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05 March 2010

Call of Duty creators sue Activision for $40m - 5th March 2010

Activision Blizzard was sued by the executives who created the Call of Duty video game franchise over claims the company used “false” insubordination charges to fire them and avoid paying royalties.

Jason West and Vince Zampella, who co-founded Activision's Infinity Ward studio, sued the company in Los Angeles Superior Court yesterday, claiming breach of contract and wrongful termination. They seek at least $US36 million ($40 million) and control over Modern Warfare, a subset of the “Call of Duty” combat games, according to a copy of the complaint.

Activision, the world's largest video-game publisher, conducted a “pretextual” investigation to fire the Infinity Ward co-heads and avoid making a royalty payment due on March 31, according to the complaint.

“Activision terminated their employment weeks before they were to be paid substantial royalty payments as part of their existing contracts for Modern Warfare 2,” West and Zampella's lawyers at O'Melveny & Myers LLP wrote in a statement.

Maryanne Lataif, a spokeswoman for Santa Monica, California-based Activision Blizzard, called the complaint “meritless.” She said Activision owns the Call of Duty franchise and will continue making new versions.

“Activision shareholders provided these executives with the capital they needed to start Infinity Ward, as well as the financial support, resources and creative independence that helped them flourish and achieve enormous professional success and personal wealth,” Lataif said in an emailed statement.

Call of Duty unit

Activision said in a March 1 regulatory filing that two senior executives who led Modern Warfare were leaving and said it was investigating insubordination and breach of contract.

The company said on March 2 that it formed a new unit to run the Call of Duty franchise, naming Philip Earl to lead the unit.

West and Zampella oversaw creation of the World War II video-game Call of Duty and Modern Warfare sequels set in later periods. “Call of Duty” titles have generated about $US3 billion in revenue, Activision said in its 2009 annual filing.

Activision's top three titles, Call of Duty, Guitar Hero and World of Warcraft, accounted for 68 per cent of Activision Blizzard's $US4.3 billion in revenue last year, it said in the filing.

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