Silicon Knights lost its Epic Games lawsuit — a judge ordered it to destroy its own games

Silicon Knights was a Canadian video game developer founded in 1992 by Denis Dyack in St. Catharines, Ontario. It built a reputation with Eternal Darkness: Sanity's Requiem (2002) for Nintendo and Metal Gear Solid: The Twin Snakes (2004) for Konami. After its Nintendo exclusivity deal ended, the company partnered with Microsoft Game Studios to develop Too Human (2008) for Xbox 360.

Too Human was in development for over a decade and was released to mediocre reviews and weak sales. The game's failure left Silicon Knights without a sustainable franchise. In 2007, the company sued Epic Games, claiming Epic failed to provide a working Unreal Engine 3 license and caused "considerable losses." Epic counter-sued for copyright infringement and misappropriation of trade secrets.

In May 2012, Epic Games won the lawsuit and was awarded $4.45 million, later doubled with interest and legal costs to over $9 million. The court found that Silicon Knights had "deliberately and repeatedly copied thousands of lines of Epic Games' copyrighted code." The judge ordered Silicon Knights to destroy all unsold copies of Too Human and X-Men: Destiny — its own products.

Denis Dyack left in 2012 to form Precursor Games. Staff fell from 97 to fewer than 5. On May 16, 2014, Silicon Knights filed for bankruptcy. The company that created one of the GameCube's most acclaimed titles was destroyed by a single failed lawsuit.