a payment of $2.275 million for defaulted payments and “adequate assurance of future performance” for the game.
According to objection filed by South Park Digital Studios (PDF link) dated Jan. 18, the Studio and THQ entered into an agreement referred to as a “Deal Memo” on June 29, 2011 to license the South Park intellectual properties for use South Park: The Stick of Truth, which would be developed for THQ by Obsidian Entertainment.
South Park Digital Studios objects to the proposed sale, stating in the document that “applicable law excuses Licensor from accepting performance from or rendering performance to a party other than THQ.” Furthermore, even if the acquisition were possible, THQ has “not provided adequate assurance of future performance of the Deal Memo in the hands of a prospective purchaser.” The sale would require South Park Digital Studios’ consent because the elements being sold are owned and licensed by the studio.
According to the objection, the Deal Memo affords South Park Digital Studios “the option to acquire from THQ all elements of the South Park game and related products in the event of THQ’s breach, provided that Licensor pays to THQ the actual costs incurred and paid by THQ.”
THQ, for their part, have responded that South Park Studios’ claim is invalid, and that they can indeed sell The Stick of Truth to another publisher. This is according to a clause in the contract between the two parties that has not been disclosed publicly, apparently. That said, THQ has stated that they will work with South Park Studios toward a resolution.
What this means for the future of the game — currently slated for release on March 5th — is uncertain. Certainly, a delayed release is a real possibility, as is the game becoming caught up in a legalistic form of “development hell”. The larger concern is what the impact on Obsidian Entertainment will be, if any; it would be a shame if such a promising studio ended up going under because of all this. I don’t know whether there’s a danger of that, but Obsidian has had a run of back luck lately, and I’m not sure how well-positioned they are at present to handle a key game in their portfolio being delayed for what could potentially be a matter of months.