Silicon Knights, which licensed the UE3 from Epic in 2006, claims that Epic misrepresented the capabilities of the engine it provided, causing delays in the development of Too Human which have resulted in considerable losses to the company. Further, according to the complaint, Epic has been either unable or unwilling to fix the difficulties with the engine, and has failed to provide support or guidance on how to properly use it.
"For more than a year, we have been trying to reach an agreement with Epic to resolve these issues without resorting to litigation, but were unable to come to reasonable terms with Epic," said Silicon Knights President Denis Dyack. "Regrettably, we are now forced to go to court in order to achieve satisfaction. We remain hopeful, however, that we can reach a reasonable business resolution with Epic at some point."
He goes on to suggest that Epic licensed the UE3 to numerous developers in order to fund the development of its own UE3-based title Gears of War. While acknowledging that Gears of War is "a fun and phenomenally successful game," he added, "As we alleged in our complaint against them, we strongly believe that from the perspective of someone waiting for a game engine that Epic promised it would deliver almost two years ago, it seems pretty clear that Gears was built on the backs of the Unreal Engine licensees. We certainly stand by our allegations in the lawsuit that instead of using our licensing fees to develop and support the Unreal Engine 3, Epic used that money to build Gears."
Thus far, Epic has had no comment except to say that it believes "the claims against us are unfounded and without merit," and that it plans to defend itself against them. A full copy of Silicon Knights' suit against Epic is available here. (PDF format)