Call of Duty court case settlement could be 'tens of millions' says analyst

Cowen & Company analyst estimates value of deal between Activision and Jason West and Vince Zampella, says StarCraft II: Heart of the Swarm will ship in 2013, with MoH: Warfighter sales expectations reduced.

The high-profile case between Activision and Infinity Ward founders Jason West and Vince Zampella ended in May in an undisclosed settlement paid to the developers. No mention was made of the terms of that deal at the time, but Cowen & Company analyst Doug Creutz says today that the settlement could be worth tens of millions.

Jason West and Vince Zampella pocketed millions and millions from Activision, according to Creutz.

Activision will report earnings this week, and Creutz believes investors will ignore whatever impact the settlement has on the publisher's bottom line when addressing the health of the company.

In March 2010, Activision fired ex-Infinity Ward heads Jason West and Vince Zampella for insubordination, claiming the pair were secretly planning to start their new studio with the help of Electronic Arts.

West and Zampella filed a lawsuit against Activision for this move, alleging the real reason they were fired was so Activision wouldn't have to pay them millions of dollars in royalties associated with the November 2009 title Modern Warfare 2. Beyond the performance-based payout and any other court-awarded monetary damages, West and Zampella sought to gain co-ownership of the Modern Warfare brand.

Also in Creutz's note today were updated sales and release date expectations for popular Activision Blizzard games, including StarCraft II: Heart of the Swarm and Diablo III. The industry watcher noted Blizzard often puts its games into beta for 3-6 months before release, meaning with just five months left in the year and no beta announced yet, Heart of the Swarm is now likely to ship in 2013.

As for Diablo III, Creutz said he expects the dungeon-crawler to record first-year worldwide sales of 8 million units, up significantly from the 5 million forecasted earlier. That game went on sale in May and has already moved more than 6 million units.

Switching to expectations for Electronic Arts and its stable of titles, Creutz said fiscal year 2013 results for the publisher have been "meaningfully" reduced due to diminished sales forecasts for Medal of Honor: Warfighter. Creutz now expects the game to sell 1.44 million units in the United States in the holiday quarter, down sharply from the 2.33 million forecasted prior.

This reduction is based on what Creutz called a "very soft performance" since the 2011 Electronic Entertainment Expo in Amazon's top-selling game rankings, compared to other new games. Creutz chalks this up to the "poor quality" of 2010's original Medal of Honor reboot.

Additionally, Creutz was not so hot on Star Wars: The Old Republic. The industry analyst has downgraded previous subscriber base expectations from 1 million to 500,000, due to "continued poor server density trends." At EA's last count in May, Star Wars: The Old Republic boasted 1.3 million paying subscribers, a decline from the 1.7 million from February.

EA will report earnings tomorrow afternoon, with Activision Blizzard to follow on Thursday, August 2.

Written By

Eddie Makuch is a news editor at GameSpot, and is a big UCONN athletics fan.

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Discussion

69 comments
therebemonsters
therebemonsters

honestly don't understand why there is no love for the moh reboot. 

single player wise it was a far better modern military shooter then mow 2, mow 3 and bf 3, mainly because it actually was a military experience type of game and not some rambo crap :P (also was a very pretty game with lovely landscapes and long walks on mountains)

BonEcho
BonEcho

Sometimes EA makes me mad with how they treat their costumers and employees. There do make most of the big name games though. Thing means that you kind off have to put up with what they do if you want to play things like Crysis and Battlefield 3. 

tehtimeisnow
tehtimeisnow

good to see the game makers that maked the best game of all time get millions of dollers they desreve it

Anigmar
Anigmar

Why all these articles about analysts previsions? I thought Gamespot was about previewing, reviewing games... not all these "what someone think will happen" news. If I wanted financial previsions or news I'd go read a financial newspaper/site. And once again, who cares what some guy in a suit thinks about how much a game will make? At least I hope if his estimations are wrong we'll see an article about that too, with a headline like "Analyst estimations fail - finds new job as fortune teller".

ghost688
ghost688

Call Of Duty Modern Warfare franchise was the better i played ever, with very good action situation, dramatic moments, surprised situations and fun characters with a amazing history in campain and multiplayer pieces, forming a great game. i love MW.

