Chinese MMO developer-publisher CDC Games has announced it has filed a lawsuit in the courts of Hong Kong against Mgame over Yulgang (Scions of Fate in the U.S.), for breach of contract, alleging that Mgame has not been providing adequate technical support for Yulgang, and that Mgame has failed to support CDC Games in their efforts to combat pirate servers. The two companies have been in an agreement to publish the game in China.

The contract between CDC Games and Mgame stipulates that Mgame must protect Yulgang from illegal intrusions, and collaborate with CDC should security breaches occur. The contract also requires Mgame to deal with technical issues and security defects to ensure quality of service. CDC is now claiming that Mgame has been unresponsive to its requests to collaborate in good faith on both these issues.

Mgame's alleged failure to provide security for Yulgang is a particular sticking point, because CDC has spearheaded the MMO security effort, founding the Online Game Alliance Against Piracy (OGAAP) along with CCP Games (EVE Online), Ons On Soft (Shine) Sonokong (Shaiya) T3 Entertainment, developers of Audition, and Wemade (Mir II) to fight the piracy of online games in China.

Judging by CDC's official statement, it appears that CDC stopped payments to Mgame, resulting in Mgame's termination of the contract. Said CDC's statement: "The management of CDC Games strongly believes that these accusations and actions are baseless and hold the potential to harm the loyal players of Yulgang, one of the top-10 most popular online games in China, as well as damage the overall online game industry in China."

“We regret that our many attempts to work with Mgame constructively and in good faith have not been successful,” said CDC Games president Xiaowei Xhen. “We have even been working directly with the Chinese government and they too, have reached out to Mgame to encourage them to work with us constructively to settle this dispute and avoid any potential harm to the Yulgang players or overall games industry in China. Although we finally had no choice but to file the lawsuit, we still hope this dispute can be settled amicably.”