When Factor 5 filed for Chapter 7 bankruptcy on May 13th of this year, they had an estimated $50,000 to $100,000 in assets, with debt estimated at between $1 and $10 million, with 69 claims for unpaid wages in excess of $900,000. The lawsuit alleges that, prior to the filing, Factor 5 and its three founders transferred company assets to a limited liability company called Blue Harvest, now White Harvest, including original intellectual property and the partially completed code for a Wii installment of the Star Wars: Rogue Squadron series. As the employees' lawyer James Smith explains:

"We believe and have alleged in the complaint that Factor 5 and White Harvest are essentially the same company, being run by the same people, being represented by the same sets of lawyers, with all the same management and ownership and control, performing all the same work that they were doing at Factor 5, just now with a new name and a new address"

The employees are understandably upset. According to the filing, employees at the studio weren't paid after November 1st of last year, after which they were laid off with little notice on December 19th, right before Christmas.

If the allegations are true, this would mean that Factor 5 took assets that could have been negotiated in order to pay their workers and passed them over to another company to save them from sinking along with the rest of the ship.

With the defendants' lawyer declining to comment on the situation, we're currently only seeing one side of the story of course, but quiet lawyers aren't generally a good sign. We look forward to seeing how this whole thing plays out in court, should it make it there.

Employees sue bankrupt San Rafael video-game company [Marin Independent Journal via Edge]

Ambition is what drew me to Factor 5.

As a gamer I came to the studio's work a little late. I missed their Turrican days, their era of making games for the Super Nintendo and Genesis. I came upon them as an N64 gamer, spotting their logo at the intro to Star Wars: Rogue Squadron. That 1999 shooter was one of the first games to utilize the N64's RAM expansion pack for improved graphics resolution. That was the first hint to me that Factor 5 was a studio interested in pushing technology.

The next game Factor 5 game I played — still before I had become a reporter — was the one that forever charmed me to the studio. It was Star Wars: Battle for Naboo, a new-Trilogy sequel to Rogue Squadron. A hidden feature is what won me over: stuffed into its N64 cart was audio developer commentary for each of the game's levels. I'd never heard such a thing before.

This was a studio of developers with whom I wanted to speak. And I would.

At the start of the GameCube era, in 2001, I was just beginning to cover games. I played Factor 5 GameCube launch title Star Wars Rogue Squadron II: Rogue Leader as a novice reporter at my first E3. It is, to this day, among the best-looking games developed for a Nintendo platform. I don't remember talking to Factor 5's U.S. president Julian Eggebrecht then, nor for its 2003 sequel, Rebel Strike. But it was by that second GameCube game that I was writing a freebie column for IGN about the GameCube.

What I wrote about Rebel Strike highlighted the second defining characteristic of Factor 5 for me: they bit off mouthfuls at a time. Rebel Strike was not just a full new game. It housed the entirety of its predecessor, re-crafted for split-screen co-op. It contained not just audio commentary but making-of documentaries. But there were signs of rough edges: peculiar dips to black between gameplay and in-engine cutscenes; a group of on-foot side-scrolling levels that played poorly and curiously lacked audio commentary.

In 2006, I finally got paid for something I wrote about Factor 5. I was at MTV and covered the topic of developers using audio commentary. I referenced Factor 5 as a pioneer.

Factor 5 disappeared from my radar after that until I finally met Eggebrecht in person at a Sony event in 2006. He was showing, for the first of several times, the dragon-combat game Lair. He was a champion of PS3 motion control, a booster for the system's technical prowess and ambitious as ever. He wanted a game with air combat, ground combat, allusions to the ethics of modern war, hooks to the PS3's web browser, elaborate cutscenes and so much more. There were those two signatures of Factor 5 again, summed up in one word: ambition.

But Lair was rougher than Rebel Strike. Factor 5 barely attempted to hide this. In one of the more open displays of developer frustration with their own game, the studio included commentary in Lair that alluded to the game suffering from what was described as a curse of the dragon games, a problem that they said extended to personal problems among some of the staff. Following up in an e-mail, Eggebrecht said to me in 2007: "I am not a believer in ghosts, but this one was haunted."

Factor 5 faded away again, rumored over the next two years to have canceled its deal with Sony, possibly returned to working with Nintendo. Then came the news reported in Variety that Factor 5 was one of the studios suffering from having made a deal with the collapsed publisher Brash. I reached out to Eggebrecht again, who all but confirmed that the studio had been making a Superman adventure and expressing hope that the game would still come together.

