The superstar was sued in Manhattan Supreme Court by a video game company Gate Five, which teamed up with her for a dance game called "Starpower: Beyonce," the New York Post reported.
The game was due out this November, the suit says, but went belly-up when the "Single Ladies" singer abruptly asked for more money last December.
The suit calls it "a bad faith breach of contract so callous that, on what appeared to be a whim, she destroyed Gate Five's business, and drove 70 people into unemployment, the week before Christmas."
A Gate Five spokesman told the Post, "It was a very shocking and disappointing turn of events that no one saw coming, and now we're all trying to pick up the pieces."
The suit claims that Beyonce had "already negotiated lavish compensation" for the game, made an "extortionate demand for entirely new compensation" at a "crucial moment in the project's development," causing the main financier to back out.
Reps for Beyonce did not get back to the Post.