Silicon Knights was a Canadian video game developer. It was started in 1992 by Denis Dyack and Michael Mays, and its main office was in St. Catharines, Ontario. The company first made games for computers like the Atari ST and IBM PC models. After 1996, it began creating games for consoles.
In 2012, Dyack left Silicon Knights to start a new game studio called Precursor Games. This happened after Silicon Knights lost a court case against Epic Games over the Unreal Engine 3 game engine. Epic Games won the case and filed a separate lawsuit, winning $4.45 million because of violations of copyright, stealing trade secrets, and breaking the contract. After this, Silicon Knights went bankrupt on May 16, 2014.
Games
Silicon Knights' first games were mixes of real-time strategy and action games for computers. Their last PC game, Blood Omen: Legacy of Kain, came out in 1996. After that, the company focused on console games. In 2000, Silicon Knights partnered with Nintendo to make games only for Nintendo's consoles. During this time, they created Eternal Darkness: Sanity's Requiem. Silicon Knights and Nintendo collaborated with Konami to develop Metal Gear Solid: The Twin Snakes. In 2004, the company ended its exclusive deal with Nintendo. In 2005, the company partnered with Microsoft Game Studios to develop Too Human. However, Nintendo still had ownership shares in the company. In 2008, the company released Too Human, which Microsoft published for the Xbox 360. The final game developed by the company, X-Men: Destiny, was released in September 2011 for several console systems.
Canceled games included Silent Hill: The Box (later renamed The Box and The Ritualyst), Too Human 2 (Too Human: Rise of the Giants), Too Human 3, Eternal Darkness 2, and the less well-known projects Siren in the Maelstrom, The Sandman, and King's Quest.
Founding of Eight
Silicon Knights worked with schools and universities to help create Eight: The Hamilton Institute for Interactive Digital Media. This partnership included Silicon Knights, McMaster University, the Art Gallery of Hamilton (AGH), and Mohawk College. The goal was to develop a model for teaching and research in interactive digital media and to support research in the area of interactive entertainment.
Lawsuit with Epic Games
On July 19, 2007, Silicon Knights filed a lawsuit against Epic Games, claiming the company failed to provide a working version of the Unreal Engine 3 game engine. This caused Silicon Knights, a Canadian game developer, to suffer significant financial losses. The lawsuit stated that Epic Games was trying to harm Unreal Engine 3 licensees by not meeting deadlines or providing proper support. Epic Games had promised in its licensing agreement that a working version of the engine would be available within six months after the release of Xbox 360 developer kits. Silicon Knights claimed Epic missed this deadline and later released an incomplete version with poor documentation. The studio also alleged that Epic withheld important improvements to the engine, claiming they were "game specific," and used licensing fees to develop its own games instead of improving the engine.
In August 2007, Epic Games responded by filing a counter-suit against Silicon Knights. Epic claimed the studio knew when it signed the licensing agreement that some features of Unreal Engine 3 were still being developed and would continue to be added as Epic completed work on Gears of War. Epic stated that Silicon Knights had used Epic’s copyrighted code without permission and violated its intellectual property rights by incorporating Unreal Engine 3 code into its own game engine. The counter-suit also alleged that Silicon Knights broke the contract by using a modified version of the engine in an internal game and a second game with Sega, for which Epic did not receive a license fee.
On May 30, 2012, a court ruled in favor of Epic Games in its lawsuit against Silicon Knights. Epic won its counter-suit for $4.45 million due to copyright infringement, misuse of trade secrets, and breaking the contract. The court later doubled the award because of additional costs and interest. The judge, James C. Dever III, stated that Silicon Knights had copied thousands of lines of Epic’s copyrighted code and tried to hide this by removing copyright notices and disguising the code as its own. The evidence against Silicon Knights was described as "overwhelming," as it included both functional code and internal comments left by Epic’s programmers.
As a result, the court ordered Silicon Knights to delete all game code based on Unreal Engine 3 and all information from restricted areas of Epic’s documentation website. The studio was also required to allow Epic access to its servers and devices to ensure compliance. Additionally, Silicon Knights was instructed to recall and destroy unsold copies of games built with Unreal Engine 3 code, including Too Human, X-Men Destiny, The Sandman, The Box / Ritualyst, and Siren in the Maelstrom (the last three were never officially announced or released).
In 2019, David Dyack, a leader at Silicon Knights, told IGN he regretted filing the lawsuit, not only because of the financial loss but also because he underestimated how long the legal process would take. Dyack said he would have reconsidered the lawsuit if he had known the time and effort required to resolve the case.
Government funding
In February 2008, Silicon Knights received $500,000 from the Ontario Media Development Corporation (OMDC) through its Video Game Prototype Initiative. The company used this money to develop a prototype for a game that would allow players to control characters from a side view and involve mystery and suspense.
In July 2011, Silicon Knights was given $2.5 million over five years by provincial funding sources. This money was intended to help the company improve its technology, create new products, and become a self-publishing company. It was expected to allow the company to hire 80 new employees, keep 97 existing jobs, and become self-sustaining. However, by November 2011, the company had not yet received any of this funding.
In April 2010, it was announced that Silicon Knights would receive about $4 million from the Canadian government's Community Adjustment Fund. The loan was meant to support the hiring of 65 new staff members to work on a new game for multiple platforms. The game was estimated to take two to five years to complete.
Filing for bankruptcy
On May 16, 2014, after losing a court case, Silicon Knights filed for bankruptcy. The Office of the Superintendent of Bankruptcy issued a Certificate of Appointment, and Collins Barrow Toronto Limited was named Trustee in Bankruptcy.