"With that said," he wrote to me in November, "Things are obviously in flux and we hope that the game proves to be as indestructible as our hero…"

And then? Today's news. Factor 5 in the U.S. is no more. I've not heard back from Eggebrecht about this turn of events. The statement on the company's official website indicates that its German parent company still has projects coming.

There may be a future yet for Factor 5. There definitely was a past worth appreciating.

Rumors of the Lair developers closure surfaced in December of last year, following rumors that half of the staff had been let go. The rumors pointed towards the cancellation of their Superman project due to the failure of Brash Entertainment as a major factor in the layoffs and closing, which is backed up by the official statement appearing on the Factor 5 website today.

We are sorry to announce the closure of the San Rafael-based Factor 5 Inc. studio, but the obstacles created by the sudden bankruptcy of Brash Entertainment for the continuation of operations have turned out too great to overcome in the current economic climate.

Note that this development doesn't mean the end to the Factor 5 name. The statement continues:

Factor 5 GmbH, which has been creating games since 1998 with its headquarters in Cologne, Germany, is completely unrelated to Factor 5 Inc. and the circumstances surrounding Factor 5 Inc.'s recent challenges. Although we are saddened by Factor 5 Inc.'s situation, our corporation will remain unaffected by these developments and has partnered with both old and new friends in the industry who will reveal our upcoming projects over the next months.

In other words, that other company had problems, and the German branch of Factor 5 would like to put as much distance between those problems and it as humanly possible.

We extend our sympathy to those left jobless by the studio's closing, even if most of them have hopefully moved on to bigger and better things by now.

Factor 5 Website [Official Site]

Unseen 64, where games goes when they die, has concept screen shots and a brief video of the planned PlayStation 3 and Xbox 360 game, visuals dating back to when Factor 5 employees were still being paid. It looks good enough, but also looks about as finished as the Flash game that BottleRocket was working on for Brash before the publisher's collapse.

And Doomsday looks spectacular.

There's really not much to see here, outside of a few environment concepts and early visual direction. The game was due to ship sometime in 2010, following a formal announcement at E3 2008 (which never happened).

More screens and a brief pre-rendered concept at Unseen 64.

Superman (Factor 5) [X360/PS3 - Cancelled] [Unseen64 - thanks, Miklós!]

This one still gets the rumor tag because there's no name on the source. But says IGN's Matt Casamassina over on their boards (subscription required):

(Casamassina) [I w]as hoping the rumors weren’t true. Contacted Julian over at F5 to shed some light, but he didn’t get back to me. Got an e-mail from an inside source tonight:

“Hi Matt,

How have you been? Haven’t seen you guys since E3. I hope that you’re doing well!

[Redacted] wanted me to contact you with some late breaking news. We just learned from inside sources that developer Factor 5 has officially closed their doors as of today. That’s some pretty big news considering that those guys have been around for quite a while. It’s definitely a real shame! I hope that this information is helpful to you. Take care, and please say hi to Bozon for me.”

And another one bites the dust. Since everyone's strategy is to fire their way back to full health, may I make a simple request? Please adjust the fiscal quarters ahead by one month. Like daylight savings time for Wall Street or something. That way, 500,000 people won't be getting fired right before Christmas, they can get pink slipped in January and not have their holidays ruined. At least give us that.

Factor 5 Dead Too? [CasuallyHardcore (which notes Factor 5 published the Star Wars/cosmetics crossover game "Rouge [sic] Leader.") And thanks reader Marc S.]

According to Edge's anonymous source, the alleged details of Factor 5's funding problems, as announced on an employee's personal blog, were spot on. Employees haven't had a paycheck since mid-October, the source said, adding that the animator who dished the dire details on Factor 5 has since left the company — and may even facing legal ramifications for making it's problems public.

Factor 5 was said to be seriously financially impacted by the folding of Brash Entertainment, which itself laid off staff in November.

Source: Factor 5 Cuts 37 [Edge]

Animator Sam Baker wrote on his personal blog, via 1UP, that after a brief leave of absence at another company, he'd returned to "find out no one at Factor 5 had been paid in a month.... and we weren't going to any time soon." Baker writes that the financial situation became more dire, with health benefits being cut.

