Infinity Ward employees sue Activision for $150 million-$625 million

Group of 38 developers allege publisher withheld $75 million-$125 million in royalties, bonuses, and stock options related to Modern Warfare 2 sales and technology during Q1 2010; massive punitive payout also sought; Activision says case "without merit."

by

Following Activision's dismissal of Infinity Ward founders Jason West and Vince Zampella in March, the two executives responded with a $36 million lawsuit. Weeks later, Activision responded in kind, filing a countersuit accusing the two developers of being "self-serving schemers" trying to set up a new studio with the help of an unnamed Northern California publisher.

This is going to get ugly…

Now, two weeks after West and Zampella announced the formation of independent studio Respawn Entertainment with seed money from Electronic Arts, a third lawsuit has been filed by members of the Infinity Ward rank-and-file. The legal action, which has been obtained by GameSpot, shows 38 members of the Call of Duty: Modern Warfare 2 team are now suing Activision, accusing the publisher of "breach of contract," "breach of the implied covenant of good faith and fair dealing," "unjust enrichment," and "violation of the California labor code."

Specifically, the 38 current and former Infinity Ward staffers are claiming the publisher only paid out $28 million of a $118 million bonus pool it had accumulated during the fourth quarter of last year. Excluding the share of that pool that was to be paid West and Zampella, the suit says the employees are entitled to at least $82 million. It also claims that Activision has withheld $40 million to $55 million in fourth-quarter Modern Warfare 2 royalties it was due to pay out to ensure delivery of Call of Duty: Modern Warfare 3.

As of January 13, Modern Warfare 2 had grossed over $1.1 billion worldwide and is on record as being the biggest entertainment launch in history. The suit contends that Activision made a profit of at least $900 million off the game by the end of last year.

Overall, the group of 38 wants $75 million to $125 million in compensatory damages for unpaid royalties, bonuses, stock options, and technology-related payments it claims Activision withheld. It is also seeking punitive damages of between $75 million and $500 million as a result of Activision's withholding of the bonuses, which the suit says was tantamount to holding "employees hostage so that Activision could reap the benefit of the completion of Modern Warfare 3."

However, the legal filing contends that the publisher violated California state labor law by not paying out bonuses and any other owed monies within 72 hours of the termination of their employment. Since West and Zampella's dismissal, at least 26 Infinity Ward staffers have left the Encino, California-based studio. Among the employees named in the suit who have since jumped ship to Respawn are lead designer Todd Alderman, lead software engineer Francesco Gigliotti, lead environment artist Chris Cherubini, lead animator John Paul Messerly, lead animator Mark Grigsby, senior software engineer Chris Lambert, senior level designer Jason McCord, senior artist Ryan Lastimosa, and game designer Brent McLeod.

Representatives of an external PR company employed by Activision quickly rebutted the allegations in the new lawsuit. "Activision believes the action is without merit," said the rep. "Activision retains the discretion to determine the amount and the schedule of bonus payments for MW2 and has acted consistent with its rights and the law at all times. We look forward to getting judicial confirmation that our position is right."

Discussion

496 comments
hitboy806
hitboy806

I wouldn't mind infinity ward just doing the next game without activision. If only they didn't have the rights to this. Vive la revolution

DekaRyan46
DekaRyan46

@conkerratchet They Need Money To Make The Games Dufus.

andr31coco
andr31coco

I can bet whatever you want that the next CoD is MW3, Activision knows it will be the most profitable decision, even with a half-cut IW studio. How the hell is going to play an action-adventure anyway?

jm3811
jm3811

Will there be a team death match mode: Infinity v Activision in the next COD?

conkerratchet
conkerratchet

Aahh...come on...when are people going to STOP whining about money and actually make games??

Zeus
Zeus

Given it's Activision, nothing surprises me...

RabidBurp
RabidBurp

The bigger they are, the harder they fall.....

borne_god
borne_god

Come on Activision show some class... U guys got a 1.1billion profit n u dnt wanna give bonuses to the ppl who made the game, dat is if those guys saying truth... Whatevr COD is the best FPS series!!

