I'm in a kind of similar situation in that Msft owes me aprox $7k in royalties but they lost track of it internally. I've been pinging them every 6 months about this for the last 4 years, hoping to avoid litigation.
in the usa, you can't expect a lawyer to take a case without paying their fees up front. So $5000+ for any case.
Assuming you win, you are still looking at years before you might actually get paid (if ever).
That, plus a huge time and cognitive investment, means i'ts not surprising he took this route.
small claims court in my state (WA) is limited to aprox $5000.
This awkward area between $6k to $15k seems to be a sweet spot for abusive business practices (intentional or otherwise) because of the big time and financial commitment it takes to pursue.
EDIT: Also I should add that it's not guaranteed that legal fees can be reclaimed from successful litigation. This is probably the main reason I keep putting it off (and keep pinging them about it every 6 months, paper trail seems important)
This story sounds a little fishy to me. If they just "lost track of it" you don't need to sue. You need to dig out your executed contract with MS, and your set of unpaid invoices and start making phone calls. Ultimately if that fails, pay a lawyer a few hundred to send a letter to the address in the "Notices" section of the contract, demanding payment. That'll get the attention of someone who will get you paid.
Otoh if there is an actual dispute (MS disagrees that they owe you money) then you need to walk away. Nobody is going to sue MS for $7k.
it's royaltees from xblig (xna on xbox360). they admitted to not paying me in email, but don't know where the money went.
I actually emailed msft legal about it aprox a year ago, which got traction for a couple months before their activity died off again.
so yes, as you say the general plan I'll probably go with is to retain a lawyer to send threatening emails. that'll cost in the area of $350. Just tried my best to resolve this without that drama.
in the usa, you can't expect a lawyer to take a case without paying their fees up front. So $5000+ for any case.
Assuming you win, you are still looking at years before you might actually get paid (if ever).
That, plus a huge time and cognitive investment, means i'ts not surprising he took this route.