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In-Depth: Activision Adds EA To $400M Cross-Complaint Against West, Zampella
In-Depth: Activision Adds EA To $400M Cross-Complaint Against West, Zampella
December 21, 2010 | By Kris Graft, Leigh Alexander, Staff

December 21, 2010 | By Kris Graft, Leigh Alexander, Staff
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    22 comments
More: Console/PC



Activision on Tuesday filed to amend a cross-complaint in the case involving former Infinity Ward heads Jason West and Vince Zampella by adding rival Electronic Arts as a defendant, and claiming "unlawful conduct" from "the highest levels" at EA, including CEO John Riccitiello.

The strongly worded amended cross-complaint, obtained by Gamasutra, alleges that EA conspired with West and Zampella to encourage the two to break their contract with Activision, a contract that still had over two years left. Infinity Ward is the original creator of the Call of Duty military shooter franchise, which has generated billions of dollars.

The original cross-complaint, filed this April in response to a lawsuit from Zampella and West, also accused the two executives of meeting with EA executives while still employed at Activision, but now counsel for Activision believes it has more evidence of breach of contract and fiduciary duty.

Activision is now naming EA alongside West and Zampella as alleged co-conspirators. Activision claims that negotiations began as early as July 2009, about eight months before the two executives were ousted from Activision.

EA VP of corporate communications Jeff Brown responded to the suit in an email to Gamasutra: "This is a PR play filled with pettiness and deliberate misdirection. Activision wants to hide the fact that they have no credible response to the claim of two artists who were fired and now just want to get paid for their work."

Along the way, Activision alleged that EA "conspired to set up an independent company staffed by key Activision employees, including designers, programmers, artists, and others from Activision’s Infinity Ward development studio, thus draining the studio of talent and potentially delaying future Call of Duty games."

This alleged behavior was encouraged by EA and the Creative Artists Agency, according to Activision's claim, "with full knowledge that the executives were under contract and legally committed to Activision for more than two additional years."

The amended suit claimed that West and Zampella, "emboldened by their secret alliance with Electronic Arts, the executives refused to adhere to even the minimal standards of behavior required of any employee or executive."

Alleged Insubordination

Specifically, the pair are accused of being uncooperative regarding the Call of Duty franchise, allegedly refusing to work with Treyarch on a unified brand. Activision also claims that West and Zampella refused to cooperate with the process that would allow Infinity Ward developers to be paid retention incentives, in an alleged attempt to make it easier to lure other staffers away with them. The suit claims the pair "were already appropriating for themselves approximately 1/3 of the total Infinity Ward bonus pool each quarter."

"In order to make it unlikely that these employees of Activision’s Infinity Ward studio would remain with Activision, West and Zampella attempted to block those employees from receiving significant equity grants and/or other compensation, suggesting instead that Activision provide the additional compensation to West and Zampella alone, not to the many valued employees to whom Activision was offering this extra compensation."

The suit claims the pair "adamantly refused" to provide the names of employees set to receive bonuses.

$400 Million In Damages

Activision's lawsuit also claims that the conspiracy to lure Infinity Ward employees away from their parent company went to the top of EA's management.

"The unlawful conduct came from the highest levels at Electronic Arts, including EA Chief
Executive Officer, John Riccitiello, and Chief Operating Officer, John Schappert, with direct
support from the high profile talent agency, Creative Artists Agency, and even a former member
of Activision’s Board of Directors and former Activision lawyer," reads the suit.

Activision said it is seeking $400 million in damages from EA, West and Zampella. The publisher said the alleged interference caused a loss of profits, costs incurred from rebuilding Infinity Ward and damages from "delays and disruptions."

The Call of Duty publisher is also seeking a judgment to get back compensation already awarded to the "faithless executives" West and Zampella.

The publisher exhibited new documented evidence in the complaint regarding a business meet-up between EA and the two executives from EA's own records, and files from talent agents and attorneys.

For example, Activision is claiming that "On August 28, 2009, Electronic Arts dispatched a private jet to fly West and Zampella from Southern California to San Francisco where they were picked up and shuttled to a secret meeting with Electronic Arts at Riccitiello’s home and then flown back to Los Angeles."

