Skybound Game, a well-known independent video game developer, is currently being sued by apparel company, iam8bit for four million in damages. According to an article by Engadget and other sources, the suit alleges that Skybound Games engaged in fraudulent expenses, breach of contract, and theft original designs.

iam8bit is a multi-faceted company that publishes video games but also specializes in video game memorabilia–notably for their video game soundtrack vinlys and physical editions of indie video games. Skybound Games is a subsidiary of Skybound Entertainment, best known for their original comic book series like Invincible and The Walking Dead. The two companies began their partnership in 2021 to create physical version of independent games and that is when the alleged fraud began, “Since then, iam8bit alleges that Skybound conducted a multi-year accounting scheme and failed to provide accurate financial reports for the partnership each month. “Skybound failed to provide the monthly reports as agreed,” the Los Angeles Superior Court complaint reads. “It also padded its expenses with millions of dollars in fake line items.” iam8bit alleges Skybound has yet to explain the line items, even to a third-party auditor that it engaged.

Additionally, iam8bit alleges in their lawsuit that Skybound collaborated with Annapurna Interactive in secret to cut a deal in regards to the smash indie video game Stray: “The complaint claims that Skybound used trade secrets from iam8bit to secure its own deal for the Nintendo launch of the game. It alleges Skybound used confidential information about iam8bit’s royalty split with publishing Annapurna Interactive to cut out its business partner, while also using “almost exact copies” of its creative output for marketing.” iam8bit’s legal counsel ascertains that the promotional material was designed and developed solely by iam8bit.

From this lawsuit, iam8bit is seeking monetary damages, punitive damages, and attorney fees in compensation. Neither company has released a public statement on the matter.