Hi there friendos. Today we are starting our first series, a look into the dark side of gaming. We are going to talk about one of my favorite tragic gaming stories, the fall of Cheyenne Mountain Entertainment or CME. If you’re anything like my friends you’re probably thinking why the hell do you care about CME? Or what the hell even is CME? Or why on god’s green earth would I care about CME? And I’d reply back, ‘shut the fuck up and listen” (or read in this case) and all your questions will be answered (except in this case I’d say it nicer than that because I value you, pweaseee keep reading this site).
A Summary of Events, and why you Should Care
A company appears out of nowhere and announces an MMO with a major IP. This company decides its going to throw money around faster than me at a strip club, and where did this money come from? Just about everywhere except from the company itself. Along the way CME does just about everything wrong, got itself entangled with shady people, alienated it’s employees and finally blew up in particularly spectacular fashion. Why should you care? Well mainly because the story has largely been erased from the internet and its important we learn from history. Also because it’s crazy, fun, and stupid on so many levels that every twist is followed by another twist. Read on knights!
A New Company Emerges
I’ve set the scene a bit (and hyped this story) so let’s get into it. Cheyenne Mountain Entertainment arrived on the scene and brought with it incredible hype with no discernible reason for the hype. This studio had never done anything in the scene and managed to secure capital from hundreds of investors (if you believe the rumors). Without ever having shipped a game it managed to obtain the license to one of most popular and beloved Sci-Fi franchises of all time from a giant media company.
They announced Stargate Worlds an MMO set in the Stargate Universe and created its own publishing arm FireSky games. Not only was a company, with no experience to speak of and no record of success developing a game with a major studio license, but were now publishing as well. The tangled web doesn’t stop here…oh hell no’s. FireSky announced that they would be publishing 3 other games from 3 different studios. How though food a brand new publisher with no record of success quickly obtain these publishing rights? Well silly, every single one of those studios was also set up and run by Cheyenne Mountain Entertainment…duh!
I know this tangled web is confusing so let me sort it out for you, by literally listing every entity owned by CME.
- Cheyenne Mountain Entertainment a developer producing Stargate Worlds.
- FireSky a publisher that would publish Stargate Worlds and the games produced by at least 3 of these studios all owned and operated by CME.
- Knowledge Relay
- Handcranked Studios
- Mass Illusions
- Cine Mundo
- Superstition Games
- World Games Inc
I’m not joking. However things kind of weren’t going poorly in the beginning they had a ton of capital from investors, a massive IP, and what’s seemingly crazy (to me at least) the company actually managed to recruit some of the top talent in the industry. They got the guy behind the original Madden for fucks sake. Big names legitimately wanted to work here, so where did it all go wrong?
The Mountain of (Money) Problems
Well the first problem is pretty simple the company had capital on hand but they were making zero income while running so many shadow companies. That capital had to be used to create 3 different games, while all of those companies were also generating zero income. The company saw an influx of investor money and someone thought, “well shit we got a lot of money let’s spend it as fast as possible! I mean video games don’t cost money to develop right?” They began spending exorbitant amounts of money producing little results along the way. Somehow with no income and already working on one MMO that was undoubtedly sucking down money, Joe Ybarra revealed the company started work on a second MMO. This MMO was likely the Deadlands MMO being worked on by Shane Hensly at Superstition. CME licensed use of the Unreal Engine and use of BigWorld a tool suite prepackaged with everything essential for an MMO. Without needing to develop your own engine things should have run smoother and faster. This actually may have been the only smart move CME made but it still cost money. It doesn’t stop there because in perhaps the stupidest decision I have ever seen in the history of gaming a company already leaking money like a sieve decided to take over a train station in Germany During a convention with intent to promote their game, the company paid to rent the station for a day. They essentially threw a party, with people in Stargate costumes handing out prizes like T Shirts and dog tags. I am incapable of attempting to guess how much money it costs to rent an entire train station.
Just in case you thought that was the only awful marketing tactic I’m here with knowledge.
CME is very smart and all their decisions work out all the time with no problems. So they decide the best way to further promote their game was to, (drumroll please), take a fleet of Hummers to the game convention. So they rent a fleet of hummers to drive around in doing interviews with the press, during a fucking gas crisis in 2008. They needed Stargate Worlds to be a commercial success, so one could possibly argue going overboard on marketing was necessary but they were hemorrhaging what little they had left in the bank.