And then? "Then things turned bad..." he wrote.

Baker writes that the project he and other Factor 5 employees were working on was put on hold, citing a lack of "proper funding."

He notes that the nixed project was already eight months into development. In March, the doomed Brash Entertainment announced it had signed on Factor 5 to do a licensed game due in 2010. Baker writes in a follow up post (he has since deleted the original post and all other entries from his blog) that "This does not mean that we've stopped production on [the Brash] game, or that it was ever even in trouble."

In his original post, Baker paints a very gloomy financial picture for Factor 5, writing that president Julian Eggebrecht "basically told us that if we didn't receive funding in 1 week, all of us should move on and look elsewhere for another job." His subsequent post reads like an attempt to retract some of that.

Factor 5's last game, Lair, was released in 2007 to a mostly negative response. It was rumored to be working on a Wii title and a game based on DC Comics' Superman.

We're reaching out to Factor 5 to try to learn more about the situation.

More Raining, More Pouring... [Blogspot via 1UP]

More than 20 people have been let go across multiple departments, according to a Brash spokesperson.

Affected by this move will also be the closing of some open positions that the company had planned to fill this fiscal year. Employees affected by this action will receive severance and extended benefits. Brash Entertainment will continue to strategically work on its business including the upcoming release of Six Flags Fun Park for the Wii scheduled for this December, and a video game based on the SAW movie franchise for release in 2009.

Variety is reporting that the struggling developer's problems go much deeper.

According to the story that ran early this morning, Brash is working with studios to return licenses or sell them to other publishers. They've also stopped paying developers.

Variety also reports that the company has canned Superman which it was working on with Factor 5.

Tough times all around, it seems.

Exclusive: "Kid" Icarus Wii Concept Artwork Revealed [Kombo]

We're already working on a title that is more than two years out, and because the filmmaker is a game fan who is really excited about how we want to expand on the story of the film, we've been given a lot of latitude. It's been really fun to dig deep into this universe.

Brash Entertainment Signs Multi-Game Development Deal With Factor 5

HOLLYWOOD, Calif., March 13 /PRNewswire/ — Brash Entertainment today announced a game development deal with California-based game development studio, Factor 5. Under the terms of the worldwide agreement, the partners will collaborate on an unnamed title releasing in 2010 to be announced around the E3 Expo in July.

In addition to creating the multi-million selling STAR WARS: ROGUE SQUADRON franchise, INDIANA JONES, CONTRA: THE ALIEN WARS, LAIR and the classic TURRICAN franchise, Factor 5 is well respected for driving the technology of games. Factor 5 was a technology partner in the development of Nintendo's Wii and GameCube consoles, provider of the MusyX sound tools, partner in the Sony PlayStation 3 Edge toolset group, and has pioneered many technological advancements in the areas of audio and visuals in video games in collaboration with Dolby Labs, THX, and AMD/ATI.

"We do our due diligence on potential partners; we want to understand their in-house tech, and get to know their team and its capabilities. Factor 5 has a solid track record in creating licensed games that, in combination with their technology expertise, makes them an ideal partner," said Mitch Davis. "But what really cemented the collaboration was their passion for the IP and the world in which the game will live. Because that's when you are going to get really good games — when the people who are making it are really enjoying the process."

"Typically, there are two issues developers have with making a licensed game. First, they tend to have shorter development cycles. Second, there are often very tight constraints on how you can portray the world of the
IP, its characters and story. The resulting lack of creative freedom can be very frustrating — especially when it's a world you are excited to explore," said Julian Eggebrecht, President and Co-founder of Factor 5. "But collaborating with Brash is much different, we're already working on a title that is more than two years out, and because the filmmaker is a game fan who is really excited about how we want to expand on the story of the film, we've been given a lot of latitude. It's been really fun to dig deep into this universe."

If we find a chance in the future that would bring Lair to the audience which didn't get any access, that would be fantastic. I can't say anything quite yet, but there might be something in the works there. We might have a chance yet to bring those back to the table and hopefully, if that should happen, they would give the game a second chance.

So what is it, if it's not all that? Could it be that 3D Turrican update Eggebrecht hinted at to Gamasutra last Spring? With all those Turrican ratings popping up on the ESRB lately, we wouldn't be surprised. In fact, delighted might a good word.

