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West, Zampella File Lawsuit Against Activision Over Sacking
West, Zampella File Lawsuit Against Activision Over Sacking
March 4, 2010 | By Simon Carless

March 4, 2010 | By Simon Carless
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    49 comments
More: Console/PC



Infinity Ward co-founders Jason West and Vince Zampella have filed a lawsuit against Activision citing "breach of contract", following their abrupt removal as heads of the Call Of Duty: Modern Warfare developers.

Law firm O'Melveny & Myers LLP released an official announcement confirming a Los Angeles County Superior Court lawsuit by the duo against Activision Publishing, Inc., claiming that "Activision terminated their employment weeks before they were to be paid substantial royalty payments as part of their existing contracts for Modern Warfare 2."

The suit includes claims for breach of contract, breach of the implied covenant of good faith and fair dealing, wrong termination in violation of public policy, and declaratory relief, and was filed "to vindicate the rights of West and Zampella to be paid the compensation they have earned, as well as the contractual rights Activision granted to West and Zampella to control Modern Warfare-branded games."

The duo's comments confirm Gamasutra-reported claims that only Infinity Ward may make games in the Modern Warfare series, and that conflict over this appears to be one of the reasons behind the duo's removal.

West and Zampella developed two of the most successful video games in history – Call of Duty and Modern Warfare – at the Infinity Ward studio, a company they co-founded in 2001. After its acquisition by Activision in November 2003, West and Zampella served as president/game director and CEO, respectively.

"Activision has refused to honor the terms of its agreements and is intentionally flouting the fundamental public policy of this State (California) that employers must pay their employees what they have rightfully earned," said their attorney Robert Schwartz.

"Instead of thanking, lauding, or just plain paying Jason and Vince for giving Activision the most successful entertainment product ever offered to the public, last month Activision hired lawyers to conduct a pretextual 'investigation' into unstated and unsubstantiated charges of 'insubordination' and 'breach of fiduciary duty,' which then became the grounds for their termination on Monday, March 1st."

"We were shocked by Activision's decision to terminate our contract," said West. "We poured our heart and soul into that company, building not only a world class development studio, but assembling a team we've been proud to work with for nearly a decade. We think the work we've done speaks for itself."

Zampella added, "After all we have given to Activision, we shouldn't have to sue to get paid."

For Activision's part, the company made an SEC filing on March 1st, just before the change, claiming: "The Company is concluding an internal human resources inquiry into breaches of contract and insubordination by two senior employees at Infinity Ward... This matter is expected to involve the departure of key personnel and litigation." The firm has not yet commented on this latest development.


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Comments


Jon Manning
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It's going to be interesting to see what happens with regards to the rest of the talented people at Infinity Ward. I wonder how many will leave with Jason and Vince?

Daniel Martinez
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Yikes. Way to give credit where credit is due Activision. I don't even play Modern Warfare or COD and yet I know the extent of success those games have had. I'm guessing "insubordination" equates to not letting yourself get screwed over by Activision in this case. As an end-user I'd be concerned about the MW and COD franchise now.

Tim Carter
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This is proof that you are a fool to build the brand of a studio when you should be building your brand as individual creators.



You can be forced out of a studio - as this example shows. No matter how powerful you think you are.



But you cannot be forced out of your own name as a creator.

Tim Carter
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This is also an example of how the game industry controls its talent instead of fostering it.

Gunstar Hero
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There goes the story of " The Goose that Laid the Golden Eggs".



Next story will be "The Golden Cow that was Milked to Death".



Greed.

Chris Sykora
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Interesting this is all happening around the release of Bad Company 2. Hmmmm...

Adam Piotuch
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Well Activision, thanks for showing us that you are the greediest game company ever. You know when James Cameron made Titanic, he waived his Directors fee to finish the movie. Upon the movie's success, Fox still paid him, a whopping $70 million. And guess what? He stuck with fox to make Avatar (even more hundreds of billions of dollars). You screw with your employees, they sue back, you lose money. You reward your employees, they stick with you, and make you even more money. It's that simple. Boycotting Activision now.

gus one
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I am a shareholder in Activision and this news has not even touched the share price. The brand will always be greater than any 2 individuals and a lawsuit. Litigation is normal business in the U.S.

Ian Uniacke
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@Gus: lets see if it doesn't affect the share prices in 2 years time when activision still don't have a modern warfare sequel due to legal wrangling.



