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Mobile Halo developer sues Microsoft

In-Fusio sues Xbox maker for breach of contract, saying it refused to approve game designs while still demanding payment for exclusivity of license.

In 2005, French mobile game developer In-Fusio announced at the CTIA IT Wireless and Entertainment trade show that it would bring the sci-fi shooter franchise Halo to mobile phones as part of an exclusive three-year deal with publisher Microsoft.

More than a year after the initial agreement and with no Halo game available for mobile phones, In-Fusio filed suit against Microsoft in a Seattle court last month, accusing the publisher of breach of contract.

"Under the Agreement, In-Fusio's Halo programming designs are subject to Microsoft's approval, which cannot be unreasonably withheld," the suit reads. "Nevertheless, Microsoft has thwarted In-Fusio's efforts to develop Halo under the Agreement. Indeed, in the last 11 months, Microsoft has approved no fully-developed In-Fusio Halo game designs; ignoring and then refusing to accept In-Fusio's game design concepts with little or no explanation and leaving In-Fusio little basis to revise its concepts to obtain Microsoft's approval."

Microsoft approved the first project under the agreement, Halo Portal, an application through which users can download Halo ringtones and wallpapers to their mobile phones. However, when the company turned its efforts toward creating an actual Halo game for the mobile marketplace, it claims Microsoft stonewalled it, refusing to approve no fewer than four game design concepts between February and September of 2006 and not offering explanations for the rejections.

According to the suit, the original agreement called for In-Fusio to pay Microsoft guaranteed minimum royalties of $2 million, spread out in $500,000 payments between January 1, 2006, and June 1, 2008. After rejecting In-Fusio's designs, Microsoft allegedly agreed to delay the payment schedule "pending efforts to agree on acceptable Halo design concepts," the suit reads.

However, In-Fusio claims that last November Microsoft sent notice that it would terminate the contract unless In-Fusio made its delayed payment of $500,000 within 30 days. The developer believes Microsoft could not terminate the contract, stating that the publisher was already in breach of the agreement for unreasonably rejecting its game designs without explanation.

As a result, In-Fusio demands judgment that it retains the exclusive rights to Halo on mobile phones for an extended period to be determined at trial and that Microsoft has waived its right to review and approve In-Fusio's Halo products as a result of its bad faith refusal to approve the concepts. In-Fusio is also seeking a cumulative amount of no less than $10,075,000 in damages for breaches of contract and covenant of good faith, as well as legal fees.

In-Fusio has had a publishing relationship with Microsoft since 2004 and has previously published mobile versions of games like Midtown Madness 3, Zoo Tycoon 2, Age of Empires 2, Banjo-Kazooie, Sabre Wulf, and It's Mr. Pants.

A Microsoft representative declined to comment on the lawsuit.

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