Official: Factor 5 Back on Wii [IGN]

While we've heard whispers that a new Factor 5 developed Turrican game may be in the works, it would seem that Julian Eggebrecht and crew are waiting for something to light a fire under them. What's it gonna take, guys?

ESRB Game Ratings [ESRB]

Factor 5 honcho Julian Eggebrecht must be exhausted from constantly "defending" his company's poorly received PLAYSTATION 3 title Lair and its hit-or-miss SIXAXIS controls. G4 caught up with the Dragon's Lair fanboy at Tokyo Game Show to get one more justification out of Mr. Eggebrecht whose game has been retitled Rise From Lair in Japan. I respect what Factor 5 was trying to do, but trying to target gamers who aren't hardcore with a PS3 game? Simply puzzling.

Hopefully more publishers will see the low cost and potentially huge benefit in offering their soundtracks on iTunes. Because while Kotaku can't speak for you, we'd love to hear the surprisingly haunting melodies of Pony Friends with the click of a button.

LAIR Score Now On iTunes! [via gamelife]

So hit the jump for our Frankenreview: the longest, most obnoxious review title you've ever heard. And find out why, aside from the questionable control scheme, most reviewers are hating on the game.

IGN
The dragon fights in this dragon game are no good...The takedowns — which have you fly up on a foe, jump onto the beast, kill the pilot and take out the dragon via some quick action events — are cool, but they seemed to be the minority. One of the more prevalent attacks had us flying side-by-side with a bad guy and shaking our controller left to right...The next battle method had our dragon and the opposing dragon face to face falling toward the ground...Sound cool? It wasn't, and that pretty much sums up Lair.

Yahoo Games
The reason to play Lair is the phenomenal graphics engine, which is able to display Lord of the Rings-size battles at 1080p resolution with a draw distance that goes on for ever. This is a stunningly lovely game to look at, especially when in the air...[but] some areas will chug down to a relatively slow frame rate, hampering the presentation. There are also issues like the invisible wall that bounds certain flight areas. Lair wants to present a massive world, and while it can do so visually, you won't be able to go just anywhere you like.

Variety
Unfortunately, the dragons in the game all look similar and blend into the mostly gray-and-brown backgrounds, making it hard to differentiate allies from enemies. The developers at Factor 5 tried to make up for that deficiency with optional "rage vision," which turns the world into black and white, with enemies highlighted in a red glow. But players have to keep a button pushed down to turn on "rage vision," making it an impractical option in the long run.

UGO
The Rogue Squadron games were something anyone could pick up and play and find immediate gratification with. The same can't be said for Lair. To be bold, I honestly believe Factor 5 has created the first detailed dragon flight simulation. Because of this fact, there is a learning curve that will prevent the easily turned off or fickle gamer from truly enjoying the sweet little gem Factor 5 has created.

Gamebrink
...the game tries to do most of the targeting for you. This would be fine if it worked but alas it doesn't. There are many times where you'll need to lock on to a certain target in a confined area only to have the computer lock on to something you're not facing screwing you over completely...After failing many of the missions an insane amount of times I headed to the bathroom for some relief only to realize that my latest bowel movement was more fun than the "game" I had been playing.
For so long we've questioned the integrity of Lair's motion controls. And many reviewers certainly had their "why no thumbstick" beefs. But I think Lair went wrong in their tedious targeting system, dull/confusing dragon to dragon battles and yeah, maybe a little bit, the imperfect advanced controls. But I still plan on picking up the game and giving it a go. Maybe it's because I still have hope that it's good. Maybe it's because I can't help but watch such an investment go up in flames.

When Sony announced their SIXAXIS motion controls, most of us considered it "me too" technology. When we first tried them in games like Motorstorm, we went back to analog sticks after about 30 seconds of ass-handing. But with Lair? Lair nails the motion control.

I literally picked up the controller, jumped on the dragon and flew around the rich environments with ease. And I'm not talking flight simulator, floating around without a sense of speed flying. I'm talking barreling under arch bridges, twisting around castles and skimming the water to take out boats.

In most PS3 motion-enabled games I've tried, there's a noticeable delay to turning. But Lair steering is really tight. Whether Factor 5 has made some necessary breakthrough in their SIXAXIS programming or dragons just lend themselves better to the peripheral's responsiveness, the controls work very well.