I have a strong feeling that what happened was Activision realised that they need Modern Warfare to keep the cogs turning. Recently I read an article that upper management at activision are concerned that all their eggs are in 3 baskets (GH, Mw, and WoW). Since GH is in decline Activision would be desperate to make up the deficit with Mw. I suspect they are trying to strong arm infinity ward into getting a sequel out sooner than originally anticipated.



Also I'm wondering how do you charge a CEO with insubordination? (Maybe I don't understand what that means but isn't CEO the big boss of the company how can he be insubordinate?)

Bernard Yee
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While we're all speculating, here are my $.02x2 based on zero real data:

1. Founders were unhappy with the pressure being put on them so they were looking to spin out into a new studio, and Activision found out.

2. Founders pushed back on pressure from Activision, and Kotick didn't like it one bit and they couldnt resolve their differences.



This excludes any theory that the founders did something really HR-enforceable bad, but that'd have to be really bad for TWO heads of one of their star studios to get canned, so I'll discount that theory, and ATVI's claims of breach of K and insubordination seem to verify that.



I would hope that if there was a diff, ATVI would have tried very hard to buy em out quickly and make this go away quietly. This sort of thing (like Viacom asking Harmonix execs to give back part of their purchase price) make them look bad in public... really bad, regardless of what the 'facts' are.

Christiaan Moleman
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@Gus: Teams are not interchangeable. Without developers, there is no brand... Kotick would do well to remember that.

Alan Wilson
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Careful on the share price issue - that is always down to how the market views this stuff. Ward/Zampella could do a LOT of damage - but it may also be that their deal includes wads of Activision shares, so they may not want to.



As for "insubordination" - they were the senior execs in a wholly-owned subsidiary. Under those circumstances they are completely at the mercy of the Activision board (or whoever they actually reported in to).



And to Tim: you can only be forced out of a studio that you don't own. If they had kept control of the company and the IP, then no-one could force them to do anything. But they decided to sell the IP off and their own lives with it!

Ary Monteiro Jr
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A scene i'd like to see: Activision loses the Modern Warfare brand, MW3 ends up being made elsewhere, and all that is left to them is Treyarch's and third person CODs.

Terry Matthes
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Now that the IP's third modern installment will be a guaranteed million + seller there is no reason to leave it with any one particular studio, especially if you can give it to one of your studios that's cheaper to operate.

gus one
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Are IW employees really going to jump ship? There are 1000's of quality individuals who would jump at the chance to take their place. The market is still recovering from a trough. Maybe jumping to a new West and Zampella start up is not the most job secure thing to do. No title would be finished until late 2011 or 2012 at the earliest. Not to mention in the meantime there is a rather distrating litigation for them. ATVI will not care they'll just send the legal department off to deal with it. Even when all is settled after this experience they'll never sell their new studio so the upside will be limited in incentives. These days 1 title is not going to get you very far. You need a portfolio of quality franchises you can leverage off. The credit markets are still shut so raising finance will be difficult. What are they going to sell to the bank manager... CoD Future Warfare. They are one trick ponies. They'll retire to Barbados probably with a ATVI black eye.

Thomas Lo
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@TMM Spoken like a true idiot executive who is only going to be with the company for 2 years and wants to cash out quick.



@Gus Simpsons, you cleary know nothing about the credit markets. Financing is still out there, only the financing is no longer for insolvent people, banks actually care about actual viability now after skirting their fiduciary duties for almost 10 years. Susie Homemaker can no longer get a 300k loan to buy a house. The IW employees would be a very safe and bankable project given the potential profits. Most good games only sell 500k-1mil copies and are profitable given development costs.



The conglomeration of the game industry has served to destroy long-term value in the industry. We are seeing the same bs that happened in other bad mergers: (AOL-Time Warner, Merryl Lynch-BOA, the list goes on and on). Activision brought very little if any value to the acquisition of Blizzard or Infinity Ward. If I were a rival publisher trying to make as much money as possible, I would position myself as a much friendlier competitor to Activision and EA and try to suck as much talent as I could away from them at this point.

Robert Gill
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If you think that IW employees won't jump ship than you're fooling yourself and obviously haven't worked on games with a team before.

Benjamin Marchand
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Already posted on the other topic, but here, the picture brings all of its sense :



http://images.totalgamingnetwork.com/images/500x_custom_125321746
4546_SPF_02.jpg



West & Zampella could be laughing out loud in front of it, actually.



