Infinity Ward vs. Activision: The whole story

This has been a tumultuous week in the videogame industry. Infinity Ward, the studio behind one of the most profitable videogame franchises of all time is in a bitter legal dispute with its parent company Activision. More specifically, the lawsuit involves Infinity Ward’s former chief technology officer Jason West and former chief creative officer Vince Zampella. The pair were fired on March 1, 2010 for “breach of contract” and “insubordination.” West and Zampella feel they were wrongfully terminated and are seeking compensation for royalties owed to them due to the financial success Modern Warfare 2 proved to be.

This set of events were in motion long before it came to a head this month. Gamertell has read over the lawsuit documents filed on behalf of West and Zampella and it contains some rather chilling claims. Based on that report, we’ve put together the chain of events that led Infinity Ward to where it is today. Keep in mind, this information was provided by the plaintiffs, West and Zampella. Should Activision provide a rebuttal, we will report on that as well.

The Claim

West and Zampella claim that Activision fired them weeks before they were to receive royalties from the success of Modern Warfare 2. They believe Activision fired them so they wouldn’t have to pay royalties, or at most, reduce the amount owed. West and Zampella also want to vindicate the agreement they had with Activision that allowed Infinity Ward to control any Modern Warfare game that takes place from the post Vietnam era, to the distant future.

The Timeline

In 2002, Infinity Ward was formed. Activision came into the picture after the success of Medal of Honor and asked Infinity Ward to create a game based on World War II. That game became Call of Duty and was also a big success for the company. That same year, Activision purchased Infinity Ward for $5 million. After the acquisition West and Zampella were given the titles of CTO and CCO respectively. Though owned by Activision, Infinity Ward was allowed to operate independently to focus on creating the same blockbuster games it had become known for.

In 2003 West and Zampella signed a three year employee agreement deal that was set to expire in November 2006. Activision extended the contract to 2008. This led to the creation of Call of Duty 4: Modern Warfare in 2007 and prompted Activision to ask West and Zampella to extend their contracts for another two years. As Modern Warfare 2 was being developed, West and Zampella felt Activision was pushing their team too hard finish the game by a set date.They also became increasingly concerned that Activision’s resistance to Infinity Ward creating a new intellectual property were affecting the teams creativity. Despite their feelings, West and Zampella signed a Memorandum of Understanding that kept Infinity Ward a part of Activision and extended their contracts to October 2011.

Activision offered incentives to sweeten the deal. It gave Infinity Ward the right to control any CoD game in the modern or distant future era, complete control of the studio and additional compensation for the Infinity Ward employees.

Following the $1 billion success of Modern Warfare 2, Activision allegedly launched an investigation with the intention of firing West and Zampella on February 3, 2010 so it wouldn’t have to pay royalties for MW2. The royalties were meant to be paid out on March 31, 2010.

Activision’s lawyers did not specifically tell West or Zampella what they were being accused of. It is believed that the investigation was a ploy to create an excuse to fire West and Zampella if they failed to fully cooperate with the investigation – hence the “insubordination” claim. West and Zampella were allegedly lured into a phony meeting with Activision where they became victims of a six hour interrogation. On March 1, 2010 Activision gave West and Zampella six hours to respond to its claims. Afterwards the two were fired.

The Response

Activision has responded to the lawsuit by issuing the following statement:

“Activision is disappointed that Mr. Zampella and Mr. West have chosen to file a lawsuit, and believes their claims are meritless,” the company said. “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 executive who holds a position of trust in the company,” the statement reads. “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.”

Read [Gamertell]