Infinity Ward could lose 20 more, still make 'competitive product' - Analyst

Wedbush's Michael Pachter thinks 10 to 20 departures from Modern Warfare 2 developer wouldn't affect its long-term ability to produce high-quality games; maintains "outperform" rating on Activision.

Today, Activision stock lost nearly 2 percent of its value, closing the day down $0.23 at $11.67. The slip came even though the company increased its guidance for the quarter, thanks in part to massive sales of the first map pack for Call of Duty: Modern Warfare 2. One theory was that news of recent departures of top talent at the $1 billion game's developer, Infinity Ward, was making some investors skittish.

Ever see the movie They Were Expendable?

Wedbush analyst Michael Pachter concurs with that theory--and thinks even more Modern Warfare 2 makers are headed for the exit. "We think that recent Activision share weakness has been compounded by additional departures at Infinity Ward which accelerated this week, and we expect another 10-20 employees to depart over the next few months," he said in a note sent out today.

However, Pachter believes that Activision will be fine even if more high-level developers at Infinity Ward jump ship. Commenting on the departure of 11 employees over the past month (with two more exiting today), Pachter said that the brain drain won't be damaging in the long term.

"In our view, the company will likely replace the departed employees with skilled developers, and while increased competition may impact sales of future versions of Modern Warfare, we expect the company to put out a competitive product," he summarized.

Pachter is maintaining his high "outperform" rating on Activision, offering a target share price of $16.

Written By

Want the latest news about World of Warcraft?

World of Warcraft

World of Warcraft

Discussion

244 comments
Beawolf
Beawolf

@nevryn read my post carefully i was not arguing that the recession was based off unemployment, but short term profit gain. Which is what you don't seem to comprehend. You think short term and not long term which is the cancer that is affecting our society. Also my analogy was not poor because it points out that you know nothing about the film industry, and more then likely nothing about investing. No investor in their right mind would go with a director that loses talent. It shows that the person or company has poor relations with their employees, and no one wants to work with nor for someone that has poor people skills. Again you can not argue that people are replaceable on the idea/notion that "someone" out there has that same talent if not more then then the previous talent. Yes you will more then likely "finally" find someone to fill in the niche (notice not replace), but how many rotten eggs are you going to go through that will waste your time and money? Replacing vs filling a niche are two completely separate ideas. I suggest you take some anthropology, business communication, and speech. As for attacking my creditability i find it to be a red herring, especially since you do not list your "credentials" and information. But, this is a game forum so i don't really care. In the end though all this argument does is show the dichotomy of irresponsible corporations vs responsible corporations.

nevryn
nevryn

@Beawolf And yet you are once again wrong. ATVI 11.87 +0.18 +1.54%. So... how is that down? As I mentioned before, the temporary down trend was because of the financial performance outlook, it was only coincidence that it happened at the same time as those individuals leaving. And sure they're replaceable. You can easily find creative, intelligent individuals willing to be designers. ESPECIALLY for lead designer positions. There's lots of lower level designers out there who would love the opportunity. Heck, some of the IW lower guys might be very happy to step up. Also, if you think the recession was caused just by companies firing people you're sadly mistaken. The recession is the result of a ton of issues with poor planning and bad loan practices that converged at the same time. The layoffs were actually a result of the recession which just helped to prolong it. Though the working population helped to confirm corporate views some. Companies discovered they could get the same productivity out of fewer workers, simply by holding the fear of unemployment over their head. As a result, the jobs are not returning and unemployment remains high. Your arguments lack evidence or merit. As for your analogy (abet a poor one), if the director had a track record of being able to make the movie well, then yes I would. You would invest in the understanding that the director would find a cast that works, even if it is all unknown actors.

x_hunter00
x_hunter00

funny how mw2 is so successful and is completely destroying all of its competition. yeah even BFBC: 2 is being dominated. Go IW and Activision

XenoLair
XenoLair

Infinity Ward is one strong boss to take down :D

shivLasers
shivLasers

Produce quality games and Activision should NEVER be used in the same sentence.

Beawolf
Beawolf

@nevryn You think short term, and not long term. Which ironically is the failing of most corporations. Does the recession ring a bell? Anyways the replacing of talent costs time and has an adverse affect on your product because again you are taking a risk of what i just stated below toward Elementalis. Also Activision is losing stock, so currently your point is kind of mute and invalid. It's like saying this sandwich WAS awesome before it got moldy. Tell me will you invest in a Director for a film if he keeps losing people?

Beawolf
Beawolf

@Elementalis No people are still not replaceable, and the regurgitation of the same game is not as much Ifinitywards practice, as it is Activisions practice that they are more known for. One of the disputes that happened between the co-founders of IW and Activision was the fact that IW wanted to do a different game whereas Activision wanted to milk the IP. Again people are not replaceable especially when it's 20+ (from a studio of about 100) of the lead talent that created the original cash cow. With Activision losing more people (which they are) they are going to lose time and talent. Anytime you hire it's a risk because you are betting that this person is talented and a good worker which they may not be. Which again plays into not only time, but also your product. With a whole group of people leaving an ip you have multiple roles to fill, and thus take a risk on the whole project. You have to hire the right crew for the right ip, and even then it is not a guarantee that these "replacements" will do the job to satisfactory level. Respawn on the other hand is more then likely going to get the people that are leaving Activision which means they will have a solid base of recognized and functional talent. Nevryn and you are both very wrong.

