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| SouthPeak Games | |
| Formerly |
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| Company type | Public |
| Grey Market: SOPK | |
| Industry | Video games |
| Founded | March 1, 1996; 29 years ago (1996-03-01) inCary,North Carolina, U.S. |
| Defunct | July 2013 (2013-07) |
| Fate | unknown |
| Headquarters | , U.S. |
Area served | North America |
Key people | |
| Parent |
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| Subsidiaries |
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SouthPeak Interactive Corporation,doing business asSouthPeak Games, was an Americanvideo game publisher based inMidlothian, Virginia. Founded on March 1, 1996, as a subsidiary ofSAS Institute inCary, North Carolina, it was sold and moved toMidlothian, Virginia in 2000, and became apublic company in 2008. Also in 2008, the company acquired and closedAustin, Texas–based publisherGamecock Media Group, and opened a separatedigital distribution subsidiary 7Sixty inGrapevine, Texas in 2011. SouthPeak Games quietly disappeared from the public eye in July 2013.
SouthPeak Games was founded as SouthPeak Interactive LLC on March 1, 1996,[1] as asubsidiary ofSAS Institute.[2] Both companies were headquartered inCary, North Carolina.[3] SAS Institute'sexecutive vice-president andchief technology officer, Armistead Sapp, was appointed as the new company'spresident.[4] In 1997, SouthPeak Games signed a deal withRed Storm Entertainment that would grant them the exclusive license to distribute all of their upcoming titles,[5] but this was terminated by Red Storm in April 2000.[6] In March 1999, SouthPeak Games acquired the license to develop games based on theWild Wild West film.[7][8] Starting from September 27, 1999,Raleigh, North Carolina–based creative shop Front Door acquired advertisement production rights for games published by SouthPeak Games forUS$8 million.[3] On October 16, 2000, SAS Institute sold SouthPeak Games toMidlothian, Virginia–basedprivately held company Terry Phillips Sales, Inc., owned by brothers Terry Marshall Phillips and Gregory Robert Phillips, forUS$4.5 million, making Terry Phillips the newdirector of SouthPeak Games.[9] As result of the sale, all assets related to SouthPeak Games were moved the Midlothian location, while all staff at the Cary location were laid off or re-employed directly by SAS Institute.[10] The company in its new location was legally registered as SouthPeak Interactive, L.L.C. on October 19, 2000.[11] In August 2005, Melanie Mroz was appointed executive vice-president of SouthPeak Games.[12]
On January 16, 2008, SouthPeak Games acquiredpublic company Global Services Partners Acquisition Corp. (GSPAC), a company intentionally created as ablank check to "consummate a business combination", forUS$31 million.[13] Through that transaction, SouthPeak Games performed areverse merger takeover, and thus merged itself into GSPAC to form a new public entity titled SouthPeak Interactive Corporation, with Mroz becoming president andchief executive officer, and Phillips becomingchairman.[14] On June 19, 2008, the company announced that they had raised a total ofUS$12.9 million throughprivate investment in public equity, in order to expand its business.[15] On October 14, 2008, the company announced that it had acquiredAustin, Texas–based video game publisherGamecock Media Group, including its upcoming titles,Legendary,Mushroom Men, andVelvet Assassin.[16] Gamecock Media Group was initially made a publishingsubsidiary, however, it was closed shortly after.[17] In August 2009, SouthPeak Games started facing legal issues withwork-for-hire vendors who had worked on games published by Gamecock Media Group, accusing SouthPeak Games of not paying outstandingroyalties, although SouthPeak Games had already acknowledged these issues when they acquired Gamecock Media Group.[18]
When SouthPeak Games released their 2009 Q1quarterly report on November 13, 2009, it was revealed that, after American video game developer and publisherMidway Games filed forChapter 11 bankruptcy in February 2009, SouthPeak Games had acquired the exclusive rights to publishing video games based on theTNA Impact! television program forUS$100,000,[19] however, they could not agree withTotal Nonstop Action Wrestling upon any further titles to be developed.[20]
