The longtime chief of Rockstar North is suing his former employers and business partners for over $150 million in unpaid royalties, in the process shedding light on the inner workings of Rockstar.
Earlier today former Rockstar North chief Leslie Benzies (pictured) filed a lawsuit against his former employers alleging that he was owed over $150 million in unpaid royalties after being effectively forced out of the company last year.
Benzies alleges that Rockstar cofounder Sam Houser collaborated with fellow cofounder Dan Houser, Rockstar North, Rockstar Games and parent company Take-Two Interactive to entice him to take a six-month sabbatical in 2014 (following the release of Rockstar North's Grand Theft Auto V) and then remove him from the company while he was out on leave.
As a result, Benzies claims he returned last year (on April 1st) to find he was no longer able to get into his office. He claims to have been formally dismissed from the company at that point, and went on to engage in a mediation with his former employers -- only to have the terms of that mediation breached when Take-Two told the press earlier this year that he had chosen not to return to the company of his own free will.
Now he's filed a lawsuit against the Housers, the Rockstars, and Take-Two Interactive in the New York Supreme Court seeking (among other things) $150 million in royalty payments Benzies claims he was still owed at the time of his departure.
Gamasutra has obtained a copy of that filing (embedded below), and below we highlight some notable takeaways which shed light on what Benzies claims has been going on at Rockstar for the past few years.
Benzies got his start at DMA Design (which became Rockstar North) working on Space Station Silicon Valley, but after that he helped put together the team that created the first Grand Theft Auto game, which spawned a franchise that's now Take-Two's top earner. Benzies has had a guiding role on all of the major GTA games, but according to his filing it was the success of Grand Theft Auto IV that saw the onetime chief of Rockstar North elevated into a circle of "Rockstar Principals" alongside company cofounders Sam and Dan Houser.
This is important because it entitled Benzies to share profits (thanks to something referred to as the 2009 Royalty Plan) from the company's efforts with the Housers. In his lawsuit, Benzies claims he regularly received missives from Sam Houser with statements like "Partners for real!!" and "Together Forever!" However, upon being asked to take a sabbatical in 2014 following the GTA V launch, Benzies claims the Housers continued to allocate royalty payments to themselves -- but not to him.
A significant portion of Benzies' filing is devoted to his background in the game industry, and it's there that we learn Benzies and fellow DMA Design staffer Aaron Garbut began working on a "Godzilla-type game" after Grand Theft Auto and Grand Theft Auto 2 were released to "disappointing scores and unexeceptional sales."
This was around 1999, when GTA publisher Rockstar Games acquired DMA Design, and in the course of prototyping their giant monster game Benzies and Garbut were encouraged to take their work and incorporate it into work on a Grand Theft Auto 3, which debuted to critical and commercial acclaim in 2001 thanks to design innovations like a 3D camera and physics system.
While Benzies highlights this as a turning point for the series (and uses it as ammunition in his argument that he is responsible for Rockstar's success with GTA), it's also an intriguing look at how the first full 3D Grand Theft Auto got its start as a giant monster game.
A key axis of Benzies' arguments is the (professed) disparity between his game development skills and that of the Houser brothers. As an example he cites his contributions to Rockstar's 2010 game Red Dead Redemption, a game whose development was led by the Housers. According to Benzies' filing, he had no assigned role on the project but was regularly called upon by the Housers to fix problems as the game's ship date loomed.
For example, according to Benzies he received emails from Sam Houser in October of 2009 that included excerpts like "We have to fix this. Quickly. Help! I'm freaking!" or "PLEASE help me/us get rdr [Read Dead Redemption] into shape. I am a jabbering wreck right now. I need The Benz!"
Thus, Benzies alleges he was a key resource in non-GTA games as well, and is therefore deserving of the compensation he seeks from his former employers.
Since Benzies is seeking royalty payments, revenue from Rockstar's latest games is a key component of his lawsuit. In his filing Benzies alleges that Rockstar's 2014 hit Grand Theft Auto V had sold over 60 million copies by 2015, bringing its estimated revenue to roughly $3 billion.
But that's just on sales of the game itself -- the game also incorporated a standalone multiplayer mode called GTA Online, which Benzies is credited as director of and which he now claims has generated at least $500 million in revenue.
Benzies takes credit for this since "the Houser brothers had little interest in GTA Online, and did not focus on its development," further crowing that purchases of GTA Online virtual currency using players' real money "have a nearly 100 percent profit margin."
According to Benzies, at the same time he and the Housers were named "Rockstar Principals" they also became equal limited partners in the creation of Another Game Company LP, which he describes as "an entity with royalty-free rights to Rockstar intellectual property and potentially hundreds of millions in Take-Two profits."
Benzies alleges Another Game Company "was created by the Rockstar Principals to allow them to be able to leave Take-Two, and collectively launch a new independent company" while retaining royalty-free rights to use select Rockstar and Take-Two IP, as well as royalties from the aforementioned 2009 royalty scheme.
Years later, of course, Benzies would allegedly be flown out to New York and encouraged by Rockstar to take a sabbatical after shipping GTA V. He alleges he agreed to do so and signed a "Sabbatical Agreement" that guaranteed him all pay and benefits while on leave, but that within a few months his company phone and email account were remotely disabled, some of his key support staff were fired, and payments he says he was owed under the 2009 royalty plan were not made.
A series of events (detailed in the filing below) led to Benzies entering into a mediation with Rockstar, Take-Two and the Housers, and Benzies alleges he and the other principals signed an agreement that they would only give "no comment" replies to any media inquiries about each other until the mediation had concluded.
However, Take-Two received an inquiry about Benzies' employment status from Kotaku earlier this year, and sought to reply with a press release that it submitted to Benzies for approval. Benzies alleges he declined to approve the statement since he and Take-Two were still engaged in mediation, and Take-Two went ahead and issued the statement anyway.
For their part, defendants Take-Two and Rockstar Games have issued a countersuit alleging that the royalty agreement Benzies signed entitles Sam Houser "to determine any royalty percentage allocated to Benzies" and that Benzies "resigned without Good Reason" last April.
When contacted by Gamasutra for comment on Rockstar and Take-Two's lawsuit against Benzies, Locke Lord's Christopher Bakes (who is Benzies' chief litigator) issued the following response:
"The short answer is that we believe the detailed and extensive factual allegations contained in Mr. Benzies’ Complaint amply address those contained in the somewhat sparse Take-Two Complaint. Needless to say, Mr. Benzies believes the issues between the parties are far broader than as presented by Take-Two and Mr. Benzies’ Complaint reflects that.”
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