Dragonknight0
Dragonknight0

weird heir sueing each other for what now?!!! because i am stilll confused~!

endocrine
endocrine

@No_Intelligence Most high paying bonuses, like the ones in sports and huge brands like CoD, are in the contract. Activision is not paying them because they say the IW people breached their contract (atleast West and Zampella). Activision will lose, but what is $75ish million to them when they made almost a billion off of MW2?

eriktkire
eriktkire

little missing typo... I meant "regular greed" in the last post... and maybe we're not getting as shafted as the devs in theory, but in the long run we will be. We'll have to suffer through more and more housewife friendly World of Warcraft styled "game" design

eriktkire
eriktkire

cerberus1058 the difference I mean is that greed tends to be personal, and this doesn't sound personal, it's more like a cultural trend in the corporate end of gaming... something the game world managed to avoid for a pretty decent amount of time (to this scale anyways). Now it's rampant and even expected to see major publishers screwing developers. It's a very sad state of affairs, and we, the gamers that are still paying for games, end up being screwed about as much as the shafted devs.

Ubersin
Ubersin

And you know Activision, they most certainly WONT if they dont HAVE to.

VexedLucifer
VexedLucifer

Is anyone going to buy MW3? Not to mention West and Zampella are suing for the IP too. Activision might lose it. D: Then we'll have EA back on top of the gaming world. Ironic really.

No_Intelligence
No_Intelligence

I am an animator myself, and if I knew that I didn't get paid my bonus I'd be pissed off, especially in the millions? I'd be really pissed off. However, that's why they call it a bonus, the boss/owners pays you like they see fit. Activision doesn't have to pay you anything unless it is in the contract.

cel5042
cel5042

There's a difference between being greedy and trying to get paid the agreed amount for the work you've done

RavenXavier
RavenXavier

I remember the days...way back when...you know the stone age we now call the late 80's and early 90's. Back then Game Developers made games because....they Loved Making Games!!!! *gasp* What a shock right?!?!?! Now it's de-evolved into a money making industry and they only do it to make more money and NOT to put out quality games.

jwzy13
jwzy13

this makes me smile

cerberus1058
cerberus1058

@eriktkire What's the difference between his point and yours? It's all greed any way you look at it. The more you get, the more you want and then you become a slave.

monktheking
monktheking

I honestly could care less about this situation. I work in corporate finance and see greedy executives getting over on a daily basis. Big deal, life goes on. Just give me my damn games...

Badges
Badges

What.? They haven't moved all the programing to chinese sweatshops yet? How can they make ROI on real wages? The legal support people will make the real money here. Sad to say but, justice isn't meted out by the best decision, just by the best represented. Whats even more interesting is that so many old time clan server based players felt betrayed by this game. Personally though, its a lot better than bad company :P clunk city badges? I dont need no stinking badges!

Jorlen
Jorlen

These are some big law suits. Hopefully justice will be served, if the allegations against Activision are true, then the publisher is really as evil as everyone claims them to be. What a mess...

Cybrian
Cybrian

I thought censorship would be the greatest hurdle facing the development of video games...turns out it was regular ole' greed. Hold on...why am I even surprised?

eriktkire
eriktkire

This doesn't sound like mere money hoarding. This sounds like faceless corporate greed aimed at screwing everyone on the way further up the ladder simply out of habit. Just goes to show how serious the infestation of spineless executives has become in this industry ever since gaming became part of acceptable mainstream culture. Activision's next step will probably be to whore out the Call of Duty logo to a film studio, putting it in the hands of incompetent filmmakers and making everyone squirm at their "nurturing" of a franchise.

hoz786
hoz786

You ask yourself why do people who are already rich go out hoard money like they've never seen it before thru scams etc. Its cuz when your rich and the love of money comes in your heart then your fu**** lol, cuz you wont give a sh** about having the fittest bird as your wife or having the best mansion all you'll care about is how to get more! For example we are gamers, so we have a liking or some of us love for gaming, so this is something we want to carry on doing the rest of our lives, thats what rich people are like they want more and more money so willing to do anything for it! well basically its just what you love, some rich people are not like that they dont like to hoard money, they are well off and they give to charities etc now thats the rich people i like!

MrGingerG
MrGingerG

@ awesome it sounds like it would be like South Parks version of Tiger Woods PGA Tour 2010! lol

awesome
awesome

This game sounds like fun! What i want to know is when is it coming out?

