iam8bit, a company known for producing physical media and publishing games, has filed a lawsuit against its business partner Skybound Game Studios. The lawsuit, submitted to the Los Angeles Superior Court, accuses Skybound of fraud and failing to provide accurate financial reports as required by their contract.

The two companies began working together in 2021. In the complaint, iam8bit claims that Skybound engaged in a “multi-year accounting scheme” by adding millions of dollars in false expenses and not delivering the agreed-upon monthly financial reports.

iam8bit also alleges that Skybound interfered with a separate deal involving promotional materials for the indie game Stray. According to the lawsuit, Skybound used confidential information about iam8bit’s royalty agreement with Annapurna Interactive to exclude iam8bit from the business arrangement. The complaint further states that Skybound created “almost exact copies” of iam8bit’s marketing materials.

iam8bit was founded in 2005 and has since become known for offering premium physical editions of video games, soundtracks, and collectibles. The company also publishes games under the iam8bit Presents label, including Escape Academy, which is also listed among Skybound Game Studios’ published titles.

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