iam8bit sues Skybound Game Studios for fraud and design theft

Skybound Game Studios is being sued by independent company iam8bit for fraud and breach of contract, including theft of original designs. Skybound Entertainment, the parent company of Skybound Game Studios, is chaired by Robert Kirkman, who is perhaps best known for creating the original comic book The Walking Dead. We reached out to Skybound for comment on the lawsuit, but did not receive a response at the time of publication.

iam8bit is a video game producer as well as a company selling vinyl soundtracks and other geek gear. The company entered into a partnership with Skybound Game Studios in April 2021. Since then, iam8bit alleges that Skybound conducted a multi-year accounting plan and failed to provide accurate financial reporting for the partnership each month. “Skybound failed to provide monthly reports as agreed,” says the complaint filed in Los Angeles Superior Court. “He also increased his spending with millions of dollars in fake positions.” iam8bit claims that Skybound has yet to explain the line items, even to a third-party auditor it hired. The company alleges more than $4 million in damages related to the accounting problems.

iam8bit also accused Skybound of excluding it from an indie video game deal Wander. According to the company’s lawyer, iam8bit designed and developed promotional materials for the launch of Wander on PlayStation and Xbox consoles. The complaint claims that Skybound used iam8bit trade secrets to make its own deal to launch the game on Nintendo. It alleges that Skybound used confidential information about iam8bit’s royalty sharing with publisher Annapurna Interactive to eliminate its business partner, while also using “near-exact copies” of its creative output for marketing purposes.

The full list of allegations in iam8bit’s complaint includes breach of contract, fraud, conversion, unjust enrichment and misappropriation. The company’s legal team is seeking monetary damages, punitive damages and attorney’s fees in compensation.