Home   >   News

UPDATE: Machine Zone CEO sues Kabam after party banter turns sour

A Casual Connect party has sparked a lawsuit
UPDATE: Machine Zone CEO sues Kabam after party banter turns sour
Stay Informed
Get Industry News In Your Inbox…
Sign Up Today

Update 24/08/2015: Machine Zone contacted with the following statement:

"Machine Zone is a quiet company that prefers to focus on our own business, but we are forced into this lawsuit because an executive at Kabam claimed directly to our CEO in front of several witnesses to have obtained Machine Zone's confidential financial information and internal documents.

"Given that Kabam’s current defense is that their executive was lying we are even more certain this action is necessary.”

A wine-soaked spark at a recent Casual Connect conference has combusted into a full-blown lawsuit between Machine Zone and Kabam.

The developer behind Game of War is taking Kabam to court over “misappropriation of trade secrets.”

In layman’s terms, Machine Zone believes that details of its plans to raise $500 million in funding through investors had been wrongfully obtained by Kabam.

Networking turns nasty

The whole fiasco began at a Casual Connect party, when Machine Zone’s CEO Gabe Leydon and Kabam’s director of corporate development Daniel Wiggins were talking together.

During the conversation, Wiggins claimed to have seen a deck from Morgan Stanley that included figures for Machine Zone’s profit and revenue. These sensitive statistics were only available in a confidential pitch document the developer had circulated to a select few.

According to a statement submitted to the San Francisco Superior Court, the document also contained details of in-development technology and games, screenshots, artwork, and other confidential financial information.

Outraged that Wiggins had somehow accessed this information, according to a witness included in the court documents "this was when Mr. Leydon seemed to get really upset and started to shout at Mr. Wiggins.”

The witness, a game developer called Jason Parks, says that Leydon threatened Wiggins with the loss of his job and jumped straight to threats of legal action.

Clearly the altercation was heated, but the lawsuit can be distilled down to the simple problem that if Kabam has access to Machine Zone’s funding document, it possesses information that could give it an advantage over its competitor.

Kabam meanwhile told VentureBeat that Wiggins never saw a document from Morgan Stanley, and his claims at the party were made “in the heat of the moment.”

"This was banter between a mid-level Kabam employee and the CEO of a competitor, at a cocktail party, glasses of wine in hand. They were sparring, with a little braggadocio, a little machismo, in a very immature way. Our employee said something he shouldn't have said. It's embarrassing.

"The fact is there is no document. There is nothing to this. The fact this has gone this far is ludicrous. It's preposterous."