Genius delayed production because it had trouble getting approvals from Microsoft and Sony to publish on the 360 and PS3 and in fact still doesn't have approval from Sony.
In early April, two executives from Numark (manufacturer of the DJ controller, which is now part of a joint venture that owns the game with Genius) allegedly went to dinner with a "Scratch" producer from 7 and tried to recruit him and other co-workers to finish the game for Numark, informing them it would be taken away from 7 shortly.
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7 Studios Strikes Back Over Scratch DJ Lawsuit
by Jeff Gerstmann on
Scratch: The Ultimate DJ developer files a countersuit against its publisher, plot thickens.
In case you're interested in following the continually tangling web of the legal action between Genius Products, Numark, and 7 Studios over the development of the game Scratch: The Ultimate DJ, Ben Fritz has a great breakdown of the countersuit that 7 Studios has filed against Genius, one of the two companies that partnered together to publish Scratch.
Much like the initial suit that Genius filed against 7, the countersuit sounds pretty ugly. Here are just a couple of the allegations:
I'm not sure if things are still this way, but I seem to remember that promoting your game as coming to specific consoles before receiving concept approval from said console makers is a good way to make enemies right off the bat. Of course, adding to all this, 7 Studios was acquired by Activision somewhere along the way, and Activision is working on a product that would potentially compete with Scratch, DJ Hero. But at this rate, I'm starting to feel like only one of these games is going to ever make it to store shelves.