Dieofnv
Dieofnv

this is my problem with gamespot in a COD news i get unrelated data or information/bashing MOH Warfighter.

 

i feel that gamespot is bash MOH every time they have a chance 

 

gamespot: this just in activision is going to pay for their actions but its OK they have tons of money and the investors are happy.

in other news MOH pre-orders going to be down so the game is GOING TO SUCKKKKKKKKKKKKKKKKKKKKKKK

 

let me tell you as a gamer first and an army vet second the 2010 medal of honor has one of the best story i have seen/played.

a more believable story and AUTHENTIC atmosphere, now the multiplayer was ok 

and the game had some glitches but so does COD.

i havent heard or read anything bad about the COD Black ops 2.

where is the shooter fatigue article about COD. 

PlatinumPaladin
PlatinumPaladin

Holy crap, I'd pretty much forgotten all about this. It felt like GameSpot had been reporting on every time a lawyer went to the toilet during a meeting and yet I've seen no articles about the course of the trial or even that it had ended. // I'm very eager to learn of the terms of the settlement including whether West and Zampella got shared ownership of Modern Warfare.

super600
super600

So investors will ignore the settlement like it's nothing.

NoLifeGamin
NoLifeGamin

I feel sad for Infinity Ward, whose currently doomed to forever slave away making NOTHING but COD games.

killer_kupkake
killer_kupkake

Creutz! You are mistaken when you say there has been no Heart of the Swarm beta! It was featured at MLG Spring Arena, hundreds played it and games were streamed live. There's hope for 2012 still!

joju_australia
joju_australia

Hey Creutz!..how much are they paying to be putting MoH 2012 in such a bad light? the game hasnt even come out and you are making such predictions! very poor !

MJ12-Conspiracy
MJ12-Conspiracy

I knew about the court settlement already, it's really none of our business what the settlement was, if it helps them make a better game that's all that matters. 

I never buy Activision games, not new at least and for good reason...

I picked up a copy of Goldeneye Reloaded...bad game, not worth the hype or worthy of the name. Transformers WFC was an okay game but was very unbalanced, multiplayer was okay for a couple hours but after that it get's old. 

EA just sucks anymore about as bad as Activision and yeah TOR is kinda a joke....Bioware should have just stuck with KOTOR 3, it would have been loved more I bet....

I hate these two publishers...everything they do is junk then there's one or two franchises in both camps that are just giant monsters running around....just die already would you please.....

Cellwind
Cellwind

HA, that's what Activision getsand the best Call of Duty was Modern Warfare 2, imo.  As much as people complained about Noob-tubing in MW2 and Quick Scoping(still in MW3), I like the idea of certain things being over-powered. 

 

Diablo 3 was a huge disappointment for a lot of people and they can't get their money back.  Wow was great at first but due to balancing issues because of pvp has been destroyed.  How the mighty have wonderfully fallen.

 

CieloPerso
CieloPerso

Good for them. The original CoD games were INCREDIBLE (I can't emphasize that enough) and what I've heard about Activision... well, you know.

beuneus12
beuneus12

anyone still cares for this story? Guess some 'analyst' needs attention

speed45823
speed45823

Unactivision and EA (Egotistical A-holes), these are the plagues of the gaming industry. Hope to see them choke on their own scams.

bigruss51
bigruss51

A punch to activisions face hoorah!

mrzero1982pt2
mrzero1982pt2

medal of honor warfighter will have the "zone of the enders" effect. you remember that title sold like hotcakes because it came with a huge demo of metal gear solid 2! same thing will happen with this because it has a guaranteed beta key for battlefield 4. same as halo 3 ODST had a beta key for halo reach. they attach beta keys to games to increase sales. will it help when it comes to multiplayer? if DICE isnt attached to that, expect folks to come for the single player and have the game sit on their shelves until next year when the beta comes out. battlefield is the king to beat this year because they have no game coming out, just tons of DLC through next march, while call of duty is going to come out again with 15 dollar map packs. activision is just getting used to giving the fans what THEY (activision) think they want: unfinished, incomplete games and charging them full price for an expansion. couldnt call of duty black ops 2 have been a 30 dollar downloadable? or an expansion? no. they care about the bottom line. 

