We've been covering the ongoing legal battle between CDC and MGame, in which CDC has filed a lawsuit against Mgame in both Hong Kong and Korea for breach of contract. The conflict revolves around the game Yulgang (Scions of Fate in the U.S.), a Korean MMO the two companies have been cooperating to publish in China, and CDC alleges MGame has failed to meet promised tech support obligations, and that it hasn't supported CDC's anti-piracy efforts adequately.

However, MGame is claiming that CDC was the first one to breach. Though CDC said in its official statement that it has paid $15 million in royalties and license fees since 2005, MGame claims that CDC has not fully paid the license fee to renew Yulgang in China.

"The reason MGame terminated the contract was the nonpayment for the extension contract of Yulgang in China," MGame's Noah Chang told Worlds in Motion. "They were supposed to pay the initial fee for it this June, but they didn't make the full payment. They actually made a partial payment by June or July; since then, they didn't make any further payment."

Says MGame CEO Yi Hyoung Kwon, "A contract is a document that states the rights and obligations of both parties. After breaching the conditions of the contract initially agreed upon, there will only be distrust between both parties. Even though, we requested CDC Games to make payments for the license fee several times, promises weren’t kept and we had to announce the termination of the contract.”

He continued, "We are trying our best to devise a scheme to minimize the damages to Chinese players and we will provide constant and stable services for Yulgang in China with a new partner sometime soon."