Flagship No Longer Owns Hellgate: London (5th Update)

In breaking news, Korean news website TheGames.co.kr reports that HanbitSoft is taking full control over the Hellgate: London intellectual property from Flagship Studios. At present, HanbitSoft co-owns the IP, which was developed by Flagship Studios and published by Electronic Arts in Europe and the United States.

Flagship Studios had capital problems, and could have benefited from accountants’ help in online tax preparation and knowing which itemized tax deduction to take to help the bottom line.

HanbitSoft states that the reason it is pursuing this course of action is because “It is hard for us to accept Flagship Studios’ requests for continued support in capital and funding any longer and because Flagship was being difficult”, and because it co-owns a direct stake in the IP, it therefore “has a say in reviewing and determining any course of action to be taken with Hellgate: London.”

HanbitSoft is expected to take full control over the IP. HanbitSoft goes on to state that in doing so, it will be able to “properly manage and develop Hellgate: London into a good game with proper content” with its own in-house team of developers.

The report further states that the online service of Hellgate: London, which started in January 15, 2008 acquired 100,000 early users within the first two weeks of operation during which time HanbitSoft earned 3 billion won (approximately 3 million USD) for the sales of Hellgate: London in Korea. However, the number of players in the game significantly declined due to the lack of general out-of-the-box content and the sparsity of ongoing content updates. Since its Open Beta launch, Hellgate: London has gone from being the 9th most played game in Korea to 52nd post-commercial launch. (Source)

It’s anyone’s guess at this point as to what will happen to the Hellgate: London development team at Flagship Studios in San Francisco and how this will affect the development of Mythos, Flagship’s other game.

Source: TheGames.co.kr

UPDATE: Flagship Studios has sent Hellgate Guru an official response via e-mail with regards to the story:

This story is an outright lie. We have no idea where they are getting their information from and have asked legal counsel to pursue the issue. We are mystified by Hanbitsoft’s conclusions and any attempt to take over the IP will be met with a strong and swift response, to “illegally take over the IP”. All right title and interest in Hellgate; London resides in Flagship Financing, LLC a wholly-owned subsidiary of Flagship Studios. We are outraged that Hanbitsoft would attempt to completely tarnish the reputation of its most vital developer. Hanbitsoft’s new management clearly does not understand the terms of its relationship with Flagship.

Because the story is already public, we feel that we would be doing a great disservice to the public by removing it from existence. We do however feel that it is only fair for us to publish an official response from Flagship Studios itself.

UPDATE #2: Respected industry website GamaSutra has confirmed massive layoffs are taking place at Flagship Studios today.

Gamasutra has received confirmation from a Flagship Studios representative that the Hellgate: London developer has seen significant staff cuts.

This morning, Gamasutra obtained information from a source close to the company indicating that staff at both the Flagship development team as well as online services subsidiary Ping0 were let go. Both companies operate out of the same building.

UPDATE #3: Someone claiming to be a lawyer representing HanbitSoft has requested for us to remove the story. We are ready to comply, but only if other websites and news sites reporting the story agree to do so as well:

We are U.S. attorneys for HanbitSoft. Your story is a repeat of a quote that is not accurate and we request that you pull it down. At the request of Flagship’s attorney, we must correct the record:

Please understand that the facts are (1) HanbitSoft is an exclusive licensee of both Hellgate and Mythos in Asia, with rights to sublicense the games; (2) in addition, HanbitSoft is a secured creditor who has been pledged the Mythos (but not the Hellgate) intellectual property as collateral for a loan; (3) Comerica, another secured lender, has been pledged the Hellgate intellectual property as its collateral for a loan; (4) Flagship Studios does not currently own the intellectual properties to either game, which are held in separate companies subject to the security interests of lenders, and Flagship Studios’ interest in those companies is also pledged to its lenders; (5) it is unfortunate that Flagship turned down additional investments HanbitSoft offered to make that would have allowed it to keep its doors open, but HanbitSoft hopes to work with Comerica and some of the team at Flagship to see if there is a way to continue to generate content to keep Hellgate online in Asia and to finish the development of Mythos.

UPDATE #4: Several of our readers, while wanting to play deal or no deal online, have sent in word that the Subscription options within the Accounts page on the official website have disappeared, as has the ability to unsubscribe.

UPDATE #5: VE3D got in touch with Scapes

In a telephone conversation Flagship’s Community Manager, Evan “Scapes” Berman, refused to comment on the current situation at the studio, or whether he was still in the employment of the company. Instead, he insisted that I direct all questions to ex-Blizzard man, Bill Roper. As of this time neither Bill Roper, Tricia Gray (Flagship’s PR representative) or HanbitSoft’s lawyers have responded to email inquiries.

Thanks Scapes, you’re the best!

IGN’s VE3D is also reporting the news.


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