Beyonce Denied $100 Million Video Game Lawsuit

An appeals court says there are triable issues as to whether Beyonce breached a licensing deal by walking away from a dance video game.

The singer is facing a lawsuit in New York from a company called Gate Five that alleges that on a Christmas Eve "whim" in 2010, she abandoned development of a motion-sensing dance video game that was going to be called Starpower: Beyoncé. Gate Five is asking for huge damages -- "the hundreds of millions of dollars in profits that Gate Five could have realized if she had honored the Agreement," according to the lawsuit.

Last April, a judge denied Beyonce's motion for summary judgment, which was premised on the belief that she had a right to cancel the video game contract because Gate Five hadn't obtained a necessary $5 million financing commitment.

On Thursday, after Beyonce asked for a second opinion, a New York appellate court affirmed the lower court's order.

According to Gate Five, it had developed a technology that was better than the motion-driven video games on the market, that would track a far wider range of body movements than Nintendo's Wii, and the game technology was presented to representatives for top-selling artists including Lady Gaga and the Black Eyed Peas, who purportedly expressed interest.

Ultimately, the company signed a deal with Beyonce, but the contract had a termination clause requiring certain financing by a certain date or else the singer could back out.

Gate Five alleges that it spent $6.7 million on the game and had a financier lined up to provide $19.2 million in financing when Beyonce exercised her termination rights.

The ruling goes onto say:
"In addition, whether the non-finalized financing agreements obtained by plaintiff prior to the financing contingency deadline and prior to defendants' termination of the agreements constituted 'committed financing,' which term is not defined in the agreement, remains an issue for the trier of fact. The record also raises issues as to whether defendants' own actions or bad faith caused or prevented plaintiff from securing financing by the deadline ... and whether plaintiff is entitled to an injunction to prevent defendants from utilizing their services in a competing video game project during the prescribed period."

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