Bethesda Acquires Fallout IP from Interplay for $5.75M (Updated)

By Chris Remo, Apr 12, 2007 11:45pm PDT
Following Bethesda Softworks' 2004 announcement that it had licensed the rights from Fallout property holder Interplay to develop Fallout 3, reports filed with the SEC this week reveal that Bethesda has now signed a deal with Interplay to acquire the entire Fallout property. The $5.75 million sale of "all of [Interplay's] rights to the IP" was formalized on April 4 and went into effect on April 9, as described in the document filed on Thursday. Payment is being made in installments, with Bethesda set to have fulfilled its financial obligations by the third quarter of this year. (Thanks NMA)

Ailing firm Interplay has published every previously released game in the famed Black Isle-created RPG franchise, and was slated to develop its own third main game in the series before the project fell through and the rights licensed to Bethesda. Last December, Interplay formally outlined its plans to develop a $75 million Fallout MMO, the rights to which it had retained when the 2004 Bethesda agreement was signed. With Bethesda becoming the sole owner of the Fallout IP, Interplay negotiated the exclusive rights to create a Fallout MMO as part of this week's sale. Now, however, the reversed relationship between the two companies gives Bethesda greater leverage in Interplay's handling of the property.

Bethesda has also established a comprehensive set of quality control and schedule-related requirements. Interplay may not sublicense any part of MMO development without Bethesda's approval. The MMO "must meet or exceed such quality standards as may be set by Bethesda from time to time" in order for Interplay to remain in good standing, and Bethesda has the right to inspect Interplay's offices and development progress at any time during normal business hours provided two days' notice is given. Furthermore, Interplay must enter "full-scale" development of the MMO with a minimum of $30 million in funding by two years from the signing of the agreement, or it immediately forfeits its rights to the license. The company must launch the game in North America and Europe within four years of that development commencement date, with the potential for a one-year extension if development is progressing adequately, giving the game a final release date limit of April 9, 2014.

In return for granting Interplay the MMO rights, Bethesda will receive royalties of 12% of sales, subscription fees, or other revenue generated by the game.

For more on Bethesda's handling of its own Fallout 3 project, check out our prior interview with Bethesda's Pete Hines.

Shacknews has sent further inquiries to Bethesda regarding this week's deal.

Update: Shacknews has been contacted by Bethesda's Pete Hines, who described the deal as one that was a natural continuation of Bethesda's existing Fallout license and not one that will have any impact on Bethesda's development plans. "This transaction merely transfers some remaining property rights of Interplay in the Fallout brand to Bethesda," he said. "It doesn't have any effect on us. We are going forward with all our previous plans concerning the Fallout franchise."

As for the catalyst behind the move, Hines noted simply, "A decision was made by management to purchase the remaining property rights to Fallout that we didn't already control when that opportunity was presented to us."

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