With the massive amount of projects (seriously 8 companies…EIGHT FREAKING COMPANIES) the company was dirt broke. The company had lost so much money they did the smartest cost cutting measure and decided that they no longer needed to pay their employees any money at all! A novel concept indeed, even with CME unable to pay their employees the studio claimed that Stargate Worlds was still on track. Nothing to see here move along.
I can provide you with an important number. 120. Why is that number important? Well my friends, according to a website aptly titled Days Since Cheyenne Mountain Employees Have Been Paid, and run by a whistle-blower inside the company 120 days was how long it took between the time the employees stopped being paid in December 2008 and when they resumed being paid in March 2009. The website no longer exists but luckily we have ways to look at it anyways. 4 months! I can’t think of a single job I’d stay at for a day without being paid but the team at Cheyenne Mountain must’ve at least genuinely been passionate about the project because they continued work on the game without pay. I wish I could tell you that things get better now. They don’t they get worse.
Sue Gate: SG1
Take a drink my friends because things are about to get crazier (I know I know how?)
Welcome to the tangled web of lawsuits that I’m going to attempt to unpack for you. Let’s attempt to make some sense of this mess (Seriously wish me luck here).
Just a short while after the ever intelligent marketing strategies of CME, the company gets sued and begins its deathmarch towards bankruptcy. The bankruptcy itself has a lot of legal implications also (fun fun). During this time MGM also filed for bankruptcy which is only important in that they owned the Stargate property. Finally waaaaay back when FireSky was formed they announced something called SNAP (not the government program all their employees needed to survive for 4 months, BOOM!!). This is important because it is a central point of the first lawsuit we are going to talk about.
Social Networks at Play Gary Whiting and the Tangled Web of Lawsuits that Mercifully Killed Cheyenne Mountain
Gary Whiting was the founder of Cheyenne Mountain Entertainment and the head of the board of directors for the company. So when a lawsuit dropped against Gary Whiting, and some company called MMOguls people were understandably concerned. CME themselves were brought into the case as well because there was a connection between CME and MMOguls.
Let’s get into the weeds a bit. MMOguls was a self described multi level marketing scheme. MLMs are not always illegal, but when they become pyramid schemes are. So what exactly was MMOguls? Well for the low low investment cost of 250$ you could become a first level member of the “social network at play”. Your job as a member would be to sign up people below you and you would earn money off that. This continued for them andcontinued all the way down the pyramid. MMOguls was a clear pyramid scheme, and one that was founded off the idea of a Social Network attached to gaming. I’m unsure of how any of this was a Social Network At Play. However that term was first used when CME announced the creation of FireSky thusly involving them in the suit.
MMOguls was sued for fraud in Nevada, and things got messy. CME was really struggling to keep the lights on so they forced out an FPS game Stargate Resistance to try to inject cash into the company. Only a few days after the release CME filed for bankruptcy. Reports indicated that CME had only 10k in the bank, had been locked out of its office for failure to pay rent, and had effectively zero employees. As the fraud case against Gary Whiting, MMOguls and CME got underway CME attempted to distance itself from Gary Whiting. Beginning our next part of Sue Gate:SG1 the bankruptcy of CME, and the attempt to free itself from the man who created it. Welcome to my continuing hell.
After the fraud charges came out CME and FireSky attempted to distance themselves from MMOguls claiming they had no connection with MMOguls. They claimed that MMOguls used their name without the companies knowledge. What is certainly fact is that Gary Whiting was involved with MMOguls and likely authorized the use of CME’s name in the marketing of MMOguls. The board moved to remove Gary Whiting, and obtained a restraining order against him. The court case went forward and the court found that there was not enough evidence to remove Gary Whiting and further revoked the restraining order. Gary Whiting maintained his place on the board and continued to lead Cheyenne Mountain on their death march.
