Red Mile to Acquire Full Rights to Heroes Over Europe

Atari will release its half of the publishing rights for Heroes Over Europe to Red Mile Entertainment upon initial payment as part of a buyout agreement between the companies, according to a recent Red Mile SEC filing.

Red Mile will pay Atari an undisclosed payment when the agreement is executed as well as two royalty payments based on Heroes’ sales. As part of the agreement, Red Mile and Atari agreed to a mutual release of claims such as Red Mile breached the co-publishing agreement. The filing did not disclose when Red Mile expects the agreement to execute.

It is not yet known whether Red Mile will (or can) publish Heroes itself, find another co-publisher or sell its rights entirely because just two weeks ago it said it was cash strapped and would likely close its operations by the end of this month if it cannot get more funding. Selling the Heroes rights would help in the funding department, but it’s unlikely such a move would be enough to sustain Red Mile.

A more likely scenario is finding a new co-publisher. Red Mile’s previous Heroes title, Heroes of the Pacific, was co-published with Ubisoft, which just recently stepped in and saved the fate of another title, Midway Games’ Wheelman. Getting Heroes Over Europe out the door may enable Red Mile to keep development going on its largest franchise, Sin City, due in 2011 if Red Mile survives.

Before Atari claimed Red Mile breached the co-publishing agreement, Transmission Games was working on Heroes and the game was due to ship this spring for PC, PlayStation 3 and Xbox 360. At the time, Transmission claimed Red Mile missed a milestone payment of $281,000.