Activision Publishing strongly denies the allegations made by Genius Products and Numark Industries and believes that the claims are disingenuous and lack any merit. Yesterday, the L.A. Superior Court found that there was no evidence of any wrongdoing by Activision and refused to grant any restraining order against Activision.

These allegations are nothing more than an attempt by Genius to place blame for the game's delay, as well as to divert attention from the cash flow, liquidity and revenue challenges Genius detailed in its March 30, 2009, SEC filing. By their own admission in October 2008, the game had fallen behind in production, which was well before Activision had any involvement with Genius, Numark or California 7 Studios regarding the game.

The lawsuit will have no impact on Activision's upcoming DJ Hero(R) game, a turntable-based music game that the company has been independently developing.

Activision purchased 7 Studios on April 6, 2009 to bolster its development capabilities. 7 Studios had continued to develop Scratch: The Ultimate DJ and Activision did not interfere with or delay their efforts to complete the game. In fact, Activision provided the fledgling developer with much needed financing during these difficult economic times.