Elann2008
Elann2008

Activision has quickly become the plague of video gaming.  First, they turn the Call of Duty series into a mockery of the video game industry, where money matters more than making video games that are fun, and leading innovation.  

 

Then they merge with Blizzard, literally tainting a once great developer.  The result, Diablo 3, a very non-Blizzard style game, with a horrendous business model.  

 

No wonder Vivendi (who probably started this giant mess), wants to sell Activision Blizzard for 10 billion dollars.  Irony here is, no company wants to buy them.  It's a giant mess.

PixelAddict
PixelAddict

I can imagine the Activision execs were momentarily annoyed, and then told their managers to whip the front-line workers into action,

 

"Spin us out 2 extra DLC packs, STAT!  We need to make up for this settlement!"

redskinStu
redskinStu

If they want to improve TOR, put in a planet where the only thing you do is cut Jar Jar Binks in half with a lightsabre. Over and over and over again.

chechak7
chechak7

please put a good resolution picture for  article not pixel one (COD)  any Activision  have a lot of money ..no problemo   :D

dharper7
dharper7

 @Anigmar This news is extremely relevant for many gamers who are interested in the industry itself. The estimates are rarely correct, but it is looking in between the lines that makes these articles important resource.Stop complaining and learn something new. I love that these sites are branching out and offering this info

Anigmar
Anigmar

 @Dieofnv Remember MOH: Warfighter lead designer pawned gamespot's employee in the "game shouldn't be fun" debate during last E3. Guess they're taking revenge.

KuRf
KuRf

 @super600 if they don't ignore...that would lead to one thing...a top management revamp...in the end we know Activision only care about the $$

speed45823
speed45823

 @super600 They are too shamed they lost to two guys, so they backed off with tails between their legs

thereal-15-cent
thereal-15-cent

 @MJ12-Conspiracy

 Activision is mainly just a publisher. They rarely actually make games. I don't think they made Goldeneye. EA sucks though, because they're greedy. They're the only publisher/developer I actually try to avoid. It's a shame they got their hands on Bioware.

joju_australia
joju_australia

i was thinking the same when i read this story! ...

ghost688
ghost688

 @mrzero1982pt2 call of duty MW series make a amazing interaction of player with NPCs. i never undertantood this interaction but is true. you can see many sites where they are talking about dead characters and favorites characters, a lot of coments about soap's death and ghost's death. that are one of my arguments to give good words about cal of duty .

inaka_rob
inaka_rob

 @mrzero1982pt2 crackdown is another example that had super high sales because the of the halo beta you got access too. to be fair. Zone of Enders and Crackdown ended up both being fun.

dre256x
dre256x

 @mrzero1982pt2 True, true...

 

Milk a series or not, these companies have investors to answer to and as reflected in the Battlefield series now getting 2 yr installments, you have to "Milk" your most profitable property...

decoy1978
decoy1978

I couldn't have phrased it any better! Blizzard making a very Non-Blizzard game in D3!

 

I played D2 when it first came out 15 or so years ago. Granted its been on/off for the past 15 years, but the game still holds weight. Its simple yet complex gameplay stands the test of time.

 

D3 will have none of that. Unless there is a giant change from their core gaming mechanics, D3 will not have the staying power its predecessor had.

dre256x
dre256x

 @Elann2008 Also, do you understand business?

 

You typically sell a company when its hot not cold or luke warm..

 

Count how much company out there that's into gaming has 10bil to spend on a company (that makes games available on all system)..

 

Sony?....NOT,  Nintendo?... NOT,  Microsoft?.... NOT.. None of them would buy Activision, because Activision makes games for all systems and that's how they get all there huge sales numbers.. If anyone of those companies was to buy them they would lose because more than likely they would want them to make games only for there system, despite selling more systems..

