Rock Band dev Harmonix sues Viacom for shady profit withholding practices

first_imgViacom’s acquisition of Rock Band developer Harmonix seemed like a big win for everyone — raking in millions while the latter company was able to do its best work in the music game space to date — but Viacom’s recent decision to put Harmonix up to sale seems to have lead to some bad blood: Harmonix is now suing.According to a lawsuit filed by Harmonix, Viacom “diverted opportunities” from the developer for its own benefit so that it wouldn’t have to fork out millions of dollars in performance-related bonuses earned from the Rock Band series’ extraordinary financial success.An ex-shareholders group including Harmonix founders Alex Rigopulos and Eran Egozy are asserting that Viacom consistently manipulated costs to avoid performance-related payouts after the latter company bought Harmonix in 2006 for $175 million. According to Harmonix, they were due to receive 3.5 times any gross profit in excess of $32 million in 2007, with no upwards cap. The 2008 payment had similar terms, but the gross profit had to be more than $45 million. Instead, though, Viacom seems to have realized that for every buck in distrubution fees that Harmonix saved in 2008, they’d have to pay out $3.50 to the ex-shareholders. That’s a lot of money, but Viacom made it: to date, the Rock Band series has pulled in over a billion dollars in North America alone. Pretty scummy of Viacom, if these allegations are true.Resd more at Eurogamerlast_img read more

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