£60m video game sold off for £780,000

ALL Points Bulletin, the flagship computer game that cost collapsed Scottish developer Realtime Worlds an estimated £60 million to create, was sold for just £780,000, it has emerged.

Reloaded Productions, a subsidiary of US-based K2 Network, bought the rights to APB from administrators after Realtime went under last summer with debts of more than 50m.

At the time of the deal, the selling price was not disclosed, but a report seen by Scotland on Sunday reveals that the game, which took five years to develop, was sold for a tiny fraction of its development cost.

APB - along with another Realtime investment, Project MyWorld - had made up the bulk of the 24.5m book value placed on the Dundee firm's intellectual property when it collapsed. In total, both projects realised less than 2m.

Realtime, which employed 200 people in Scotland, was founded in 2002 by Dave Jones - the creator of the hit Lemmings game - along with industry veterans Ian Hetherington and Tony Harman. Its demise was seen as a real blow to Dundee's burgeoning games industry.

A report by Begbies Traynor into the administration of Realtime also reveals that while preferential creditors - who include staff owed wages and holiday pay - are expected to be paid in full, there is only around 423,000 left for distribution to unsecured creditors who are owed more than 55m in total.

The bulk of the money the firm owed was to its US-based parent company Realtime Worlds Inc, and is thought mainly to have been cash invested by American venture capital and hedge funds and then loaned to the Scottish operation to fund the development of games.

Major backers of the firm in recent years included Maverick Capital, New Enterprise Associates and UK-based global advertising group WPP, which invested around 5m for a minority stake in Realtime Worlds Inc in 2008 as part of a 31m funding round.

Administrators were appointed in August just weeks after APB had been launched to mixed reviews. Realtime was said to have been struggling to attract enough subscribers for a "live" pay-to-play service.

Reloaded, which last month announced it is opening a development studio in Edinburgh, plans to relaunch the game later this year as APB Reloaded, which will be a free-to-play game.

It is understood that the entire development team working on the Reloaded project to date have been former Realtime staff.

The company's investment in Edinburgh, which will initially see 22 jobs created, is being supported by Scottish Development International and is backed by a 25,000 grant from Scottish Enterprise.Project MyWorld, a platform within which game developers can create new social games, was sold for 1.14m to Kimble Operations, which former Realtime director and co-founder Hetherington is now involved with.

The administrators stressed that the sale took place after "extensive and open marketing", with Kimble offering the best price. They also pointed out that Project MyWorld was essentially still a research and development project.