More seriously, I'm really sorry for them ... This move is so broadly gross that it should only happen in movies.

Benjamin Marchand
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And on a sidenote : Don't Activision dare to touch to Blizzard like this. Just don't they dare.

Also, I would be curious to see Mike Morhaime's reaction on this IW case. I'm not sure he will like it very much.

Ted Brown
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I'm pulling up a chair for this one. Popcorn?

Stephen King III
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@ Benjamin: While IW has been raking in the money for Activision, the Blizzard half takes that to a whole new level. After jeopardizing their CoD franchise, I wouldn't see Activision doing anything stupid in regards to Blizzard. But then again, we've seen Activision make questionable decisions before...

Tom Newman
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Rediculous. Activision has made some WTF calls in the last couple years for sure, but this tops the list, and all from a company who's CEO doesn't even use it's own products (in the DICE summit Kotick revealed he doesn't even play games).

Alan Rimkeit
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Here are the 16 pages of the court docs filed by Jason and Vince over at Kotaku. Read on for yourselves.



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

Ed Macauley
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"Next story will be 'The Golden Cow that was Milked to Death'."



More like The Golden Cow who was beaten, shot, had its corpse vilolated, buried in peat for six months, dug up and then used as an ottoman. There has got to be something hinky going on at Activision. How can they have the two most successful game franchises in history and yet fail to turn a profit?

Tyler Peters
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@ Gus: IW didn't make one game, they made 5. WWII wasn't a new idea, it's what they did with the experience of the game that made it fresh. I think they probably have a few more ideas in them. Secondly, if you make a $1B game (that is just MW2) I think you're going to have investors falling over themselves to fund you. No, make that trampling one another.

@ Chris Kykora: This has nothing to do with BC2. ATVI would have probably preferred to do this at a slightly different time to avoid such bad press near the release of DLC and the mention of the next COD. There are a million smarter ways to steal the thunder from a competitor - most notably releasing DLC, but they didn't. Probably because it wasn't ready. This news won't effect the sales of BC2 one iota.

And if the filings by Jason and Vince are true, and there is nothing that ATVI can substantiate for serious breech of contract, then ATVI has just screwed themselves royally. Losing Jason and Vince, to the detriment of one of the best teams in the industry, was incredibly ignorant.

Alan Rimkeit
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Read page 8 of the legal filings for what kind of agreements Activision allegedly made with Jason and Vince. If that is all true and both of those guys can prove it in court then Activision is deep sixed. It is simply amazing stuff.

John Sparks
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It is possible that they went against one of Kotnik's most famous of rules. They might have been having actually FUN developing their games.



Given the, "MW2 multiplayer is going to be much like MW1." statement one minute, then the abrupt switch to EventuallyPayToPlay.net, mess, I figured something like this would happen. You can only make so many deals with the devil before you get burned. I hope they roast ATVI personally.

Josh Green
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@Ted: Thanks, Ted! Don't mind if I do. Care for some butter on yours?

Tim Carter
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@ Alan Wilson: You *never* own your IP in traditional game development terms.



Never.



Read that again.



You - never - own - your - IP.



This is a myth of game development.



The studio you work for owns it.



If you founded the studio, then you can have majority control of this studio which owns its own IP. But *you* don't own it. The studio owns it.



The next question is: Who controls the studio that owns the IP?



If you want to get your game funded for development and marketing (assuming you actually want it 1.) made, and 2.) gotten in front of an audience), unless you are independently wealthy, you need investment. Then the investors will, in all likelihood control 51+% of your studio. Now they control the studio and the IP. Not you.



And, if somehow you get investment and retain control of the studio, what if you need expansion capital down the road?



Sooner or later you *will* lose control of the studio and the IP.



You would be much smarter to build your own brand as an individual creator and negotiate terms such as creative control and residuals as an individual creator. This gives you far more power than trying to manage an IP through administrative control of a studio; where you sacrifice your name brand to the studio brand - basically remaining anonymous to the audience.

Alan Rimkeit
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@ Tim Carter - I read your post and it makes a lot of sense to me. But I was wondering if that is all true how did Valve manage the situation they have going? It seems they are pretty much untouchable in terms of their IP's. How did they manage to do this? Is Gabe independently wealthy or are they just very lucky/smart?

