Square Enix ‘broke payment deal with Grin’

The founding brothers of collapsed studio Grin have accused Square Enix of holding back substantial royalty payments for the group’s final unfinished project.

Bankruptcy documents suggest Square Enix was scheduled to pay the Swedish studio $16.5 million for a new Final Fantasy spin-off project, called Fortress.

Yet, according to a new report in Swedish tabloid Aftonbladet, Square Enix had apparently reneged on these royalty agreements.

Grin founders Bo and Ulf Andersson claim that the Japanese publisher missed scheduled payments for six months during a heated stand-off. They say they were tempted to sue over the matter.

Relations between the two groups became so poor that Square Enix apparently demanded Grin send the Fortress code over to Japan – through a fax machine.

“It is as silly as it sounds,” Bo Andersson said.

“It is an impossible requirement, you can not send ascii or binary codes on the fax. It is backward. It was almost a criminal activity.”

The Aftonbladet article claims that, before closure, Grin was straddled with $24 million in debt and was spending about $2 million per month to maintain the business.

In August 2009, Grin began a massive layoff operation that affected hundreds. Bo and Ulf Andersson at the time said they had been “forced” to close due to “too many publishers delaying their payments”, causing an “unbearable” cash flow situation.

Square Enix did not believe the Fortress project’s milestones were achieved in a satisfactory manner, the bankruptcy document suggests.

About 300 people were made redundant the year Grin’s became bankrupt, with studios in Stockholm, Gothenburg, Barcelona and Jakarta being axed.

Grin was best known for creating Tom Clancy’s Ghost Recon Advanced Warfighter 2 and Bionic Commando Rearmed.

Sourced via Kotaku.