Gaming collectible purveyor iam8bit is suing publisher Skybound over alleged fraud related to cat sim Stray

As reported by Engadget, videogame merch and physical edition company iam8bit is suing Skybound Game Studios over alleged fraud and breach of contract in their multi-year partnership, particularly relating to their joint work on distributing Stray, the 2022 3D platformer where you play as a cat exploring a cyberpunk city.

Notably, Stray's developer, BlueTwelve, and publisher, Annapurna, are mostly in the background of this story. As reported by Gematsu back in 2022, Skybound and iam8bit handled distribution of physical PS5 copies of the game, with iam8bit offering a special edition, as well as a vinyl record of the game's soundtrack.

According to the suit, which is seeking over $4 million in damages, "Skybound failed to provide the monthly reports as agreed," referring to financial records related to the partnership. "It also padded its expenses with millions of dollars in fake line items."

With regards to Stray, iam8bit alleges that Skybound used insider information⁠—including confidential details of iam8bit's royalty split with Annapurna⁠—to cut the smaller company out of a distribution deal for the subsequent Nintendo Switch physical edition of Stray. Iam8bit further alleges that Skybound used marketing material iam8bit created in order to market this new release of Stray that iam8bit was not formally a part of, and would not see revenue from.

Iam8bit largely specializes in boutique, collector/enthusiast-focused physical editions of games and related merch, similar to Limited Run Games. Skybound Game Studios, for its part, is a subsidiary of the larger media concern, Skybound Entertainment. As Engadget points out, Skybound Entertainment is chaired by Robert Kirkman, original creator of The Walking Dead comics.