SouthPeak Interactive Corporation,
doing business as SouthPeak Games, was an American
video game publisher based in
Midlothian, Virginia. Founded on March 1, 1996, as a subsidiary of
SAS Institute in
Cary, North Carolina, it was sold and moved to
Midlothian, Virginia in 2000, and became a
public company in 2008. Also in 2008, the company acquired and closed
Austin, Texas-based publisher
Gamecock Media Group, and opened a separate
digital distribution subsidiary 7Sixty in
Grapevine, Texas in 2011. SouthPeak Games quietly disappeared from the public eye in July 2013.
History
Foundation and sale (1996–2005)
SouthPeak Games was founded as SouthPeak Interactive LLC on March 1, 1996, as a
subsidiary
A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
of
SAS Institute. Both companies were headquartered in
Cary, North Carolina.
SAS Institute's
executive vice-president and
chief technology officer, Armistead Sapp, was appointed as the new company's
president. In 1997, SouthPeak Games signed a deal with
Red Storm Entertainment that would grant them the exclusive license to distribute all of their upcoming titles, which was, however, terminated by Red Storm Entertainment in April 2000. In March 1999, SouthPeak Games acquired the license to develop games based on the ''
Wild Wild West'' film. Starting from September 27, 1999,
Raleigh, North Carolina-based creative shop Front Door acquired advertisement production rights for games published by SouthPeak Games for .
On October 16, 2000, SAS Institute sold SouthPeak Games to
Midlothian, Virginia-based
privately held company Terry Phillips Sales, Inc., owned by brothers Terry Marshall Phillips and Gregory Robert Phillips, for , making Terry Phillips the new
director of SouthPeak Games. 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. The company in its new location was legally registered as SouthPeak Interactive, L.L.C. on October 19, 2000. In August 2005, Melanie Mroz was appointed executive vice-president of SouthPeak Games.
Acquisitions (2005–2009)
On January 16, 2008, SouthPeak Games acquired
public company Global Services Partners Acquisition Corp. (GSPAC), a company intentionally created as a
blank check to "
consummate a business combination", for . Through that transaction, SouthPeak Games performed a
reverse merger takeover, and thus merged itself into GSPAC to form a new public entity titled SouthPeak Interactive Corporation, with Mroz becoming president and
chief executive officer, and Phillips becoming
chairman
The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...
. On June 19, 2008, the company announced that they had raised a total of through
private investment in public equity, in order to expand its business. On October 14, 2008, the company announced that it had acquired
Austin, Texas-based video game publisher
Gamecock Media Group, including its upcoming titles, ''
Legendary'', ''
Mushroom Men'', and ''
Velvet Assassin
''Velvet Assassin'' is a stealth video game for Microsoft Windows and Xbox 360, released in 2009. ''Velvet Assassin's'' working title was ''Sabotage''. It was released on the Mac app store in 2013. Players take control of Violette Summer, a Worl ...
''. Gamecock Media Group was initially made a publishing
subsidiary
A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
, however, it was closed shortly after. In August 2009, SouthPeak Games started facing legal issues with
work-for-hire
A work made for hire (work for hire or WFH), in copyright law in the United States, is a work that is subject to copyright and is created by employees as part of their job or some limited types of works for which all parties agree in writing to the ...
vendors who had worked on games published by Gamecock Media Group, accusing SouthPeak Games of not paying outstanding
royalties
A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset o ...
, although SouthPeak Games had already acknowledged these issues when they acquired Gamecock Media Group.
When SouthPeak Games released their 2009 Q1
quarterly report In the private sector, a quarterly finance report is a financial report that covers three months of the year, which is required by numbers of stock exchanges around the world to provide information to investors on the state of a company. "Private se ...
on November 13, 2009, it was revealed that, after American video game developer and publisher
Midway Games
Midway Games Inc., known previously as Midway Manufacturing and Bally Midway, and commonly known as simply Midway, was an American video game developer and publisher. Midway's franchises included ''Mortal Kombat'', ''Rampage (series), Rampage'' ...
filed for
Chapter 11 bankruptcy
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whe ...
in February 2009, SouthPeak Games had acquired the exclusive rights to publishing video games based on the ''
TNA Impact!'' television program for , however, they could not agree with
Total Nonstop Action Wrestling upon any further titles to be developed.
Lawsuits (2009–2011)
In December 2009,
TimeGate Studios
TimeGate Studios was an American video game developer based in Sugar Land, Texas. The company, which was founded in 1998, released eight titles before closing in 2013.
