Stargate Worlds studio faces cash flow issues

by Samuel Axon Sep 18th 2008 at 3:30PM

Filed under: Sci-fi, MMO industry, New titles, Stargate Worlds, News items, Rumors

Get ready for some dubious corporate drama. We were contacted by a tipster claiming to be a Cheyenne Mountain Entertainment employee. He or she alleged, among other things, that CME/Firesky is in critical financial condition -- that it has accrued a large debt, that massive layoffs are planned, and that the future of Stargate Worlds might be in jeopardy. Knowing full well that potentially-scorned anonymous employees are rarely a wholly reliable source, we contacted the company and provided them an opportunity to comment.

We were told that the tip was full of inaccuracies and overstatements. The official comment was this: "Cheyenne Mountain Entertainment is a start up, and like many start ups, we face the typical cash flow issues that all pre-revenue companies face. CME continues to fund its operations in the same way it has done for three years and the viability of the Stargate Worlds project is not in question. We fully expect to complete and ship Stargate Worlds in 2009."

Marketing guy Kevin Balentine assured us that large-scale layoffs are not planned, and that the company's other two projects are moving along as well.

There is an admission here that there are some financial problems, but the true extent is not clear. Despite this, the company has engaged in extravagant marketing endeavors like a caravan of custom Hummers. We're not sure what to make of that.

It would be a shame to lose all that's been invested now. That the failure of the project would be a waste doesn't necessarily mean it won't happen anyway, though. That said, our educated guess is that Stargate Worlds is not in imminent danger of cancellation. The exact numbers provided by the tipster seemed a bit outrageous, and the project is very far along in development.

Stargate Worlds reps have promised that the closed beta test will begin within the next few weeks. Stay tuned.

Tags: breaking, business, cheyenne-mountain-entertainment, cme, debt, finances, firesky, kevin-balentine, layoffs, rumor, sgw, stargate, stargate-worlds, startup, statement, tip, tipster

Reader Comments (Page 1 of 1)

david said on 4:31PM 9-18-2008

Dang, hope it doesnt turn into Funcom... :-\

Dudar said on 9:07PM 9-18-2008

Sounds more like Sigil than Functom to me.

GamesLaw said on 2:09AM 9-20-2008

Sounds like a load of crap. I'm in the beta, and the first stress test starts this week. So, yeah, I'd say hell hath no fury like a developer scorned.

Anadain said on 11:02AM 9-21-2008

Doesn't the NDA prevent you from revealing you're in beta?

GamesLaw said on 6:30PM 9-21-2008

There is no NDA.

GamesLaw said on 6:31PM 9-21-2008

Hmm, my comment didn't go through.

No, there was no NDA for the closed beta thus far. There may be one in the future, or on the actual details of the playtests, but between the time I signed up and was emailed that I was selected, there were zero NDAs.

MarkefOfKane said on 11:35PM 9-21-2008

Really theres no NDA?

http://forums.stargateworlds.com/showthread.php?t=22379

JoeC said on 1:58PM 9-24-2008

If this marketing scheme is true (the decked out Hummers), it's pathetic. I have a friend who is owed a lot of money by Cheyenne Mountain.

Aben said on 9:30PM 9-25-2008

I personally know at least one contractor who hasn't been paid by Cheyenne Mountain. They're worried about how they're going to pay normal household bills and their insurance premiums but no one at CME will return their messages.

It's unethical that CME would engage in such extravagant overseas marketing while giving vendors the short end of the stick.

I would hate to see them end up in a large copyright infringement suit for using content they haven't paid for.

Nutcase said on 2:52AM 9-27-2008

First off CME is Backed by MGM. MGM already invested a lot of money into CME, and highly doubt they would allow it to go under like SG:A did.

Also I don't belive your in beta, and did not sign a NDA. CME/Firesky are very tight on how Alpha/Beta is ran. They won't even give keys to the sites that had giveaway's untill Closed Beta is opened which it is not.

Aben said on 1:39PM 9-27-2008

If they are backed by MGM, why aren't they paying some of their independent contractors? I know for a fact that they haven't.

Why would MGM run the risk of having enormous copyright infringement lawsuits filed against them? If Cheyenne Mountain Entertainment uses
an unpaid vendor's work in the game (Beta or otherwise) they are breaking the law.

It's highly unscrupulous that they hire people by the hour knowing full well they can't pay them on time or ever if they close.

Independent contractors have no protection from the unethical practices of start-ups. They can file a claim, but it does no good if the company goes bust.

The CEO and CFO of Stargate Worlds should be ashamed of themselves.

Patrick Rogers said on 4:39PM 12-04-2008

http://days-since-cheyenne-mountain-employees-have-been-paid.com/

TruthGamer said on 12:07AM 12-05-2008

They haven't paid their contractors or their outsourcers or a number of their employees. Massively was given a tip to really investigate this but chose not to push it, a shame. Back then some visibility might have actually helped.

The financial numbers for CME are disgusting, a lot of wasted money.

TruthGamer said on 12:09AM 12-05-2008

As for MGM sinking money into CME. Not true. CME paid MGM the right for the license ( a big wad of initial cash plus a HUGE royalty fee on profits). MGM has helped a very small amount with marketing. But other than pride and egg on their face, MGM has nothing to lose.