In December 2009,TimeGate Studios, the developer ofSection 8, which was to be published by Gamecock Media Group before their acquisition, sued SouthPeak Games overbreach of contract, accusing them of withholding 24 outstanding milestone payments with a sum of aroundUS$6.2 million, in addition to royalty payments for the development ofSection 8.[21] In response, SouthPeak Games filed acounterclaim against TimeGate Studios, stating that they willingly shipped a game of poor quality in order to negatively manipulated the product's sales, seekingUS$7.3 million in damages.[22] In November 2011,arbitrator Peter Vogel ruled in favor of SouthPeak Games, ordering TimeGates Studios to pay theUS$7.3 million and hand over the license to theSection 8intellectual property to SouthPeak Games, which was, however, overturned by a federal court in March 2012, claiming that the original contract foresaw that TimeGate Studios would retain theSection 8 license in the publishing deal.[23] Regardless, in April 2013, theUnited States courts of appeals closed the lawsuit in favor of SouthPeak Games, forcing TimeGate Studios to pay a total ofUS$7.35 million in damages, and again pass theSection 8 license to SouthPeak Games.[24]
In November 2009, SouthPeak Games lost a legal battle to German distributorCDV Software, which concerned the failure to deliver three out of four unspecified games before Christmas 2008, and was ordered to payUS$3.1 million.[25] Additionally, on February 19, 2010, the judge ruled upon CDV Software's other claims, includingcopyright infringement and breach of contract, ordering SouthPeak Games to hand in further, undisclosed payments.[26] Mid-issue, on April 8, 2010, Reba McDermott was appointedchief financial officer, replacing Melanie Mroz, who previously served that role interimly,[27] but saw her appointment terminated nine months later.[28] As a result of the outstanding bills, on July 20, 2010, British distributor Centresoft put 40,000 units of SouthPeak Games stock on ice to auction them off,[29] generating£50,000 by August 6, 2010.[30] The legal issue was announced to be resolved on October 14, 2010,[31] and CDV Software dropped all charges against SouthPeak Games on November 10, 2010.[32] However, all payments ordered by the settlement court were not paid by SouthPeak Games, as a result of which CDV Software filed for preliminaryinsolvency on April 15, 2010.[33]
In June 2010, American publisherMajesco Entertainment announced the upcoming release ofMy Baby 3 & Friends, the third entry in theMy Baby franchise, of which the first two were published by SouthPeak Games.[34] In response to the announcement, on July 21, 2010, SouthPeak Games sued Majesco over copyright infringement over theMy Babyintellectual property, despite its developer, French studioNobilis, actually owning it at the time.[35] Five days later, on July 26, 2010, Nobilis responded to the accusation, citing SouthPeak Games' failure to pay royalties as reason to switch to Majesco and cease operations with SouthPeak Games.[36] Due to damages caused by the legal issue, SouthPeak Games halted the distribution of all released titles in theMy Baby series, namely,My Baby Boy,My Baby Girl, andMy Baby First Steps on October 13, 2010.[37] It was reported on January 10, 2011, that SouthPeak Games had won against Majesco and Nobilis, with theLyon Commercial Court stating that Nobilis had no legal basis for ceasing operations with SouthPeak Games, wherefore all rights to there series were returned to SouthPeak Games.[38]
In November 2010, theU.S. Securities and Exchange Commission (SEC) issuedcease and desist orders against Phillips, Mroz, and SouthPeak Games for submitting incorrectSEC filings, which SouthPeak Games later stated to have been anerror.[39] Afternet losses ofUS$2.6 million andUS$2.1 million in the first and second quarters of the company'sfiscal year 2011, respectively,[40] SouthPeak Games was delisted from theNew York Stock Exchange in September 2011.[41]
On July 12, 2011, SouthPeak Games opened a newdigital distribution subsidiary, 7Sixty LLC, inGrapevine, Texas.[42] Led byvice president of publishing Leslie House and vice president of interactive entertainment Jeff Hutchinson, the studio was established in order to expand SouthPeak Games' business strategies to cover the digital market, with their first title to beStronghold 3.[43]Stronghold 3, released on October 25, 2011, would become the last game published by SouthPeak Games or 7Sixty, and both companies left the public eye in July 2013.
The first title using Video Reality wasTemujin: The Capricorn Collection, a psychological thriller that started selling in September 1997. The second title utilizing Video Reality wasDark Side of the Moon: A Sci-Fi Adventure and the third and last title utilizing Video Reality was20,000 Leagues: The Adventure Continues, which was never released to the public.
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