Iam8bit Files Lawsuit Against Skybound Games Over Alleged Fraud and Contract Breach

A lawsuit has been filed by iam8bit against Skybound Games, alleging fraudulent activities and a breach of contract. The complaint, submitted to the Superior Court of the State of California, County of Los Angeles, claims that Skybound engaged in a prolonged scheme involving inaccurate financial reporting. According to iam8bit's legal representatives, Skybound failed to deliver monthly reports as agreed upon and inflated expenses with fictitious line items, resulting in significant financial losses. Iam8bit has incurred $4 million in costs after hiring a third-party auditor to investigate the matter, as many of Skybound's expense items remain unexplained. Furthermore, iam8bit alleges that Skybound interfered with a deal related to the independent game Stray, utilizing confidential information about iam8bit's royalties with the game's publisher, Annapurna, to exclude iam8bit from the deal prior to the game's release on the Nintendo Switch platform. Iam8bit also claims that Skybound used nearly identical copies of its marketing materials. The lawsuit states that Skybound secretly entered into an agreement with Annapurna regarding a new version of Stray for the Nintendo Switch, concealing this deal from iam8bit and misrepresenting its intentions. The partnership between iam8bit and Skybound Games Studios began in April 2021, with the goal of collaborating on physical versions of independent games. Iam8bit, a merchandise specialist established in 2005, is known for selling video game soundtracks on vinyl, as well as other physical goods like T-shirts and art. The company has also been involved in organizing the Play Days live event element of Geoff Keighley's Summer Game Fest since 2022 and launched its iam8bit Presents publishing label the same year. Skybound Games Studio is the gaming division of Skybound Entertainment, founded by The Walking Dead creator Robert Kirkman. GamesIndustry.biz has contacted Skybound Games Studios for a statement regarding the allegations.