Redmile Entertainment are in dire straights. The publisher for two games including Heroes over Europe which is in development at IR Gurus/Transmission Games, and Sin City (which IR Gurus/Transmission Games were working on before it was passed on to another developer) has released a document on the concerns of the company and what it must do to stay afloat. One paragraph in the report explains bluntly that if Redmile cannot get an increased amount credit within the next 30 days, it will cease all operations.
The problems at Redmile, other than negative cash flows, is the termination of the publishing agreement with co-publishing partner, Atari, for the delay in milestone payments for IR Gurus/Transmission Games. This breach of contractual obligations has caused the local Heroes over Europe developer to sever all ties from the publisher...
On February 11, 2009, IR Gurus Pty Ltd., the Company's developer for its "Heroes Over Europe" title, sent the Company a termination notice with respect to the software development and licensing agreement for such title claiming that the Company failed to make a payment under such agreement in the amount of $281,000.
The solution Redmile hopes to take is listed below, with the publisher planning to renegotiate a deal with IR Gurus/Transmission Games.
(1) The Company is considering all remedies available under its publishing agreement with its partner for its "Heroes Over Europe" title which may include compensatory damages.
(2) The Company plans to enter into a co-publishing agreement for its licensed Sin City video game which will provide the Company with minimum guarantees on execution of the agreement as well as milestone payments coinciding with the timing of milestone obligations the Company has to its developers.
(3) The Company plans to renegotiate both the amount and timing for payment of many of its current payables and accrued obligations.
With only two titles in development, one of which seems to be cut loose and the other expecting some serious delays, it looks like the future is looking extremely bleak for Redmile Entertainment.