Macro Tsimmis

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Archive for March, 2010

Activision Blizzard (ATVI) update #12—Call of Duty: legal warfare

Posted by intelledgement on Thu, 04 Mar 10

Our game publishing company, Activision Blizzard (ATVI), stunned the video gaming world Tuesday by announcing the firing of Infinity Ward CTO Jason West and president Vince Zampella, the two founders of that company, which design and develop the “Call of Duty” and “Modern Warfare” line of first person shooter games. Activision, which had funded the development of Infinity Ward and already owned 30% of the company, purchased the rest of it in October 2003, the day after the release of the original “Call of Duty” game. Between them, the “Call of Duty” (set in WWII) and “Modern Warfare” games have sold an estimated 50 million units across all platforms.

The firings reportedly occurred on Monday, 1 March, and on Tuesday, Activision issued a press release announcing “new strategic plans for the Call of Duty® franchise” which tersely stated, “Jason West and Vince Zampella are no longer with Infinity Ward.” Then yesterday, West and Zampella filed a lawsuit against Activision claiming “breach of contract, breach of the implied covenant of good faith and fair dealing, wrong termination in violation of public policy….” Looks as if the legal warfare could be going on for a while here. So far, investors are pretty much figuring that Zampella and Jason West are dead—that is, their legal challenge poses no material threat to the “Call of Duty” or “Modern Warfare” franchise revenue streams to Activision—as the stock price was up 3% on Monday and has hardly budged since then.

But it will probably be some time before the dust clears here and we really know [a] what happened and [b] what the final outcome will be. Stay tuned.

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