Shocking Lawsuit Against Skybound: “$4 Million Accounting Scheme and Theft of Stray Designs”
Photo by Vitaly Gariev on Unsplash
Source
engadget.com
Published
Dec 5, 2025
Category
Gaming & Entertainment
Executive summary
Skybound Game Studios has been sued by iam8bit. iam8bit entered into a partnership with Skybound in April 2021, where it discovered that Skybound was not preparing the correct financial reports it was required to prepare each month and was inflating expenses with millions of dollars in fake entries. Furthermore, Skybound disclosed iam8bit's trade secrets when releasing its own game. The lawsuit filed by iam8bit includes allegations of breach of contract and fraud. The company is seeking monetary damages, punitive damages, and reimbursement for legal fees.
Analyst insight
Proving that Skybound engaged in accounting manipulation is very difficult, but if proven and if US courts uphold these allegations, Skybound will be required to pay punitive damages in addition to compensatory damages to iam8bit. iam8bit has an aggressive strategy: "We will disclose all the documents we have and prove that creative materials were stolen. If you don't come to the table, we will continue in public." This message has been conveyed to Skybound. Given the nature of the case, it seems likely that an out-of-court settlement will be reached, but Skybound will pay dearly for it.
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