And instead of crashing into the occasional turret, your dragon will sharply cut around objects to save us from potentially tedious gameplay. The effect isn't some cheap way of making the game easier (well, maybe to some extent), but a logical extension of flying on a living being with self-preservation.

Lair is on a scale that has few equals. The demo battle is massive, with the real feeling that you are part of a huge war. And the graphics are mature in a way that reminds me of early Sega in some completely instinctual way.

But if Lair fails in one respect (within my admittedly quick impressions), it's the dragon to dragon battles. They take place too high in the air forcing players to lose any sense of speed and general perspective. I don't know that there was a quick fix here, other than maybe programming the AI with a propensity to draw air battles lower to the ground for more intensity.

Even with the initial wave of really bad press and criticisms from some of my colleagues, I'd consider Lair a sure buy after playing the demo. Amidst its imperfections, the project seems every bit as ambitious as Sony likes to claim.

Capps was first to respond, saying "We absolutely love the press. Everything they say we immediately put into our game." Joking, of course, but it's actually not that far from the truth.

With the press, Capps revealed that they'll actively solicit their feedback because "the press knows games and they know what's gonna sell" with proposed changes being incorporated as late as six weeks before ship date.

Touching on the hardcore Unreal Tournament userbase, Capps revealed that the team at Epic read forums "all the time", saying "We take [their complaints] seriously because we need to keep those guys happy because they're the ones who are going to sell it to another one and a half million users who aren't so hardcore."

Backer theorized that the games industry has evolved faster than its Hollywood counterpart because of this interaction with its users.

Lair developer Eggebrecht suggested that developers take those suggestions from hardcore users "with a grain of salt" citing Factor 5's inference that the hardcore "seem to somehow resent the idea that motion control is the next evolution, or one of the evolutions, where video games will go." With the hardcore gamer "bashing in our heads" over the use of the SIXAXIS motion detection as the primary control method for the game's dragon flight, it might seem like Eggebrecht ignored player feedback.

Not so. The team did make motion control concessions based on vocal, negative opinions from the PLAYSTATION 3 game's Tokyo Game Show demo. Ripping out the motion control for on-foot segments, Eggebrecht called the earlier control scheme "quite frankly, horrible in hindsight" and that listening to hardcore opinions can often be "a blessing and a curse."

And while some game developers may have a bitter taste left in their mouths by a scathing preview or review of a game, Eggebrecht said "The press isn't the enemy. If anybody thinks the press is the enemy, that's stupid. These guys are usually as passionate, if not more so, than you yourself are so work with them."

Eggebrecht revealed his independent studio's difficulties trying to secure a Sony requested Teen rating for its PLAYSTATION 3 dragon game Lair. With a heavy amount of blood and gore, the game was altered to conform to the ESRB's sometimes impolitic ratings criteria. Even though the player can burn scores of human infantry to death, showing blood spraying from dragon wounds resulted in a Mature rating.

Similarly, gory moments of airborne creatures exploding in chunks was met with disapproval, forcing more compromising "hugely problematic" changes to Lair.

And while some violence may be okay for M-rated software, sex in games is a definite no-no. Eggebrecht longed for a time when games can be taken seriously as an art form, not a "corruptive" medium like cinema, comic books and rock and roll music.

Games with intense graphic sex scenes—sometimes mixed with intense violence—were more than acceptable in movies like Oliver Stone's Natural Born Killers and Stanley Kubrick's A Clockwork Orange and Eyes Wide Shut, clips from which Eggebrecht played on stage to underscore his point. But in games, portrayals of sex are strictly verboten. Eggebrecht said this policy "tends to show that games are not being seen even by our own ratings boards as an art form."

I later spoke to Eggebrecht and GDC president Jamil Moledina about Sin City and 300 creator Frank Miller's distaste for ratings systems, self-imposed or otherwise. He wrote in the early 90s that ratings systems inherently create restrictions on an artistic medium sometimes before any production on the work has even begun. While Miller's main concern at the time was for his medium, the comic book, it was becoming clear that his stance on the matter was becoming increasingly, and worryingly, appropriate for the gaming industry.

The Factor 5 president ended his keynote with a call for developers to push the genre's boundaries or suffer the consequences. He asked for his peers to "show me something that proves on all levels that games are indeed an artform . Push the violence, but also push the sex, and push it in an artistic way where it's not really gratuitous, but where it gets the brain going."