Tim Carter
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@Alan Rimkeit: Half Life.



That one hit they had, in the right time and place, funded all of Valve's adventures. Steam, commercial release of Counter-Strike, etc.



But that was over 10 years ago. It was more of a wild west then. Is the situation the same today?



Anyway, look at this way: Is Valve going to fund your game? Not. Even if you slave away to make an awesome mod, and you get awards for it, odds are they won't pick it up, because they have grown to the largest they can get to.



Besides, Valve doesn't promote the names of its core creators. Can Kim Swift go off and make a new game with the same level of agency she can in Valve? Can she control her own destiny away from Valve? Did Valve give Kim Swift or any of the core creators of Portal residuals? - which would allow them to leave Valve, do projects of their own, and still receive ongoing compensation for Portal? Of course, to be fair, they probably like it in Valve, but Valve has Half Life and Steam under its belt - they can afford to be generous. They are the exception in the game industry, not the rule.

Alan Rimkeit
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@ Tim - I see. Well, I guess it was a combination of the right timing, luck, and skill. Good for Valve. Though I agree with you in a sense that it is all most impossible to do the same maneuver again as Valve did in the past and still stay independent in the current market. It seems that are sort of an anomaly in the video games industry.

Kevin Reilly
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I though Kim Swift left Valve: http://www.gamasutra.com/view/news/26404/Portal_Designer_Kim_Swif
t_Leaves_Valve_For_Dark_Void_Dev.php



Either way Portal was a student project at Digipen that got funded by Valve. Not sure what the gripe re: ownership as it was built on Valve's existing Source Engine and got each of the students a job. I think they got a pretty fair deal considering most students don't have their games published by a major developer.

Tim Carter
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@Kevin Reilly: Well, it got them a job then. Okay. Then it doesn't matter if they didn't earn any residuals for making their monster hit.



And the Source Engine comment? That's like saying that an artist's success comes down not to their vision and execution, but to the paintbrushes and paints they use.

Alan Wilson
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Tim: we've had this debate before, off-topic for this thread, but whatever...



Tripwire owns the IP. The 4 owners of Tripwire own the company outright. We all still work here. There is no external money in the company. No-one outside of us has any control of the company, IP or creative direction. We aren't independently wealthy - but after two titles developed and published, third on the way, we STILL own everything ourselves. Yes, I "share" the ownership of the IP with the other owners of the company. But we actually trust each other and agree on the direction of the studio.



Your view is about the creation of a purely personal "brand", rather than that of the IP or the Studio. My (our) view would be that that is only going to work if you have a massive hit up front a la Half Life. We would much rather create a brand based on the IP and the studio.



The number of those purely "personal" brands is extremely small in comparison to those of the IP and studio. And you know why? Because most games development is done by a TEAM, not by one single person. In using Kim as an example, you miss the point: she was part of a small TEAM, that joined Valve and became a bigger TEAM. The Portal TEAM built Portal, just as the TF2 TEAM built TF2, not just Robin on his own.



Not that we are ever going to agree on this one, I know. Different world views and all that. Me, I like working in a team - get far more done than if I was trying to do it all myself. And Tripwire is living proof that you CAN do it without having to give up everything you own. Actually, without having to give up ANYTHING, in our case. And when we need working capital, we raise it - without giving up ANYTHING.



But hey - it works for us. Clearly doesn't work for you. And never the twain shall meet, clearly!



[I'd also suggest, as I did the last time this one kicked off, that you put up a separate blog where we can rant away to our heart's content on the topic, without derailing whole threads like this one!]

Kevin Reilly
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Tim, that "monster hit" was part of a larger package of established IP and the enginge code is the product of years of development. Weak analogies aside I think crediting Valve's proprietary tools is appropriate because that allowed the Portal team to execute on their original vision. However you gloss over the fact that it was Valve that gave them a shot and that they are one of the reasons we are talking about any of those students by name. I have no idea if they got bonuses from Valve (and I am guessing neither do you), but considering how difficult it is to land a job let alone get your game published I would count it as a win. I am sure it is a nice credit to have on their resumes.

Tim Carter
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@Alan Wilson: Film is done as a team too. Yet somehow the individual creators get celebrated and so on.



You can look at the Aliens franchise. Same team over the different films. Yet when Ridley Scott and James Cameron were at the helm, it flourished. After them, it went downhill fast - even though core executives and creators way back from the 1979 original are still on the franchise.



