It’s being reported that Valve Software (Half-Life series, Team Fortress 2, Left 4 Dead) has filed a suit against Activision over unpaid royalties, or rather, underpaid royalties to the tune of nearly $500 000. That’s a lot ‘o dough.

Activision, however, have threatened a countersuit against Valve if the developer attempts to secure the unpaid funds owed to them - funds Activision believes are unwarranted.

The suit dates back to 2002 when Sierra Entertainment were handling Valve’s retail titles, and the two companies came to loggerheads over a copyright infringement, which lead to a termination of their distribution agreement in 2005.

As Sierra Entertainment still owed Valve a chunk of cash in royalties, a third-party audit arbiter was appointed to determine the amount owed to Valve. This determined amount was only decided upon early last month, on April 6th, when the arbiter declared that the amount owed to Valve would be $2 391 932, including interest, in royalties.

Now, as a result of the Activision/Vivendi merger, where Sierra Entertainment were a division of Vivendi, the outstanding royalty payment became Activision’s debt, which was paid to Valve on April 7th, minus a large portion of the funds ($424 136) as Activision believed Valve had been overpaid for a previous claim. Activision then paid Valve $1 967 796, which, as mentioned, was almost $500 000 short of the amount the auditing arbiter declared to be in arrears.

Valve are now seeking to be compensated by the amount due as well as additional legal fees resulting from this new lawsuit. Activision’s threatened countersuit will follow should Valve pursue this course action – a course of action that the developer is indeed pursuing.

Looks like we’re set for some legal fireworks in the days to come.