Former Infinity Ward studio heads Jason West and Vince Zampella recently filed a lawsuit against Activision, following an ugly situation where the duo was let go for alleged "breach of contract" and "insubordination." Wedbush Morgan analyst Michael Pachter has reviewed the legal documents and offered his opinion.
While Pachter admits that he doesn't know what the real outcome will be of the $36 million wrongful termination suit, he does think that West's and Zampella's damage claims have some merit, and he expects to see the "lawsuit progress to trial or settlement, with some compensation likely awarded." He added, "Separately, we think that West’s and Zampella’s claim for creative control over the Call of Duty and Modern Warfare brands has little merit, and we expect Activision to retain control over the brands."
Of course, the real damage to Activision could be coming in the near future, regardless of the outcome of the lawsuit. The departures of West and Zampella could hurt Activision very much if the pair joins EA and recruits other top Infinity Ward talent. And naturally, their contributions to the Call of Duty franchise will be sorely missed.
"The 'secret sauce' of their involvement is analogous to the direction of a movie; some directors work with certain types of material in a unique way, and repeatedly achieve commercial success with that material. In the same way, we think that West and Zampella provide something unique to the creation of games at Infinity Ward, and think it’s likely that their contribution will be missed in future installments," said Pachter.
He added, "We think that West’s and Zampella’s departure could be a serious negative for Activision should the pair choose to work for Electronic Arts. EA has recently revived the Medal of Honor series, placing this year’s installment in the modern warfare realm, and the addition of the former Infinity Ward heads could help EA sell a greater number of copies of this and future installments of Medal of Honor. Perhaps more importantly, we understand that West and Zampella were popular among IW employees, and should they work for an Activision competitor (or even set up shop independently), it is likely that they will aggressively recruit former co-workers to join them. Because of their senior roles at IW, they presumably know which employees are the most talented, and are in a position to compete with Activision going forward. We will monitor their employment status and will update investors as these events unfold in the future."
19 Comments
March 9, 2010
I can't help but smile. This is something a lot of us wanted thanks to Kotick. We all know the Cod that sells best is the one Infinity Ward is behind. I'm not big fans of theirs but it'd be nice if they left activision and knocked them back down to size ego wise. I love how much competition they are getting this Year. I'll most likely be getting Medal of Honror, Ghost Recon Future Solider, Spec Ops The Line and SOCOM 4. Basically every big shooter this year (possibly this year or the ones announced) except COD. When you're a game publisher and you threatened not to provide one of the 1 out of the big 5 platforms/publishers games then you should expect someone will have a problem with it.
March 9, 2010
Damn. Pachter is stealing my language . . . I used the 'secret sauce' analogy elsewhere.
BTW, you cannot 'aggressively recruit former co-workers' since I'm sure that would violate their employee contract with ATVI.
March 10, 2010
Speculawyer makes a very valid point that Pachter's comments dont bring up. While the dispute between Zampella/West and Activision could invalidate it, there is undoubtedly a non-compete agreement in place between Zamp/West and Activision. And poaching talent from Activision actively would also be included in the non-compete. This will be a substantial barrier for EA to violate this by bringing Zamp/West onboard their payroll. However, that would be much easier if they simply bring them onboard through their EA Partners label as an independent dev studio. Regardless, the actions Bobby has taken shows the dev community what you can expect for success under the Activision umbrella. That said, Im sure the Sledgehammer guys can say the same thing about EA from their Dead Space experience.
May 5, 2010
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May 13, 2010
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Overall, we expect a 31% decrease in total hardware units and a 20% decrease in dollar terms, and do not expect hardware sales to climb until the middle part of the year (April – August), when Wii comparisons become easier and supply constraints should relax," Pachter noted. Pandela Hosting Review
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