Bankruptcy proceedings went forward, and more confusion happens as some former CME employees start a company Fresh Start Studios. An agreement between Fresh Start and CME was made with Fresh Start taking development control of Stargate Resistance and CME retaining the rights. Fresh Start paid for this agreement, the only income that CME ever made. The bankruptcy court ordered a receiver be appointed to take over control of Cheyenne Mountain Entertainment to protect it from further harm. Prior to this MGM, itself going thru bankruptcy proceedings, terminated the Stargate license agreement. Upon his takeover the receiver attempted to obtain a new license from MGM but they refused. An anonymous employee of MGM noted this was to clear their hands of this whole mess before their bankruptcy (who the fuck can blame them this isn’t game development it’s insanity). So MGM wouldn’t budge and CME had essentially no other assets (due largely to a complete failure of management). The receiver at this point recommended a complete liquidation of all assets of Cheyenne Mountain Entertainment and its entities which included FireSky and all the other studios it had intertwined itself with. The court agreed (because what the fuck else were they going to do with a company with zero income, zero employees, and zero assets). So the court set a date in which anyone with a claim against any CME property could file a claim for liquidation. This was the official beginning of the end for CME, FireSky and it’s other properties, liquidation began in 2012 and Cheyenne Mountain Entertainment ceased to exist but this was not the end for Sue Gate: SG1
Before the end of CME and during its bankruptcy Fresh Start Studios and Dark Comet Games, another studio made by former employees,o steal assets associated with the games, tried obtaining rights to continue development of StargateWorldsand Resistance and so they took the gave assets from the company. CME and other investors sued Dark Comet and Fresh Start saying that this transfer of assets was an attempted hostile takeover and was illegal. Things were getting pretty ugly at this point, Fresh Start employees attempted to actually steal computers from the CME offices, and police had to come stop them. During the court case the court ruled that the receiver had worked appropriately with Fresh Start on continuing development of Resistance. However assets for Stargate Worlds were ordered to be returned to CME. Fresh Start was permitted to continue work on Stargate Resistance and to keep assets needed for that game. They managed to keep the game running with several updates until January 2012, 2 months after MGM had terminated the Stargate license agreement.
Things are almost over but there’s one more lawsuit to cover and this one might be the most ridiculous of them all.
Welcome to the lawsuit that will shed the most light into just how fucking insane Gary Whiting’s tangled web of companies and sub companies is. Welcome to Cheyenne Mountain Entertainment finally saying fuck you and suing Gary Whiting. 3 shareholders in CME decided to sue Gary Whiting asking with 23 other people, and 9 companies. CME joined the lawsuit, and so begins the final piece of insanity in a story mostly filled with nothing but insanity. The lawsuit was for among other things fraud, civil RICO (which is Racketeering Influenced and Corrupt Organizations, RICO is how the federal government finally fucked organized crime), and unjust enrichment. It would actually take hours to try to explain everything covered in the lawsuit so I’m going to attempt to summarize it as best I can. Get ready for the wildest ride.
Before we get into the actual lawsuit it is important to note that Gary Whiting had functionally full control of Cheyenne Mountain thru another series of tangled companies. Explaining in detail would actually take way too much time but the summary is that CME was owned and managed by another company that was owned and managed by another company that was owned and managed…you get the picture, all the way down the line every company was owned and operated by Gary Whiting. So Gary Whiting had functional full control over CME and the board of directors was entirely unable to stop any decision he made. There was no checks or balances Gary made all decisions.
The first thing covered in the lawsuit was the Vista Ridge Subscription Agreement followed by the Garvick Subscription Agreement, and I’m going to group these two together because they were entirely identical. Vista Ridge and Garvick Properties are both managed and owned by Gary Whiting. In the Vista Ridge Agreement 22 million shares of stock were sold to Vista Ridge and Gary signed the agreement on behalf of both companies. The price agreed upon was 19 million dollary doos. The Garvick Agreement was 21.25 million shares valued at 18.437 million dollars. Again Gary signed on behalf of both companies. Neither Vista Ridge nor Garvick paid for the shares. This continues for like a looooong time. So Gary Whiting was essentially selling stock to make it seem to the board of directors that the company had money it never had. He promised them money he didn’t have and couldn’t pay without telling them that these companies were owned and operated by him. He made the agreements contingent upon the releases of games that would never see the light of day and he continued to line his pockets the whole way. He was found guilty and ordered to pay restitution to everyone. CME mercifully came to us end.
What can we learn from this?
Gary Whiting was a monster who created a tangled web of companies and lies in order to solely control a gaming company he had no idea how to run and no vision. He created a massive storm of shit in his wake and because of all this he ruined a gaming property that had massive potential. Thru it all he showed zero remorse. This fucking man has a LinkedIn profile where he proudly displays CME on his resume and he talks about how he built it and blah blah blah (of course he convientley forgets about destroying the company and burying it).
If alarm bells are ringing and things feel off you need to investigate. If anyone at CME acted on their suspicions I wouldn’t be here today to write this article.
Much Love ❤
Abigail
The Gamers Kingdom 