Anigmar
Anigmar

 @dharper7 I don't have a problem with adding variety to the site, the problem is we used to get an article like this once a week or so but now I check the news and it's "analyst predicts", "xxx company CEO predicts"... Maybe the lack of game launches due to bad economy is making them resort to fill up space with these.

 

About the estimates being rarely correct that's bad too, cause they're affecting developers. It's like if the weatherman says "I think it'll rain tomorrow". Next morning you take your umbrella and hey, doesn't rain, no big deal. But you make bad predictions that aren't correct and you can kill a company or at least make their stock holders lose a lot of money which means people losing jobs. That's my problem with analysts throwing predictions like that.

lipehique
lipehique

 @thereal-15-cent I pre-ordered Battlefield, and after the bugs, Origin, Premium, they are simply the worst company I can remember.

mrzero1982pt2
mrzero1982pt2

 @dre256x but look at how many map packs are coming out for battlefield. i own it but not the premium subscription, but it is worth it. you have all of these map packs which actually cater to all play types, (distance, close quarters, vehicles) which points that EA really listens to fans. if you are a fan, get them all, if you like one playtype, just buy the packs you want! plus they have been coming out since what, december 2011 to feb/march 2013? they feel like maps. activision just makes them and says "get em because everyone has em" plus activision has what, 3 map packs and charges you 50 bucks! ITS A DEAL! no. why pay that much for maps which are on another disc? its a joke. i understand they have a board and whatever, but activision should have its own definition in the dictionary

toddx77
toddx77

 @dre256x  @Elann2008 Valve and CD Projekt Red don't have or make the money like Activision or EA but not only do their employees have fun making games but their games are a lot more fun and unique then anything Activision or EA puts out.

Anigmar
Anigmar

 @dharper7 Your exposure makes total sense and I agree totally. I'm quite wary these days by the power of these predictions. As an investor yourself you take these reports with prudence, contrast opinions and make your decisions. What is scary is the people who take these estimations as complete truths, make hasty trades and cause even more inestability. As you say information is good, I just wished they were more careful and also think many times there're particular interests behind them.

 

And thanks a lot for your insight on the MoH, HotS and BLOPsII posible situation. It's great to learn from people with you knowledge.

dharper7
dharper7

 @Anigmar good points...all i want to say is that the state of the industry actually requires the information currently, considering every company is on shaky financial ground. Estimates in all industries, not only gaming, are commonly inexact, but much of these predictions are based on economic models, making them the best ways of predicting future numbers that we have (inefficient, but helpful). As an investor, I understand it is a 'buyer beware' environment, and these analysts are only to be used as guides, not prophets. Incorrect predictions will not kill a company...a company kills a company. Proof is in the balance sheets. Information like MoH estimates being lowered presents implications like higher sales for both Battlefield and BLOPsII, whereas the delay of Starcraft could mean that Blizzard has spent significant resources on the recent Diablo issues, creating possible lowered earnings and leaner margins for Activision going forward. These are the important things to look at when reading these articles. Just take all of it with a grain of salt and form your own opinions. But dont think this reporting is unique and dangerous for the game industry, it is just a relatively new thing for us b/c publicly traded game companies is a somewhat recent occurance. We constantly speculate about everything (especially in the games industry) so semi-accurate, numbers based predictions can only make us more informed.

Soniczero1993
Soniczero1993

 @mrzero1982pt2

 I have a feeling you may be a Battlefield fan. If so, I agree. I liked Battlefield more simply because you aren't forced a certain playstyle. CoD is nothing but infantry battles that make me feel like I'm playing Doom or Doom 2 (which is even worse since those games are favored classics of mine). Military isn't about jumping around shooting everything in the head. It's about taking your time so you don't get your ass lit up, while also being able to kill with concentration.

 

Battlefield allows you to fight on foot, in a tank, on a jeep, in a chopper or even a jet. You can sit on a hill firing missiles at enemy tanks, or sit in a bush and snipe people miles away. It's more varied, and feels like a complete multiplayer experience.