Silicon Knights has not been having a good run of late. First, there was the unceremonious dumping of X-Men: Destiny at retail by publisher Activision, who it turns out had a number of good reasons to pretend that game never happened. Then the Canadian developer lost its lawsuit against engine-maker Epic Games, which it had sued over supposed breaches of contract in licensing the company's Unreal Engine 3. Not only did they lose that suit, but they also lost the countersuit filed by Epic, which awarded them $4.45 million in damages, as well as Epic's legal costs. Now, if you can believe it, things just got even lousier.
Silicon Knights has been ordered by a North Carolina district judge to destroy all unsold materials featuring any aspect of Unreal Engine 3. This includes unsold copies of both X-Men: Destiny and Too Human, the Xbox 360 RPG that started this lawsuit mess to begin with. This also includes unfinished projects supposedly in development at one time or another at Silicon Knights, which are listed in the order as The Box/Ritualyst (a survival horror game canceled by Sega back in 2008), Siren in the Maelstrom (a game rumored to be in current development at the studio), and The Sandman (unknown as of press time).
This has to be a particularly bitter pill to swallow for company head Denis Dyack, who famously filed the suit due to issues he believed were inherent to the Unreal Engine. Dyack fumed about how the studio had to rework much of the Unreal Engine to make it work for Too Human, essentially building a new engine around various aspects of Unreal 3. Now, because the engine features holdover elements from Unreal 3, he's being ordered to recall unsold products, cancel (or, at least, put on hold) current projects, and pay even more money in legal costs and fines. There is not a Price Is Right losing horn loud enough to handle this situation.
On the plus side, that copy of X-Men: Destiny you regretted buying just became something of a collector's item. Maybe. Okay, probably not. I'm trying to find a silver lining here.