Swedish_Chef
Swedish_Chef

@the guy saying the CoD series revolutionized FPS games... LOL! Get real, they've done 1 thing well and that's incorporate realistic military equipment (though it's not at all used realistically). But as for the basics of the shooter genre they've done nothing to improve it, and on the PC they even took a step back from previous generations.

banana5
banana5

i just want a multiplayer that is as good or better than MW2 and i wana see what happens to soap in mw3. MINI UZI FO LIFE

GravityDs
GravityDs

hmm, screw these guys. And CoD:MW2 was totally overrated, and a ripoff at $60. If I want an FPS or RPG/FPS im going to stick with Half-Life 2 and the Mass Effect Games. Treyarch makes terrible CoD games in my opinion, and now that I think about it, Call of Duty 2 was probably the best of them all, I could care less about multiplayer, the campaign was amazing.

-Elementalist
-Elementalist

@Beawolf - You say people aren't replaceable, but you also say they're regurgitating the same project. Isn't an obvious fix to replace people to make a new product? Nevryn is correct, as much as people may vote them down.

guichan
guichan

I dont know I even think that make a new COD would be doing the same one more time but many people real love it so its better to do something over their expectations even without many old employers

ThAdEa82
ThAdEa82

Why would an outperform rating still be maintained if half of their company disappeared? I guess its Treyarch from now on? At least they still have WoW

Ugly_Geezer
Ugly_Geezer

@jokethis21 I'm loving the irony of your name.

towely62
towely62

-_- still release high end games when most of that department is gone, whats this guy smoking? lmao

-Geo
-Geo

@Jokethis21 Are you retarded? He was obviously being sarcastic,you freakin Neanderthal.

nevryn
nevryn

@ Beawolf Your argument could have merit except evidence points to the contrary. A-B's stock actually skyrocketed when the first 2 guys left and when they did the lawsuit. It continued going up when 3 more left. With this last one it went down, but that was just a coincidence because at the same time was the report about earning. I've been watching ERTS, TTWO, and ATVI for the last several years now. What happens with their stocks only follows earnings and predicted outlooks. Heck, when CoD:MW2 actually started reporting success, ATVI actually went down some. Big investors just plain don't care about the nuances of a particular game or person, unless it's the CEO. Now Kotick has managed to successfully bring the stock price down several times cause he can't keep his mouth shut, but they don't care about IW employees. As for people not being replaceable, in a corporate model sure they are. Everyone is, why do you think companies tend to layoff older more expensive employees and hire cheaper younger ones? Don't like it? Go live in the forest, because that is how the corporate world works now. When you start thinking of yourself as irreplaceable is when you get fired. As I mentioned, it WILL slow them down, because any new team A-B makes will have to get used to each other. But it will bounce back eventually. Heck maybe with fresh minds it will be different enough now to not just be a clone of past versions.

meke186
meke186

might as well rename it. there are no original employees. now all the games are going to suck oh well. thats what activision gets by laying off the best designers and producers, a botched up game company that no one will care about anymore

karloss01
karloss01

Good night, sweet prince. Infinity Ward 2002 - 2010

akiwak
akiwak

Yeah get ready for the next CoD, just your average shooter!!! Woo-Hoo, I'm so pumped!!!!! *sarcasm*

jokethis21
jokethis21

And quite frankly, I dont care for Infinity Ward, but I think Treyarch is the most underrated game company out there. I love their games, and really CANNOT wait until their next game. WWW.GKNOVA6.COM... Mysterious, but thats why I love treyarch.

jokethis21
jokethis21

[This message was deleted at the request of the original poster]

Chaos_Eagle
Chaos_Eagle

Who cares? It's still just going to be COD. If you're that bothered, go back to COD4. It's much better than MW2 IMO. IW won't be IW anymore in a few months then. May aswell rename it if you're planning a change as drastic as that.

Kan0nF0dder
Kan0nF0dder

Nothing against IW, but it's so easy to hate Activision

Ugly_Geezer
Ugly_Geezer

The CoD games are some the worst RPG games ever. Just because they put naked ladies in with guns, doesn't mean they're any good. I think everyone should calm down a bit and listen to the 'experts' like me :D

YoJim8obaJoe
YoJim8obaJoe

lol at pachters denial,"Yeah we lost all the people that made cod a average at best game but we'll still be able to make games just as average if not more so"

SgtStrungOut
SgtStrungOut

And why does Gamespot put pointless news like this on a gaming site? Sales have nothing to do with the quality of a game. I'm a gamer, not a sales rep. Get outta here you casual gaming fake gamers.

quinnd6
quinnd6

Bobby Kotick is replaceable.