History
TimeGate Studios was founded in 1998 by Alan and Adel Chaveleh, who r ...
, the developer of ''
Section 8'', which was to be published by Gamecock Media Group before their acquisition, sued SouthPeak Games over
breach of contract
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party ...
, accusing them of withholding 24 outstanding milestone payments with a sum of around , in addition to royalty payments for the development of ''Section 8''. In response, SouthPeak Games filed a
counterclaim against TimeGate Studios, stating that they willingly shipped a game of poor quality in order to negatively manipulated the product's sales, seeking in damages. In November 2011,
arbitrator Peter Vogel ruled in favor of SouthPeak Games, ordering TimeGates Studios to pay the and hand over the license to the ''Section 8''
intellectual 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 the ''Section 8'' license in the publishing deal. Regardless, in April 2013, the
United States courts of appeals closed the lawsuit in favor of SouthPeak Games, forcing TimeGate Studios to pay a total of in damages, and again pass the ''Section 8'' license to SouthPeak Games.
In November 2009, SouthPeak Games lost a legal battle to German distributor
CDV Software, which concerned the failure to deliver three out of four unspecified games before Christmas 2008, and was ordered to pay . Additionally, on February 19, 2010, the judge ruled upon CDV Software's other claims, including
copyright infringement and breach of contract, ordering SouthPeak Games to hand in further, undisclosed payments. Mid-issue, on April 8, 2010, Reba McDermott was appointed
chief financial officer
The chief financial officer (CFO) is an officer of a company or organization that is assigned the primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financ ...
, replacing Melanie Mroz, who previously served that role interimly, but saw her appointment terminated nine months later. 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, generating by August 6, 2010. The legal issue was announced to be resolved on October 14, 2010, and CDV Software dropped all charges against SouthPeak Games on November 10, 2010. However, all payments ordered by the settlement court were not paid by SouthPeak Games, as a result of which CDV Software filed for preliminary
insolvency on April 15, 2010.
In June 2010, American publisher
Majesco Entertainment announced the upcoming release of ''
My Baby 3 & Friends'', the third entry in the ''
My Baby'' franchise, of which the first two were published by SouthPeak Games. In response to the announcement, on July 21, 2010, SouthPeak Games sued Majesco over copyright infringement over the ''My Baby''
intellectual property, despite its developer, French studio
Nobilis, actually owning it at the time. Five days later, on July 26, 2010, Nobilis responded to the accusation, citing withunder SouthPeak Games' failure to pay royalties as reason to switch to Majesco and cease operations with SouthPeak Games. Due to damages caused by the legal issue, SouthPeak Games halted the distribution of all released titles in the ''My Baby'' series, namely, ''
My Baby Boy'', ''
My Baby Girl
''My Baby'' are a series of single-player virtual life simulation video games developed by French studios Dancing Dot Studio and Nobilis Games.
Games My Baby Girl/My Baby Boy
''My Baby Girl'' and ''My Baby Boy'' are Nintendo DS video games rele ...
'', and ''
My Baby First Steps'' on October 13, 2010. It was reported on January 10, 2011, that SouthPeak Games had won against Majesco and Nobilis, with the
Lyon 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.
In November 2010, the
U.S. Securities and Exchange Commission (SEC) issued
cease and desist
A cease and desist letter is a document sent to an individual or business to stop alleged illegal activity. The phrase "cease and desist" is a legal doublet, made up of two near-synonyms. The letter may warn that, if the recipient does not dis ...
orders against Phillips, Mroz, and SouthPeak Games for submitting incorrect
SEC filings, which SouthPeak Games later stated to have been an
error. After
net losses of and in the first and second quarters of the company's
fiscal year 2011, respectively, SouthPeak Games was delisted from the
New York Stock Exchange in September 2011.
7Sixty, closure (2011–2013)
On July 12, 2011, SouthPeak Games opened a new
digital distribution subsidiary, 7Sixty LLC, in
Grapevine, Texas. Led by
vice 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 be ''
Stronghold 3
''Stronghold 3'' is a 2011 real-time strategy video game for Microsoft Windows developed by Firefly Studios and published by 7Sixty. The game is the seventh in the series after several spin-offs, including a remake, '' Stronghold: Crusader Extrem ...
''.
''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.
Games published
References
{{Authority control
Companies traded over-the-counter in the United States
Video game companies established in 1996
Video game companies disestablished in 2013
Defunct video game companies of the United States
Video game publishers
Defunct companies based in Virginia
1996 establishments in North Carolina
2013 disestablishments in North Carolina