West, Zampella file suit vs. Activision after ousting

The ousted heads of the studio responsible for last year’s bestselling videogame are firing back at Activision Blizzard. Jason West and Vince Zampella have filed suit against the publisher, alleging wrongful termination and breach of contract.

The pair, formerly the leaders of developer Infinity Ward, are seeking in excess of $36 million, future royalties for Modern Warfare 2 and an injunction that would prevent Activision Blizzard from releasing additional Modern Warfare games or Call of Duty titles set in post-Vietnam War timeframes.

West and Zampella were fired Monday, charged with breach of contract and insubordination. In their lawsuit, the pair say the investigation into them began Feb. 3 and was the modern-day equivalent of a witch-hunt.

“From the very beginning, it was clear that the purpose of the investigation was not to uncover any facts concerning any actual wrongdoing but to manufacture a basis to fire West and Zampella,” reads the filing. “Activision refused to tell either West or Zampella what specific acts or omissions Activision believed they had committed or what was prompting the investigation, insisting instead in Orwellian fashion that West and Zampella ‘already have a clear understanding of what they have or have not done.’ “

Activision responded by calling the claims meritless.

The pair maintain they were terminated “weeks” before they were to receive their first royalty payments for “Modern Warfare 2,” which has earned more than $1 billion worldwide since its November release.

They also say a renegotiation of their contracts in 2008 included a clause that prevented Activision from making any “Modern Warfare” game or “Call of Duty” title in the post-Vietnam, near future or distant future without their written consent. The suit indicates the pair hopes to retain creative control over the brands in dispute. If they manage to do so, the damage could be significant to Activision Blizzard. The Call of Duty franchise is one of the company’s most important. Wall Street analysts expect digitally downloaded expansion packs for the game could account for nearly $84 million in revenue this year alone.

Even if Activision Blizzard wins the case or it is settled out of court, the gamemaker could still be hurt. Developer/publisher relations are delicate, and the harsh accusations in the filing could impact the company’s ability to lure creative talent in the future.

It’s also still undetermined how many (if any) current Infinity Ward employees will leave the company to join West and Zampella’s inevitable future venture. If the number is significant, it could be a meaningful loss of talent for Activision. In addition to the add-ons for “Modern Warfare 2,” Infinity Ward is reportedly in the midst of developing a new intellectual property for Activision.

This isn’t the first time Activision has gone toe to toe legally with a development partner. In 2005, Spark Unlimited, which had done work on the console game “Call of Duty: The Big Red One,” sued the publisher for breach of contract.

Activision CEO Bobby Kottick “is someone who is unafraid of litigation and unafraid to use it or be in it as a business tool,” said Dan Offner, an attorney with Loeb & Loeb who specializes in the videogame industry. “To me, this lawsuit is more about money. I don’t think Activision is ever going to give (West and Zampella) back creative control if (it) absolutely, positively can help it.”

“Modern Warfare 2″ was not only 2009’s bestselling videogame, it is also the biggest entertainment event on record: 4.7 million copies were sold in the first day in the U.S. and U.K. –and the game earned $550 million in just five days.

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