Gate Five claims that the `Listen` star went back on her word for a $20 million deal for the proposed game named Starpower: Beyoncé.
Legal representatives for the 30-year-old singer insisted that she had the choice to back out of the agreement after she discovered that the company had not come up with the necessary budget for what was needed to create the product named after her.
However Gate Five has replied that she unfairly pulled out only three days before she was supposed to officially sign a contract with them back in December 2010.
They maintain that her actions resulted in them losing millions of dollars and having to fire 70 employees.
The New York Post reports that Justice Charles Ramos has allowed the lawsuit to go to trial, as Beyoncé should have given the company notice before quitting the deal.
Beyoncé - who is married to rapper Jay-Z - gave birth to their first child, a girl named Blue Ivy in January and has declined any comment on the matter.