Newsbrief: Physical media company (and game publisher) iam8bit is suing its business partner Skybound Game Studios, alleging that the latter committed fraud, failing to provide accurate financial reports according to contract.

As reported by Engadget, the two companies began a partnership in 2021, but iam8Bit is now accusing Skybound of conducting a "multi-year accounting scheme."

The complaint, filed in LA Superior court, includes accusations that Skybound Games "padded its expenses with millions of dollars in fake line items" and that "Skybound failed to provide the monthly reports as agreed."

It also accuses Skybound of interfering with a deal iam8Bit was working on for promotional materials for indie darling Stray, claiming "Skybound used confidential information about iam8bits royalty split with [publisher] Annapurna Interactive to cut out its business partner," and also claims Skybound produced “'almost exact copies' of its creative output for marketing."

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iam8Bit started up in 2005, eventually evolving into a storefront for premium physical editions of games, soundtracks, and other collectible items. It also publishes games under its iam8bit Presents imprint, including Escape Academy. Skybound Games Studios also lists Escape Academy among its publishing achievements.