Glade_Gnarr
Glade_Gnarr

Is Activision finally going down so it can remember what this industry truly is about, or will infinity ward get crushed and be doomed to oblivion? This sounds fun.

Qiynah
Qiynah

@dominicobaggio Did you even read the article? This isn't 'a computer game?!?!?'... it's THE highest-grossing game evar, 'the biggest entertainment launch in history'. Activision made 900 million just for selling it, and are denying 2 million each average to the people who created it. If you want to draw a fair comparison to doctors, remember that this is the wtf king of commercial success in video games, so consider only the doctors who perform the most complex and demanding surgeries -- those bros are making millions.

nocause
nocause

Just give the whole IW team(past and present) all the money they ask for activision. Don't worry Bob Kotick, you'll make back that money by just milking present and future franchises for everything they got. Do not even call guitar hero a franchise though, its a damn epidemic.

Dominicobaggio
Dominicobaggio

2 million each average for making a computer game?!?!?!? Ouch and doctors and surgeons come out with thousands. The world is fubar...

Chickan_117
Chickan_117

Wait for the new MW2 DLC that has new SP levels with Zamp and West as the terrorist bosses :)

Barighm
Barighm

Nice. By going with the "not paying bonuses within 72 hours of unemployment" they now got Activision in trouble with the state! West and Zamp may lose out, but the rest of them were smart by terminating their own employment. Activision is definitely on the wrong side of this one.

khariss
khariss

lol i used to think ea where the masters of evil i was clearly wrong

melty3219
melty3219

IW shouldn't get their bonuses untill they fix all the bugs in MW2!

DomaineStickem
DomaineStickem

its always about money, i mean activision is a pretty big company without COD, why do they have to scheme and hoard money.... YOUR ALREADY RICH!!! (theres no need).... to me it seems like Jason West and Vince Zampella started a law suit epidemic, everybody's gonna retire early and activision is gonna go bankrupt =) =) =)

blancobo
blancobo

The funny thing about Activision's argument that the law suit is groundless, is that the people suing are actually those that have not left... those that were fired are also suing and those that have left in the last days are here in suing as well. In the end... Activision MAY say whatever they want... they have an "entire" dev studio suing them. Regardless of what Activision says... So many people suing Activision is actually about unfair, mediocre muscle arrogant business practices or perhaps massive delusion from IW. Activision's arrogance started when they stated that the PS2 had to drop price for them to support it... even after the system was still selling competitively... Kotick followed last year with his belief on proper management of a dev studio.... and now well FINALLY, the crap hit the fan and it is all over the place. The Colossus WILL fall on the PITFALL

Bytor60150
Bytor60150

Weather West and Zampella win or lose, or IW comes out on top with this new suit, in the end it just shows to the rest of the development/publishing community in the games industry that Activision may not be as trust worthy a partner in the future, regardless of the outcomes.

drokmore
drokmore

Man why did Blizzard ever attach itself to Activision. Just keep hearing terrible stuff ever since.

anotherone10
anotherone10

If every enemy you had to shoot in MW2 was bob kotick, then the game would have got a 10/10 for sure.

XxChicagoTedXx
XxChicagoTedXx

lol @shroom_head42 dude i have grown up since the 8 bit days and I still hate MW2. That doesn'y mean I hate IW though. The reason it wasn't that good was because of Activision. IW didn't even want to do another MW. Activision would barely let IW change anything about the game, causing it to be almost exactly the same as the first, with different maps and killstreaks/titles/emblems. MW2 wasn't that big of a leap.

thenephariouson
thenephariouson

wow, that'll leave a rather large hole in the wallet.

shroom_head420
shroom_head420

You can really see the generational differences in gamers tastes, growin up with NES 8-bit graphics, there is no way I could ever dislike a game like COD:MW2, thats too the ppl who say COD sucks, guess you didn't enjoy the evolutions that gaming has taken, I'm always pleased with advances that games takes every 10yrs or so....thats about when the biggest leaps happen...I know PC gamers will dissagree...I'm a console gamer, so that is what I'm refering to...but on that note, I'm just here to give support to the team that brought this great game out.....

shroom_head420
shroom_head420

HAHAHA, on Activision, if it was a couple of key ppl doin the lawsuit, it would probably be a crapshoot, but the whole development team, damn I'll be applauding the talented team the day the have their victory in court..