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Fired 'Call of Duty' developers sue Activision for more than $36 million [Updated]

March 4, 2010 | 10:31 am

CDMW2 Call of Duty: Modern Warfare has led to legal warfare at Activision.

Jason West and Vince Zampella, the former heads of Call of Duty: Modern Warfare development studio Infinity Ward, who were fired on Monday, have filed a lawsuit against publisher Activision Blizzard Inc. alleging wrongful termination and breach of contract.

The complaint, filed in Los Angeles County Superior Court on Wednesday, alleges that Santa Monica-based Activision fired the the duo in order to avoid paying them royalties on military shooter Modern Warfare 2, which was released in November and has generated more than $1 billion in retail sales.

"Activision has refused to honor the terms of its agreements with Mssrs. West and Zampella and is intentionally flouting the public policy of this State that employers must pay their employees what they have rightfully earned," the complaint states. "Instead, Activision has adopted the corporate strategy of forcing Mssrs. West and Zampella to sue for their pay -- in the hopes of either getting away with not having to pay them anything or maximizing its leverage to reduce that pay."

Spokespeople for Santa Monica-based Activision did not respond to requests for comment.

According to the complaint, after Activision acquired Infinity Ward for a total of $5 million in 2003, it signed three-year employment agreements with West and Zampella, co-founders of the Encino-based studio who most recently served as president and chief executive, respectively.

In 2008, after the release of Infinity Ward's Call of Duty: Modern Warfare, the fourth game in the series and a huge hit that has sold more than 13 million units, West and Zampella signed a contract extension through 2011. The complaint says that the extension includes additional royalties and other payments, as well as the right to operate Infinity Ward independently and to have creative control over any Modern Warfare sequels or other Call of Duty games set after the Vietnam War. (Update, 11:20 a.m.: A previous version of this post incorrectly said the contract extension was signed in 2007.)

Previous Call of Duty games without the "Modern Warfare" subtitle have been set in World War II. A sequel set for release this November being released by another Activision-owned studio, Treyarch, is said by people close to the company to be set in the Vietnam War.

The complaint states that Activision launched an investigation of West and Zampella on Feb. 3 for alleged "breaches of contract" and "violations of Activision policies." The two were then fired on Monday. The complaint states that the "notice of discharge" contained "charges that were disproved in the investigation; included events that West and Zampella were never even asked about during the investigation; identified conduct that other Activision executives engaged in with impunity; and cited 'insubordination' and alleged conduct from over a year ago."

In its annual report filed Monday, Activision said it was "concluding an internal human resources inquiry into breaches of contract and insubordination by two senior employees at Infinity Ward."

The lawsuit asks the court to rule that West and Zampella have creative control over all Modern Warfare games and that Activision may not release any Call of Duty games set after the Vietnam War without their approval and that the publisher owes them unpaid royalties and damages in excess of $36 million.

[Update, 11:57 a.m. Activision has issued the following statement in response to the lawsuit:

Activision is disappointed that Mr. Zampella and Mr. West have chosen to file a lawsuit, and believes their claims are meritless. Over eight years, Activision shareholders provided these executives with the capital they needed to start Infinity Ward, as well as the financial support, resources and creative independence that helped them flourish and achieve enormous professional success and personal wealth. 

In return, Activision legitimately expected them to honor their obligations to Activision, just like any other executives who hold  positions of trust in the company.  While the company showed enormous patience, it firmly believes that its decision was justified based on their course of conduct and actions.  Activision remains committed to the Call of Duty franchise, which it owns, and will continue to produce exciting and innovative games for its millions of fans.]

--Ben Fritz

Photo: A scene from Call of Duty: Modern Warfare 2. Credit: Activision.

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