Tiny Diggers – An iPad Construction Truck Game for Kids Age 2-5

Okay, things just went all kinds of insane over at Flagship Studios this afternoon, with the effective result being that Flagship may have lost all of its intellectual properties due to a lack of collateral for the venture capital that has been invested into the company.

HanBitSoft, the South Korean distributor of Flagship Studios’ Hellgate: London, released a statement today announcing that they had taken control of Mythos and Hellgate: London from Flagship Studios, due to most of the paid subscribers being in South Korea, and that substantial investment that they had in Flagship was not going to be returned any time soon.

via Voodoo Extreme

Upon hearing of this news, Flagship responded, stating that they had no idea about their property being taken over, and that they would use all available avenues to sue HanBitSoft for trying to appropriate their software.  Flagship said that no negotiations have taken place, and that they are still in control of their software licenses.

Seems legit enough, until HanBitSoft responded with the following quote:

Please understand that the facts are (1) HanbitSoft is an exclusive licensee of both Hellgate and Mythos in Asia, with rights to sublicense the games; (2) in addition, HanbitSoft is a secured creditor who has been pledged the Mythos (but not the Hellgate) intellectual property as collateral for a loan; (3) Comerica, another secured lender, has been pledged the Hellgate intellectual property as its collateral for a loan; (4) Flagship Studios does not currently own the intellectual properties to either game, which are held in separate companies subject to the security interests of lenders, and Flagship Studios’ interest in those companies is also pledged to its lenders; (5) it is unfortunate that Flagship turned down additional investments HanbitSoft offered to make that would have allowed it to keep its doors open, but HanbitSoft hopes to work with Comerica and some of the team at Flagship to see if there is a way to continue to generate content to keep Hellgate online in Asia and to finish the development of Mythos.”

As of the last hour or so, it seems that the subscription links for Hellgate: London have been removed from the Flagship site, and that the unsubscribe links are gone as well.  Coincidence or evidence of the end of the road for Flagship studios?  Who knows, but we will keep the story updated as new facts arrive.