Activision said the motivation behind EA's alleged dealings with West and Zampella was to "disrupt and destroy Infinity Ward," a studio that is EA's biggest competitor in the popular first-person shooter genre. EA's FPS series include Battlefield and Medal of Honor, which do not approach the sales of recent Call of Duty entries.

West and Zampella eventually went on to found Respawn Entertainment with several former Infinity Ward employees. Respawn then signed a publishing deal with EA Partners.

The core of the allegation from Activision is that "the negotiations between Electronic Arts and West and Zampella were structured with the design and the expectation that West and Zampella would “spin out” from Activision and would take significant numbers of key Infinity Ward employees with them to set up their own independent company."

This was done "...so that Electronic Arts could make another run at competing with Activision. Electronic Arts would finance the illicitly-created start-up in exchange for an ownership interest or exclusive distribution rights to the content created by their new company, which would produce video games for Electronic Arts instead of Activision."

The suit further alleges that EA was not just interested in gaining the Infinity Ward talent, but it also wanted to use West and Zampella's Call of Duty knowledge to bolster the prospects for its Medal of Honor, in a "blatant attempt to gain an unfair advantage."

"Crush And Destroy" Treyarch?

Another part of the Activision lawsuit dealing with West and Zampella's allegedly untenable behavior touches on the tension between developer Treyarch, which created Call Of Duty: Black Ops for this holiday season, and franchise originator Infinity Ward. As the Activision suit claims:

"On the same day that Treyarch released a video trailer promoting a follow-on product – a “map” pack or “downloadable content” – designed for players of Treyarch’s game Call of Duty: World at War, West and Zampella released a marketing video for Modern Warfare 2 with the purpose of hurting Treyarch’s and Activision’s marketing efforts.

"Far from being remorseful, West attempted to justify his actions on the grounds that Treyarch had insufficiently coordinated with Infinity Ward by stating: “We released on the same day as you because we had no clue you were releasing anything. We are not happy about it.” The real truth, however, was revealed by a series of text messages between West and an Infinity Ward employee contemporaneous with the video trailers’ release.

"The employee texted West that “treyarch released their mp dlc video.” West responded: “Super nice? We release our video? Crush and destroy with our video.” The employee answered: “We already did. And . . . we already did.” West’s following comment: “Nice.” Thus, West’s own words reveal his intentional strategy to “crush and destroy” his fellow developers at Treyarch."


"JR Cooks A Mean BBQ"

The lawsuit also names the Creative Artists Agency, which represents West, Zampella and other industry talent, such as Will Wright. It alleges that members of the CAA "had been attempting to ingratiate themselves as participants in the video game industry", and eager to work work with the Infinity Ward co-founders, pursued them.

The suit claims that the CAA's Seamus Blackley, at the encouragement of EA CEO John Riccitiello, sent emails to Zampella suggesting they should discuss "an amazing thing", and that "JR cooks a mean BBQ," where "JR" is intended to refer to the EA CEO's initials and common nickname. "I think we could accomplish some interesting chaos," it says in what the suit alleges to be an email from Blackley to Zampella.

Further, the suit names "Gang Tyre", or law firm Gang, Tyre, Ramer & Brown, which Blackley is accused of advising to represent Zampella and West in the alleged "secret" negotiations with the CAA and EA. The individual specifically involved is allegedly one Harold Brown, of whom the suit claims: "Brown had served as an Activision board member and advisor, and in that capacity Brown was privy to numerous confidential compensation documents detailing Activision’s confidential compensation and reward practices."

A major point in the suit is the allegation that the accused worked with Brown specifically to, as the suit says, "cloak the illegal negotiations that ensued among them with the secrecy they presumed would be provided by the attorney-client privilege." He is also noted to be allegedly the former classmate of an EA executive whose name was redacted from the legal documents.

[UPDATE: Added EA response, additional quotes from lawsuit.]


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Comments


steve roger
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There is an obvious defense to be used here: SO WHAT.

R G
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Bwl, that made my day.

Tim Carter
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Why game developers allow this to happen to themselves I will never know.



Creators in other entertainment industries would never stand for it. (Well, okay, movie stars did have stuff like that happen to them back in the 30s and 40s... but that was a long time ago.)

Bob Stevens
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Allow what to happen to them? Getting fired for breach of contract? They should sue ATVI I guess...