Anyway, there are several centuries of art history to back up this position. Individuals matter.



Furthermore, if you carry your logic to its end, the conclusion is that individual creators' rights don't matter. Like the group versus the individual. I guess that would put you on Activision's side here.

Tim Carter
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@Kevin Reilly: They're just tools.



Anyway, when I came out of film school, I optioned a screenplay with a professional film producer. In the deal terms, if the screenplay lead to a hit franchise while I wouldn't earn residuals I would earn a fee for every spin-off product that was made across multiple IP streams. Plus I'd get my name promoted, as usual, in the credits. Fresh out of school.



Why was that possible in film, but not in games?

Alan Wilson
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Tim, don't go putting words in my mouth - especially about taking "sides" in corporate bickering. One day we may find out just exactly who was at "fault" in this whole shebang, but I wouldn't bank on it... in the meantime, I'll reserve judgement, pull up a chair and watch the attorneys accrue more damn wealth.

Mike Lopez
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I am sure EA would gladly fund a new studio for those guys and offer them legal protection, just like Kotick did when IW started and many employees came over from Medal of Honor. That way EA would secure great talent with new IP, while simultaneously sticking it to Kotick. It would be a win-win situation for both EA and West/Zampella.



What great folly that would make (EA to be seen as the good guys in a total role reversal from 9 years ago).

Josh Green
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@Tim Carter: It is possible. That's why you see CAA, William Morris, and other agencies out there jumping head-first into the game industry. Btw, what school did you go to? I went to a film school too. :)

Tim Carter
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York University in Toronto. Maybe not UCLA, but we met folks who worked for Cronenberg, Jewison and whatnot, and attended the largest film fest in the Western hemisphere every fall. I learned tons from my screenwriting prof who was a veteran producer in the real biz. He gave me golden advice in legal negotiations when I was a kid.

gus one
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Back on Topic. After reading that 'he said she said' document does that imply we will see a CoD Vietnam by Treyarch soon... I still miss BF Vietnam. Also I would expect that West and Zampella had non-poaching clauses in their contracts. It's normal practise in business so that's another reason I don't believe anyone will jump ship. You can only poach staff if they all leave at once. The cooling off period is normally 1 year. If those two try and come back and poach staff at a later date they'll be facing another lawsuit period.

Tim Carter
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Do they even need to poach staff? They headed a studio that made a game that made a billion dollars. Who needs to poach staff? Hire a whole new crew.

Kim Wahlman
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Quote from Activision:

"The company expects to release a new Call of Duty game from Treyarch this fall. [---]



The Call of Duty business unit will be led by Philip Earl, who currently runs Activision Publishing's Asia Pacific region and previously served in senior executive positions with Procter & Gamble and Nestle. Activision Publishing veterans Steve Pearce, chief technology officer and Steve Ackrich, head of production, will lead Infinity Ward on an interim basis. Jason West and Vince Zampella are no longer with Infinity Ward.



Lastly, Activision Publishing announced that the company is in discussions with a select number of partners to bring the franchise to Asia, one of the fastest growing regions for online multiplayer games in the world."

For anyone that hasn't read the press release it's available here: http://investor.activision.com/releasedetail.cfm?ReleaseID=448656



Can this one of the reasons behind the removal of Zampell and West? Maybe Activision just are fishing for a good excuse not to bring IW or these two along for the ride?

Alan Wilson
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Ah - the CoD "business unit" will be headed up by an ex-exec with a track record from Proctor & Gamble and Nestle... that bodes so well for a game business!

Timothy Looney
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modern warfare 2 was a major mistake, it has made a lot of pc users angry because of no dedicated servers and the fact the hackers has taken over and there is no help because of steam, whom it is believed has partnered with another company to sale the hacks under the table, though this is just a rumor. the best thing for these 2 gentlemen to do is release a dedicated server patch.

Timothy Looney
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roll this patch all over the internet and let steam kiss its little scam goodbye, steam was the mistake and now activision thinks it doesn't need them to continue.

Titar Imande
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Apparently West and Zampella have formed a new independent studio called Respawn Entertainment. 26 Infinity ward employees resigned and 16 joined Respawn.



Funnily enough, 38 Infinity ward current and former employees are also suing Activision. It's a good day for Attorneys.


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