updated 12/17/2009 6:50:25 PM ET 2009-12-17T23:50:25

Toy maker Hasbro Inc. has sued video game company Atari S.A. over its license to make video games based on Hasbro's Dungeons & Dragons role-playing games.

Late Wednesday, Hasbro said Atari, which has held digital game rights for Dungeons & Dragons since 2000, may have violated its licensing agreement when it sold its European business distribution arm to Japanese game maker Namco Bandi in July. Hasbro is also alleging Atari misled Hasbro about the deal.

"We have been working for several months now to reach resolution with Atari, and they have left us with no other choice than to pursue legal action," said Greg Leeds, Wizards of the Coast president. Wizards of the coast is Hasbro's subsidiary that owns Dungeons & Dragons.

Atari on Thursday said it had not violated the agreement or misled Hasbro.

"Hasbro has resorted to these meritless allegations, in an apparent attempt to unfairly take back rights granted to Atari," Atari said in the statement. "Atari has sought to resolve the matter without cooperation from Hasbro. We regret that our longtime partner has decided to pursue this action."

Hasbro is seeking damages for economic losses and wants to end the licensing agreement, in the complaint filed in the District Court of Rhode Island.

Atari said it will respond appropriately through its legal counsel in court. Atari publishes "Dungeons & Dragons Online: Eberron," an online role playing game, and has also published "Neverwinter Nights 2" and "Dungeons & Dragons: Tactics."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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