What Bethesda is facing
This is what Bethesda is facing:
http://www.brightsideofnews.com/news/2011/10/27/could-bethesda-loose-the-fallout-franchise.aspx
Here's a reprint of my comment:
Even if Bethesda wins the case, they are legally not allowed to release a Fallout MMO until a minimum of 4 yrs after a victory( that will also be delayed with an appeal). So the earliest possible date of a release of a Fallout MMO by Bethesda would actually be in early to mid '16. Yes, that's right, 2016!
Why?Bethesda's Chief Operating Officer has already testified in his deposition that it takes 4 years to create an MMO.
If Bethesda wins and they release an MMO even 1 day before the 4 year minimum, their COO would have committed perjury which would allow for the case to be actually be reopened!
So, in effect, Bethesda's goose is cooked even if they win.
The only sane thing for them to do is to seek a settlement and actually work with Interplay to release a Fallout MMO or buy out Interplay's rights to the Fallout MMO which are still valid in the eyes of the law, the only opinion that really matters.
What we have here is a strange case of Bethesda loading their own gun and handing it to Interplay and asking Interplay's Lawyers to shoot.
If this were the only problem facing Bethesda.
Bethesda has gone on record believing that they were only going to allow Interplay to release a game titled Fallout but not including anything related to the Fallout IP which guarantees that Interplay's Fallout MMO without any Fallout elements is destined to fail the submission requirements and will not receive Bethesda's approval for publishing.
In essence, Bethesda never intended to honor their agreement which is the ground that Interplay needs to make the contract null and void.
That is all the court really needs here. Bethesda's arguments cannot be verified due to the ambiguity of the contract.
But it does not end there. If Bethesda is suicidal, they will risk losing this case.
What happens if they lose the case and they lose the rights to the Fallout Franchise?
Well, the Fallout Franchise accounts for almost 80% of Bethesda's more than half billion revenue the last few years.
If they paid hundreds of millions for the Id Software purchase, chances are they did not do it using all their cash from Fallout 3 and its DLC's. They likely did not have enough cash to do it regardless of their massive Fallout 3 profit.
It is entirely possible and most likely that Bethesda's Parent company financed their expansion via a debt issuance.
Depending on the coupon rate and maturity of their bonds, Bethesda would be in jeopardy of actually being taken over by their bond holders if they have to pay back 100-200 million $ of their Fallout revenue to Interplay.
Interplay currently sits at a market cap of roughly 5 million dollars.
Care to guess what would happen to their stock price if they gain in excess of 70 million dollars as a settlement not to mention keeping the MMO?
Their P/E ratio would be at a minimum be an absurdly low .07
That's right, their P/E ratio would be way south of never heard of parity P/E ratios and it would in effect be inverted instead of normal P/E ratios of 7-100's
For how long does that remain the case?
One last comment:
anybody that has paid attention to the court proceedings by reading the transcripts or seeing the case adjudicated in person would have noticed a severe deficiency in Bethesda's legal team's approach.
We are talking basics like presenting evidence.
At one point the Judge recently admonished Bethesda's Lawyers:here's a paraphrasing of what happened:
I can look at the (Fallout-online)website but I cannot use any of it as evidence. ( The judge's assistant notifies her that it is blocked)The Judge then addresses Bethesda's lead lawyer in a sarcastic tone:"Even if I could look at it, I cannot present it as evidence. That's your job......(awkward pause) and you needed to have done it before entering my court room."
That right there is all one needs to know about the quality of Bethesda's lead Lawyer.
I will leave it at that.
