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

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.

 
Comments () | Archives (25)

BIG CHEERS TO JASON AND VINCE! I hope they win this lawsuit.

Man that is horrible. I'd like to see Activision's side of the story. If you all would like to see Infinity Ward's 16 page filing complaint go here:

http://kotaku.com/5485703/ousted-infinity-ward-founders-lawsuit-against-activision-the-court-documents/

If it is true...that is some unbelievable wrong doings. That's all I'm going say.

The lawsuit, if accurate, is shocking. It indicates that Activision essentially forced them out without paying them any of their bonus that was due.
Activision had 1 BILLION dollars in sales for that game alone, and they can't pay the people who made it?
Good luck Jason and Vince! You deserve every dime AND MORE!

I don't see why Activision are 'disappointed' with the IW heads for filing a lawsuit. Afterall both IW heads had a contract stating that they were entitled to money rewards. As far as I can see, there is no substantial evidence that IW ever broke the contract between them and Activision. I believe Activision is just being greedy and wouldn't want to pay the IW heads the reward the truly deserve. Everyone knows that Kotick is a greedy businessman, and I can't praise West and Zampella for challenging and taking to court Activision.

I wonder who is the attorney representing the employees>

Something is rotten in Denmark. Given the amount of revenue that the Modern Warfare games have raked in for Activision, the only "insubordination" that would justify these employees' termination would be the kind that somehow risks making Activision criminally liable in some way, shape, or form.

So unless there was drug trafficking, a prositution ring, terrorism, or some sort of gross racketeering being run out of the Infinity Ward offices, Activision would have just looked the other way to maintain its profit stream.

I think the notion that Activision is simply removing a couple of thorns from its side which might otherwise have prevented them from running the CoD franchise into the ground (as seems both their intent and their prior course of business with other franchises i.e. Guitar Hero) is the likely explanation.

The lawyer for the former IW employees seem to be Kristopher Rossfeld, Robert Schwartz, Victor Jih, @ O'Melveny & Myers LLP. According to the public complaint filed in LA Superior Court.

Rock on guys

I hope you take that POS Bobby Kotick to the cleaners, win back the rights to YOUR intellectual property, and cost activision billions in future revenue.

They deserve nothing less!

This is worse than Ghost and Roach dying.

Well sorry about the your situation fellas. I wish you the best of luck with that.

BUT

IW and Activision should both get sued for not having dedicated servers for PC based gaming... Geniuses...

Infinity Ward sucks. That is all.

Big publishers as an industry have a long history of cheating people.

Hypothetically, would it ever be in the stockholder's best interests to fire the guys who made them $1B or is upper management guilty of breech of fiduciary responsibility for personal reasons?

Once again the greedy bastards are at work. I really want to hear how "bad" Zampella's and West's conduct was. Activision is just another corporation which is not run with pure values of creativity and originality, but with simplistic business strategies.

Sure talented people need the financial backing to get things done, but if you didn't have that talent to start with the investors would never have made anything.

So suck it up corporate boys, I truly hope your days of "stream lining", "lear jets" and whatever other crap that you value are finally over. No one cares about you anymore, everyone just wants you to disappear, and rather with a big bang.

This is par for the course in dealing with passive aggressive LA businesses.

When developers are in a contract with a publisher they cannot negotiate with other publishers. Hence why these two guys were terminated. Just sayin', the fact will come out. This wasn't about money, it was about loyalty and creative differences. ATVI gave IW free reign on a new IP, and IW knew ATVI was going to take MW3 to another dev house. They didn't like it, spoke with *ehem* someone else and boom -- problem solved.

Keep in mind, ATVI OWNS IW. These two guys might have been the field generals for MW franchise, pun intended, but they were not the owners of the IP.

it's a complaint. it's one side of an argument. can't even form a valid opinion until both sides have made a case and at least discovery has started.

there's interesting stuff in the complaint. a request that activision not make any more call of duty games set after vietnam. At any time period ever. Seems crazy and unenforceable. There's also a claim that Activision doesn't own the franchises. Seems Activision thinks they do own it. So that will be interesting. Another interesting thing is they claim they were asked to inspect their personal computers, phones and communication devices. If those were bought for by Activision or Infinity Ward for business use then Activision has a right to ask for them and a refusal by the employees would likely be enough insubordination to justify Activisions termination of them. On the Employee side there's terms of the MOA will have a lot off effect on whether they have an enforecable contract and rights under which they have a case.

That's called revenge but $36 million for a job loss is rather awkward. But if the fired fellow is right or being victimized then he deserves the amount.

Activision your right with the contracts you owe james and vince not one cent due to their insubordination acts. keep it up and focus on the future and not now like cod7 cod 8 codp and many more.

Activision Has substantial rights to all funds and amounts made from each call of duty game and sequal. ignoring the fact who made the game IW or Treyarch.
Activision Gave IW financial support as well as starting them on an edge. then they get in a lawsuit with the ungrateful fools we call IW...

Activision is the good guy in this trouble-some situation. acoure everyone goes with their beloved IW for mw2. trust me activision you dont owe those Ungrateful Fools we call IW one cent! they made their choice of insubordination and for that they get fired. yeah we might lose a dynamic title of the call of duty "modern warfare" sequals but Treyarch is already putting final Touches on Vietnam and it looks to be a magnificent title. want my opinion Activision. Jason and vince are fired you should shut down modern warfare 2 servers and end IWs best Title. Thats life..

Well, it's been long enough to hear a bit more about both sides of the story. And while I can't really say who's at fault here, I feel a few interesting points might be enlightening.

1. Apparently, rumor has it Activision is withholding bonuses due to the rest of the Infinity Ward team for MW2. Speculation says that the reason for this is to keep IW employees from jumping ship. Activision has no comment.

2. Activision is no stranger to rough tactics with regards to business interests. Case in point: the suit against Tim Schaffer and Double Fine back in June of last year to prevent the release of Brutal Legend.

Now, I'm not necessarily saying that Activision is the bad guy here. But from their reluctance to publish original IPs in favor of sequels to their fan-reviled CEO, Bobby Kotick, they certainly seem to act like the bad guys, don't they?

So what should Activision do? Well, in regards to Mr. West and Mr. Zampella, who knows. But with regards to the rest of the IW team? Pay what you owe. They worked hard to create a great game, and the fruits of their labor are richly deserved. Denying them this just makes them look more and more like what a majority of game fans think they are: greedy corporate sharks willing to nickle-and-dime their own people.

great if IW isn't working on the game and its not going to be a modern game there games arent going to be that good anymore. I hope Infinity Ward gets back on the job and makes a better call of duty then activision could make themselves.

I cannot believe that Activision is stooping that low. Zampella and West earned Activision a truckload of money, and they repay them by firing them to avoid paying them for their hard work? All I can say is I hope Activision gets smashed into the ground which is what they deserve. I hope Zampella and West win the case. They deserve every cent of it,

I heard tht MW3 has already been made idk if its true or not but if it has would it come out .

Just for the record, CoD Black Ops is HORRIBLE. Completely awful game, especially compared to all the others in the series. Definite sign that Activision / Treyarch have no friggen clue what they're doing. Almost PS1 level graphics, garbage frame rate lag (on a PS3!!!), useless perks, etc., etc. I hope Infinity Ward remakes their series and titles it something else, staying close to it's roots. Thanks Activision / Treyarch for ruining a truly epic game.


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