For those who have been wondering about the status of the ongoing class action lawsuit against Chronicles of Elyria developer Soulbound Studios, it looks as though that lawsuit has been dismissed in court. As such, Elyria founder Jeromy Walsh took to the quarterly update to do a victory lap of sorts over the news.
The lawsuit, which was filed in response to Chronicles of Elyria abruptly shutting down after delivering not more than a basic parkour demo in 2020, was filed by backers who were demanding refunds of their investment in Elyria. This is because Elyria, a Kickstarted MMORPG, failed to deliver on the promises made by Walsh when the funding began.
Walsh a few weeks later rolled this back, claiming that he effectively misspoke and that the studio hadn't shuttered. However, a few weeks later, backers who were filing suit had already started to hear from the Washington State Attorney General on the case.
The lawsuit has progressed since then, with updates over the last two years such as the fact the California suit was merged with the Washington lawsuit as well as the news that the suit against SBS had to conclude before the Xsolla fight could be taken up coming in slowly. However, in an update to the Elyria website, Walsh himself is stating that the lawsuit itself has been dismissed. And the fact that he's publicly talking about it lends weight to the claim, as legally speaking most companies will not speak directly on ongoing litigation.
However, discussion in the ongoing COE Lawsuit Discord channel where many of those who have filed suit against SBS have gathered started to talk around the 6th of October about the possibility the lawsuit itself was dismissed. The official court document, filed on the 3rd of October, confirms this.
As such, Walsh took to the most recent quarterly update to give readers an update on the studio, Kingdoms of Elyria, and do a weird victory lap regarding the lawsuit's dismissal.
"Last week, the United States District Court for the Western District of Washington dismissed the class action lawsuit which was filed against Soulbound Studios. As a matter of law.
(Sidebar: I considered ending that sentence with an exclamation mark, emojis, and even an excited expletive. But the fact is, there's no punctuation or emoji that adequately conveys how relieved I am by this decision. So, I just went with the classic, informational period.)"
Walsh goes on to spin this as a victory for those companies who are looking at crowdsource funding as their primary way to make a game happen, stating that those who raise the funds to build the game need to feel "secure" in that they won't be required to pay back funds in the result of a failed project.
"But for crowdfunding to encourage innovation, companies need to feel secure in the use of the funds they've received. If a failure (or even just delays) means they'll have to repay the money, then the obvious question, "how do you repay money you no longer have?" quickly negates one of the key benefits of crowdfunding."
Weirdly, while this is an obvious victory for Walsh himself, he extends that victory to the backers of Chronicles of Elyria as well, spinning it as a way for the team to now focus all its efforts on making CoE finally come to fruition. This is also before Walsh admits that there hasn't been any meaningful work done on Kingdoms of Elyria, the stand-alone sim that is meant to fuel the development of the MMO that was actually promised, from an engineering standpoint, in months.
Instead, Walsh has been working as a software engineer outside of Chronicles of Elyria to keep the studio afloat, and in line with the previous Quarterly update where he basically claimed he had no more money, Walsh talks about how he's effectively mortgaged his future on this game in order to fund the studio.
Claiming to be $500K in debt without any actual income coming in for two years (as well as taking out over $250K of taxpayer dollars in Covid-19 PPP Loans), Walsh acknowledges too that the dream of being picked up by an investor or publisher is likely out of the window thanks to the lawsuit. He also blames "the current sentiment and misinformation" that exists about SBS on the internet as not being an attractive candidate to be acquired.
Walsh also states that he hopes that this prompts the most "cynical" of backers to give this another try, though if future tests try to throw shady NDA language at them as has been done in the past, they might not.
As it stands now, the decision can likely be appealed in court, though whether those will be willing to move forward on appeals remains to be seen. What also remains to be seen is whether Walsh can hit the updated timeline of 2024 for the release of Chronicles of Elyria.
[Editor's Note: We've updated this post to clarify the timeline of the lawsuit.]