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Court Filings Detail $36 Million Infinity Ward Lawsuit
by Kris Graft [PC, Console/PC]
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March 5, 2010
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Court documents have revealed more about the breakdown of the relationship between Activision and wholly-owned Modern Warfare studio Infinity Ward.
After Activision fired Infinity Ward studio heads Jason West and Vince Zampella, the pair filed a lawsuit on March 3 against Activision, as detailed previously by a press release from their attorney.
But the actual filing, available at IGN, additionally showed that the two plaintiffs are seeking $36 million, plus royalties. The documents also accused Activision of strong-arm tactics and an alleged unwillingness to honor previous agreements.
Along with compensation, West and Zampella are also seeking the contractual rights that "Activision granted to" the studio heads to control the Modern Warfare brand – the most recent iteration, November's Modern Warfare 2, generated $1 billion on its own, while the Call of Duty brand, which originated at Infinity Ward but also saw iterations from other studios, has generated over $3 billion in sales.
"This lawsuit is solely and regrettably the result of the astonishing arrogance and unbridled greed of defendant Activision," the pair's lawsuit claimed. "Plaintiffs Jason West and Vince Zampella are among the most talented and successful video game developers in the world. They created for Activision two video game franchises, Call of Duty and Modern Warfare, that became the most successful in the company's – indeed the industry's – history, lining Activision's pockets with billions [emphasis theirs] of dollars in revenue and creating a diehard fan base in the millions."
The suit said that Activision's alleged refusal to compensate isn't surprising, "given that Activision is run by a CEO who has been publicly quoted as believing that the best way to run a video game company is to engender a culture of 'skepticism, pessimism and fear,' and who prefers to pay his lawyers instead of his employees."
The plaintiffs also accused Activision of forcing Infinity Ward to develop last year's Modern Warfare 2 at a "break neck pace under aggressive schedules," and intruding on the creative process of game development. This was allegedly in contrast to Activision's assurance that it would allow Infinity Ward to be run as an independent studio, despite being a subsidiary."West and Zampella were concerned that Activision was emphasizing quantity over quality," the suit said. Under those circumstances, the two were "not eager to extend their employment," even as their latest game won numerous awards.
The pair additionally accused Activision of attempting to back out of a March 2008 agreement. Activision brought the agreement to the table in order to keep West and Zampella at work on Modern Warfare 2 and under Activision until 2011, according to the claim. That agreement said, according to the filing, that Activision gave the pair "creative authority" over the development of any Modern Warfare-branded game, as well as any Call of Duty-branded game set after the Vietnam War.
The agreement also said, according to the claim, that the plaintiffs have "the right to operate Infinity Ward independently," and create a new property after the completion of Modern Warfare 2. That same agreement also provided that Infinity Ward's staff would receive additional compensation in the form of royalties and stock options.
Activision responded to West and Zampella's suit yesterday, calling their claims "meritless."
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To me this smells like 1.) Infinity Ward went for the holy grail of most developers: acquisition by a publisher (Activision bought them for $5 million). But then 2.) as CoD kept getting bigger and bigger they realized that sheesh, that acquisition wasn't such a great deal after all. "Guys we could have had a piece of all the moolah that CoD is earning!..." So then 3.) they signed a "Memorandum of Understanding" which retroactively incorporated creative control and a royalty into the acquisition. How did that come about? Didn't they already do a deal? Does this MOU stand up? How substantial is it? Who knows at this point.
Too bad they didn't just have those things clarified in their original "acquisition" - but then again, maybe getting acquired isn't the be-all-and-end-all if it means you become an employee once again and are cut out of a slice of ginormous profits or get no residual income if you make a hit.
yeah so? its obvious. deals are made and remade all the time. everything cant be always be clarified in original deals. if they both agreed to rework things, than that is what you go with.
Guess we'll have to wait for the other shoe to drop.
Anyway, I'd say that they've certainly overstated their claims about their creative efforts, no question. But this isn't a new tactic, either. Sales of CoD since the acquisition are certainly due in large part to having a well-established publisher to market and advertise your product. Making a good product doesn't matter one iota if no one knows it exists.