Blastalot5
Blastalot5

I've observed over the last few days that only about 3% of those playing MW2 online are in the rooms for the new map pack. That seemingly leaves a good chunk of players--like myself--who passed on the Stiumulus package

thphaca
thphaca

They've already oversaturated the COD series (I'm not sure if MW2 is COD6 officially or not, but socially it is). I have a feeling that IW will just start a new series and I wouldn't be against it. There's nothing wrong with a little change here and there. MW2 is just MW on steriods; the sequals never rack up to the originals. What could MW3 really put on the table? More guns, X-ray vision and mechanical war machines?

Snicker-Man
Snicker-Man

losing more people s..t i would leave too the way its going they so are losing company and people from buying there games

eht
eht

they can go under for all i care.. i did not buy the last 3 cod games- the sp game is short over in 10 minutes- and well- mp is nothing but hack cheaters from day 1 anyway.. its a few more id like to see go under like 2k and gsc and bethesda- for putting out buggy glitchy games and poor patches- and or- do not understand- pc gamers are not console gamers- i mean the fools cant even put what version patches you are running in game in the gui or in a read me.. and patches do not say this patch will update any version of a game or you need to install all before patches first.. its like games or windows was created yesterday with a lot of these companies.. every program on our computers has a version listed- well unless you have some of these games installed that is.. and anything with gfwl on the box- well you are just asking for problems- i avoid anything with gfwl on the box period..

Beawolf
Beawolf

@nevryn People are not replaceable. Even with your thinking the game will not be the same and the new competition "Respawn" will more then likely threaten there position because you are looking at a collective of people that have worked for so long together that they are now a well oiled machine with the backing of EA who is Activision's rival. They are going to have to play catch up to create another group of people that made Infinityward and that takes time. Granted they got other products going, but they are losing the fps genre that EA is now acquiring by proxy. Also regurgitation of the same product can only last for so long. o_O Also you have to keep in mind the lawsuit going on. Investors are smart people. They like to make there money grow, and if a company looks like it's going the wrong way you better believe an investor will be the first to bail out and go with a different company.

wahyudil
wahyudil

Yup ... as long as Activision Blizzard products don't have equals (just say COD, WOW, starcraft, Diablo, Guitar Hero), they will never down ... can fanboys resist to buy these products .... never ...

ScaredySquirrel
ScaredySquirrel

The people who were the decision makers of the Modern Warfare series are out the door, unfortunatley for Activision it's not like replacing office supplies at all. The major creative forces that steered the development of the game are now gone. Who knows what 3rd Modern Warfare under a very new Infinity Ward will turn out?

nevryn
nevryn

I think Pachter makes a good point. In a corporate business model, individual people are replaceable, just like staples and printer paper. Loss of major talent may slow things, but guess what, there are 100s if not 1000s of equally talents designers just chomping at the bit to get a chance to prove themselves. Especially in our economy with designers and programmers being laid off daily. Sure, there are a handful of die hard loyalists who follow the IW people, and ya they won't buy anymore CoD games. Truly, I applaud those willing to stand up for what they believe in. But let's be honest, what's a couple thousand (at most), compared to the multiple millions sold. Most people never heard of these designers, heck most don't even know wtf Infinity Ward is. They buy the game because they liked the previous CoD, and so buy a new one. Face it folks, no matter how much we'd like to think differently, in today's corporate world employees are replaceable, no matter who they are.

thwart
thwart

The Battlefield series is where it's at now-a-days anyway. With destructible environments and real squad based gameplay, the Battlefield games deserve be at the top of it's genre.

pete_merlin
pete_merlin

I have no intension of buying any more cod games. And that isn't only because of all the bad things that have happened lately at Activision. Im just bored of FPS games in general.

doomzug
doomzug

WOW, just wow i'll never buy another COD game this is just stupid the whole thing prolly could of been avoided if activison wouldn't of messed things up.

dsa0224
dsa0224

all this IW/ activision drama just reveals to the rest of the society the darker aspects of the video game industry. Kotick in his mind said "OH WOW LOOK AT THE MILLIONS I MADE IN JUST 3 MONTHS..LET ME KEEP ALL OF IT"... thats just greed at its best. Im done with MW2 knowing it is the last time i play a COD game.

wexorian
wexorian

sweet good job Kotick ruined Day for COD again :

Xtatic324
Xtatic324

Its Over for the Call Of Duty series... OVER!

Digital_DJ_00
Digital_DJ_00

-Activision to Infinity Ward- "You're not a money hoarder like us you say? You're fired!!!"

severe_009
severe_009

Pachter again>? Is he that credible?

chansaet
chansaet

Looks like the same thing that happened to MOH series will happen to the COD series. Hopefully the 3rd time is the charm and these guys don't get screwed anymore but these huge companies.

Shardz7
Shardz7

But...you are missing the point here! We are avid gamers with loyalties in place. Just because Activision decides to milk this franchise for all it's worth doesn't mean we will all follow after seeing how they treat their developers. Believe it or not, a lot of gamers actually have brains and some will even refuse to buy their refried rehashes...especially with the dramatic idiocy we have been seeing from the Kotex Krew. Keep being optimistic Activision, but I'm not buying it.

SkyrimNorth
SkyrimNorth

Yeah, right. Assuming they want to work for Infinity Ward after all this.