Great MMO Company Collapses of Our Time – Cheyenne Mountain Entertainment

Putting your money into this project would have meant you put your money into Cheyenne Mountain Entertainment.

Cheyenne Mountain Entertainment

  • Game That Destroyed Them: Stargate Worlds (plus several unreleased titles)
  • Studio Launch Date:  July 2005
  • Studio Closure Date: November 2010 was when it went bankrupt, but it existed as a shell into early 2011 (and potentially even still exists)
  • Invested In By: Apparently hundreds of independent investors, including lots of doctors
  • Estimated Money Blown: Over US$50m, maybe more
  • Cause of Death: Alleged fraud, doing too much with too little, overpromising, spending all the money and then some

(You can read a longer analysis of Cheyenne Mountain Entertainment of mine written  in the midst of their struggles.)

The story of Cheyenne Mountain Entertainment (CME) is an important one, perhaps even more so since their page has been deleted from Wikipedia. It charts the rise and fall of a company who promised that they wouldn’t just launch with one game, but would also be a publisher of at least three different studios that CME had also set up, all outside of the usual money trail of the video games industry. CME appeared out of nowhere, blazed a hype-fire in the sky for a while then burnt out, leaving nothing of note behind. Unfortunately, that fire was fuelled by other people’s money and the ashes are still being sifted through.

Cheyenne Mountain Entertainment started to attract attention when it announced Stargate Worlds (SGW), a MMO based on MGM’s popular-ish sci-fi IP Stargate. There were some minor announcements about third party tool sets being used, but it was when CME announced that it was also going to behind its own publisher, named FireSky, that things started to get interesting. Oh, and they mentioned their Social Networks At Play (SNAP) concept at that point. Keep SNAP in mind.

CME also managed to attract a bit of notable industry talent – Joe Ybarra is recognised as an incredibly experienced video game developer, while Shane Hensley brought both MMO experience and pen-and-paper-RPG to the table (while he worked on a Deadlands MMO at Superstition Studios).

Here’s a trailer showing off Stargate Worlds:

Along with FireSky, Cheyenne Mountain Entertainment at one time or another was also apparently behind the following game development studios / related entities on top of its SGW work:

  • Superstition Studios
  • Handcranked Games
  • Mass Illusions
  • Knowledge Relay
  • Cine Mundo
  • World Games, Inc.

This was a studio with no income and the only money coming in was given to them by investors, but was apparently trying to operate numerous game studios at once.

So perhaps it wasn’t surprising that 7 months after announcing FireSky, CME had massive cash flow issues and were unable to pay staff for nearly a month (and this non-payment continued for at least 77 days according to my article of the time and was most likely longer). Yes, they were having problems, CME said, but SGW was still on track. Second wave beta testing on the title would occur “early in 2009″.

But that time came and went. CME reacted to statements that SGW wasn’t going to launch by saying that SGW was still negotiating deals and development was continuing.

There are some buildings and they look Egyptian. Nice sunset too.

Look upon my works, ye mighty, and prepare to pay $250 for a platinum membership that you can also invite all your friends to for extra cash bonuses!

Something did happen early in 2009 though. CME’s Chairman Gary Whiting was linked to a multi-level marketing (MLM) scheme called MMOguls that sought to raise US$50m in order to produce video games that players would subscribe to and have a chance of winning prizes, perhaps even a car a month. Seriously. It seems highly likely that the whole “Social Networks At Play” concept mentioned in 2006 referred to something like the MLM launched by Whiting.

Investors started to sue in late 2009. There were claims that Whiting was flipping investor money between various accounts inappropriately, allegedly for personal purposes. CME released a multiplayer title called Stargate Resistance that launched in 2010 only to announce bankruptcy days later with less than US$10k in the bank, no employees and millions owing to creditors. Gary Whiting was fired from CME, with CME  starting litigation against him. Stargate Resistance was taken over by Fresh Start Studios and Dark Comet Games, only to be accused by CME investors of raiding assets, even allegedly stripping the CME offices of valuable equipment.

The courts awarded CME back its assets, only for MGM to terminate its Stargate licence pretty much simultaneously (and also going bankrupt, but that’s a whole other story). Stargate Resistance shut down on January 15, 2011.

Repercussions are still being felt from the CME debacle – in May 2012 investors continued further litigation against Whiting and other CME executives. Whiting has already been ruled against in two hearings about his actions at CME, with investors receiving millions back from those judgements, but there is a claim that he ended up directly and indirectly devaluing CME to the tune of over US$78m.

This wasn’t MMO game development; this was a bloody soap opera.

UPDATE 1 July 2012: To fix a mistake in the article title and in the header section.

2 thoughts on “Great MMO Company Collapses of Our Time – Cheyenne Mountain Entertainment

  1. Pingback: Pick A Winner! | Vicarious Existence

  2. Pingback: What Can We Learn From Picking Winners? « Vicarious Existence

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