I read on a previous thread that someone wanted to claim that "developers are bigger than publishers because CoD 4: MW 2 has made $1 billion." Well, no, that's not how business works. The reason the product has sold in those numbers is largely due to Activision publishing the title and all the associated marketing, advertising, etc that they bring to bear. If IW was offering their games independently, they would not see such sales of CoD titles (as they didn't prior to being acquired, if I'm not mistaken). There's also the funding of development that allows whatever finesse the final product contains. It's much easier to turn out a quality product if you have some type of financial stability, after all, while it's well nigh impossible to consistently turn our quality products (or even stay in business) without financial stability.
I had to reread one statement that said they felt that Activision rushed them through the new game and that they felt that Activision was pushing "quality over quantity" ... huh?! Ok... but I'll take quality over quantity anyday, thanks. In fact, pushing quantity over quality is one of the biggest problems with the industry today, in my view. It happens in all popular media, though.
The only franchises that last forever appeal to the very young (Mario which is basically the same game every time) and sports games where licenses can be bought out. Even perennial hits like FF have hit hiccups in the road in terms of sales when quality declined. Thinking that COD will be the golden boy forever is silly given how much competition there is.
about your last concern, the contents of the agreement that Activision brought to the table are mentioned in the following sentences and paragraph.
@Thomas Lo
about Mario games being the same every time, I don't think you've played many Mario games, have you? Mario Galaxy and Mario Kart are entirely different for example. Mario RPG and Mario World, again entirely different games. The only thing that is similar with all the Mario games is the IP (which is the hot topic these days when it comes to games). Gameplay-wise, Mario is probably the most versatile IP on the market. If Mario games were all the same, Nintendo would be in Midways shoes right now.
If Activision wants the CoD IP to last longer, the next big installment needs to go in 3rd person view, once S-3D (Stereoscopic) takes over (own personal opinion). Otherwise CoD will stagnate like Mortal Kombat did. But unfortunately, Activision only likes onslaughts of sequels of the same gameplay (Guitar Hero, Spider-Man, Tony Hawk, etc.)
I think that you seem to be out of touch with business and economic reality, I'm afraid, because publishers offer the financial opportunity to actually market and sell your product on a broad scale. Likewise, they offer the financial backing to conduct develop that you cannot do as a private group unless you have some sort of extremely well-funded sources. Yes, there are exceptions to these facts, but those are exceptions whereas we are speaking of general reality in business and economics. Advertising is huge for media products, and that's what publishers offer in addition to their development funding. Thye have the necessary contacts to get your products into the major distribution channels and into the awareness of the general public. Independent developers seldom have such resources or, even if they have the money, do not have the "people contacts" that are necessary in order to market products successfully.
I have to chuckle at your comment about the PC and services like Steam leaving publishers behind, especially since the vast majority of titles on Steam are simply Valve publishing works by other companies through their service. However, such a service has limited appeal. This has been shown by Gamasutra's own surveys and analyses as well as reports of Steam's membership. The last report for Steam that was announced was 25 million as I recall, and that's nothing compared to the PC user base, not even compared to a free to play title like Maple Story with a reported 90 million user base. Developers such as Bethesda and Bioware, as well as others such as tri-Ace and Eidos, would not be doing their games if they did not have the backing and support of major publishers, or at least would not be able to do the games the way they envision them. You would not have id Software being purchased by Zenimax if publishers were not key to success (in general, mind you).
Whether this is good or bad is perhaps debatable, but it is nonetheless the way the industry works (or other media industries, for that matter) due to the costs involved as well as the enormous size of the global market.
In a perfect world, budgets will be big enough for a developer to do whatever they want. But the reality is, they can't and often times it's better that they have a deadline since it forces them to stop throwing every possible idea into the game. Time and time again you read about developers wasting time on features that maybe a handful of people would notice or care about but it forced them to crunch later in the timeline.
There's no simple answer to this since we're talking about what is ultimately a creative endeavor. And, as someone said, I'd love to hear Activision's side of the story but something tells me they won't say too much given the lawsuit. We'll either just have to wait or just accept the fact that sometimes you can't win, even if your franchise is selling billions of dollars worth of games.
Yep - people forget just how much of the funding for games development still comes from the publishers. Stop and do the math and it is rather less surprising - and perhaps less surprising that a mess such as this one shoulkd come along. Also note Activision's comment about asctually starting IW. All a messy situation!