Oh wait, they did. This is the countersuit being amended to add EA as a defendant. Actually not a whole lot of it is new either, just the stories Gamasutra summarized above and a couple hilarious emails from the CAA guy obviously thinking he was James Bond.

Tim Carter
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I think you're losing the lesson here.



By game developers insisting on focussing on beating up Kotick / Acti they are perpetuating a kind of victimhood on their own part. They keep themselves helpless.



The kind of deal that West / Zampella made would *never* have been made by a seasoned entertainment professional, with an agent, in another entertainment field.



Why are game developers not learning this? If you want a good deal, insist on one. But if you ask for a bad deal, and then get a bad deal... sure you shouldn't have gotten one, but buyer beware... plus, you're a fool if you just repeat this without learning.

agostino priarolo
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With the following comment I just want to express my freedom to speech and reveal my personal opinions on the subject:



Something is telling me that sadly at the end Activision will lose (and will have to pay for) that cross-complaint; also, is telling me that Mr. Kotick finally will lose his job:



"In order to make it unlikely that these employees of Activision’s Infinity Ward studio would remain with Activision, West and Zampella attempted to block those employees from receiving significant equity grants and/or other compensation" <= exactly how did they do this? lol you make me sick. News said that it was you that didn't pay your employees, you and only you.





"Thus, West’s own words reveal his intentional strategy to “crush and destroy” his fellow developers at Treyarch." <= I'm sure he used the words "Search and Destroy", but he could have just mixed up, as a joke, the name "Crash", one of the maps inside the new map pack download advertised, to the "Search and Destroy" Modern Warfare game mode, or maybe it was you, Kotick, who suggested to change the word just to add a little bit more chily pepper to the whole story, didn't you?



I see that those text messages contain only some sarcasm related to the fact that the two developers were pulling out two ads at the same time but without telling us who came out first.

He said "Crush and Destroy with our video", which means, beyond what you would like it to mean, "YOU are playing Search and Destroy with our video". And not "WE are crushing you with are video". Everybody who played the game just a little bit, which, I believe, doesn't include Mr. Kotick, know that Search and Destroy is like to see which one will plant the bomb first and see if the other is able to disarm it. Nothing more, nothing less. Mr. West clearly was joking on the fact the the two ads came out at the same time, and you could see some sort of competition between the two developers (perfectly understandable competition I think).



Mr. K., You make me sick. Leave game artists and developers do their job, open your wallet and go to the cinema, don't break the balls. You will earn your money at the end, don't worry.

gus one
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Conversely West and Zampella could lose everything including their reputation which is already in tatters. Going to be interesting now the two largest games companies are locking horns.

R G
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Agreed. Like I said in the more recent thread, would you like the popcorn?

Tim Carter
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Well, the law, from what I know, tends to favour the ability of people to practice their craft over the ability of a corporation to hold them as an indentured servant.

R G
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True that. I personally think that IW is going to win, but hey I've been wrong before.



Or have I? MWHAHAHAHAHA!



Ok, I'm done :).

Nathaniel Smith
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**ponders for awhile**



...wait, what?

Dave Dundy
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hahaha Activision has truly lost its mind

Thomas Lo
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The cross-complaint is pure BS and is meant to strengthen Activision bargaining position (at the cost of the truth). The series of events that happened do not reflect the complaint as the two were fired without any mention of EA and only now has Actovision decided to stick it to EA.



Ockham's Razor is simple in this matter. Here is what it says about the events that happened.



Bobby Kotick has no talent. He realizes this and seeing Guitar Hero die out and the Tony Hawk franchise continue to sputter out, has only one key franchise life: COD 4. Since his brain is tiny and his position in the value-added process is replaceable, he goes for the ruthless, rent-seeking approach (the kind of approach that said the AOL-Time Warner merger was a "good" idea). He sacs the head of Infinity Ward because they are not milking COD 4 enough with microtransactions and to cut costs (they don't pay royalties to the other crappier developer that makes the alternating COD's).



Pretty simple. It's now up to the court's to decide whether such actions are appropriate since the heads of IW were under contract; contracts which were grossly breached by Actovision.



Bobby Kotick is incredibly lucky that he was able to merge with Blizzard, thereby hiding Actovision's underlying weakness.



