According to Gamasutra, Adidas has filed a lawsuit against THQ for breach of contract, alleging that the video game publisher failed to complete and release a game for its interactive athletic training system, miCoach. The lawsuit alleges that THQ entered into a contract to create the game, which was supposed to launch in January 2012. Adidas seeks a jury trial and more than $10 million in damages.

Judging from the 2011 press release on behalf of both Adidas and THQ, the miCoach is a digital exercise tool similar to the Nike+ system. The video game, which was tentatively titled MiCoach 24/7, was developing as an interactive experience, featuring Adidas athletes like Dwight Howard, who would guide users through sport-specific personalized training programs. The miCoach system would provide users with real-time feedback on their actual in-game performance via the miCoach heart rate monitor. Through its interaction with MiCoach 24/7, the miCoach hardware was also set to allow users to synchronize their workout devices with Xbox 360 Kinect or PlayStation Move, tracking workout data gathered while away from the game.

The lawsuit seemingly cannot have come at a worse time for THQ, whose financial troubles have been well-documented over the past year. THQ even received a delisting warning from the NASDAQ stock exchange earlier in the year because the company had been trading below the $1 minimum. As a result of these financial troubles, THQ was forced to lay off around 240 employees last month, including developers who were working on MiCoach 24/7. This ultimately led to THQ notifying Adidas in December that it would be unable to finish the game.

Aside from the $10 million in damages, Adidas is also seeking an order that THQ not sell or transfer the rights to the game. While the situation appears to be a pretty straightforward case of breach of contract, one wonders what impact a $10 million damage award from an already ailing company will have on the miCoach game. This late in the development process, Adidas surely would rather see the game completed in lieu of a damage award; the fact that Adidas is seeking an order that prevents THQ from transferring the rights in the game to another publisher indicates this may be true. Continuing the game’s development with a new publisher could mean completely starting over. On the other hand, restricting THQ’s ability to transfer the rights could shelf the game indefinitely. Which is better: a late game or no game at all? By seeking the order, it appears that Adidas is willing to risk the latter. Either Adidas has a lot of faith in THQ, or they simply feel too invested to continue with another publisher.