It's 2 previous biggest moneymaking franchises: tony hawk and guitar hero have collapsed like dying stars. COD is headed that route too as they will lack the magic that IW had and peter out just like the Medal of Honor franchise did when the same founders of IW left EA. Black Ops doing well this Christmas hides that fact. But the next few cycles we are going to see much stronger competition in the FPS market. I wouldn't bet on Actovision if I would bet on Actovision-BLIZZARD (blizzard being such an amazing developer it can save a sinking ship like Bobby Kotick).



It was a stupid move on Actovision's part in terms of long-term shareholder value. Milking COD 4 with microtransactions is not going to be as profitable as they think. They also lost out on IW's new IP which probably would have been amazing and created a new franchise.



At any rate, Bobby Kotick is gone in a few years anyways with the same golden parachute talentless corporate fat cats get.

Daniel Boy
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"It's now up to the court's to decide"

I will eat my shoes, if it isn't settled out of court. The real "battle" for me will be between Respawn's next two games (the first one might be a dud) and the next IW/Treyarch/Sledgehammer games. Maybe I'm kind of old fashioned, but: Let the games decide!



"Bobby Kotick has no talent."

Treyarch's CoD looked quite nice to me and IW was not a two (or six) person company.



"has only one key franchise life"

leaving blizzard out of the picture you are onto something: Without CoD Activision wouldn't be a tier one publisher. Maybe that is why they reacted very sensitive on signs of defeatism by IW.

Berend Gorkom
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This is really an attempt to prolong the lawsuit from West and Zampella...blow enough smoke to make everything else invisible. All marketing, none of it probably true....



Bob Kottick says:

1. West and Zampella are the bad guys

2. Treyarch is such a great development team, no need for Infinity Ward

3. EA has conspired to break up infinity ward so they could claim that market share of FPS with medal of honor and BF



Kottick is the devil of our industry...unfortunatly we all need him...

One can only hope that the devil gets fired from the office :D

Alex Bogdanov
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Strangely vague counter-arguments by the devil, but still, it does add some more publicity to them....

Oh and by the way, the devil wears Prada (sry couldn't resist)



----



Everyone please vote for Final Fantasy X on www.gamefaqs.com. It's the Game of the Decade contest!

Luke Skywalker
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I give the experience edge in lawsuits to ATVI (how many participating artists from the GH series have sued ATVI at this point?).



I agree that it's going to be settled out of court, and the real battle takes place two years (or so) hence with the head to head release of games from ATVI (Trey or Sledge) and Re-Spawn. As a game consumer, I look forward to the results.



Everybody dislikes Kotick, but I haven't heard a reasoned argument as to why the lawsuit from Activision is invalid (in this thread). If they were under contract, a contract they entered into willingly, then unless that contract is superseded by employement law it's valid and binding (regardless of how anyone feels about it).

Mark Harris
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These are not the types of threads that draw reasoned debate, unfortunately.

Luke Skywalker
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Less and less reasoned debate on Gamasutra of late (sadly).

Ronaldo Fernandes
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I am pretty sure this will be settled outside the court and thus I am afraid we will never know what exactly happened. Kotick was once called to be a prick and he does little to improve his image. However, I don't think we have a bunch of victims here. I am more prone to believe that all parties did a lot of dirty movements behind the scenes and we'll never know about it.

steve roger
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Luke,



I am an attorney with 20 years of experience and my comment towards Activision is based on my reading of the complaint and it's amendments: SO WHAT is what I would responding with on behalf of West and Zampella. I don't see any act(s) by West and Zampella that constitutes a breach of their agreement with Activision that results in some kind of quantifiable damages.



Luke, where is the harm that these guys did to Activision?



In fact, it looks like to me that Activision and the Call of Duty developers are awash in cash. Where are the damages? I see record breaking profits.



No damages = no case. And the reality of this pissing and moaning by Booby Kotex is that Activision and it's shareholders will not be interested in having to fund years of bloated legal fees because of hurt feelings and bruised egos. The case will settle as soon as the cost of litigation exceeds the amount that Activision would have paid West and Zampella as bonus money for Call of Duty.



Bobby cares about money more than he cares about winning a lawsuit against two guys that he wants out the door anyways--who were already making it abundantly clear that they were going to quit Activision as soon as they could set up a situation that would give them a game development deal that they could stand.

Jeffrey Crenshaw
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This industry is governed by children.


none
 
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