HR scandal rocks Activision

Mar 2, 2010

Last night, Activision locked down the Infinity Ward offices after a meeting with studio heads Jason Ward and Vince Zampella, who are now confirmed to have terminated their employment. Since then, more information has come to light on the subject which might clarify the situation somewhat. Of course, we’ll update you as soon as we learn more, but in the meantime here is what it’s looking like.

As we know, an SEC filing from early Monday revealed that Activision was launching an investigation into conduct at Infinity Ward, regarding “breaches of contract” and “insubordination” involving “two senior employees” at the studio. These are serious allegations and are expected to result in a major lawsuit.

It’s rumored that these breaches of contract were that Infinity Ward might have been in discussions with another publisher, to set up a similar publishing agreement akin to the one they have with Activision. As it is, Activision does not wholly own Infinity Ward, but only partially, and that contract expires in October. When that happens, IW is free to do whatever it wants. However, this explains at least in part why Activision has allegedly been looking to sign Modern Warfare 3 over to another developer. However, since Infinity Ward still owns part of the rights to the Call of Duty franchise, this becomes difficult, and sources close to the matter believe the situation is a power play to bully Infinity Ward into staying with Activision or selling out the rights to Call of Duty.

Either way, hanging on to Call of Duty is important to Activision, since according to a report by Kotaku, the franchise along with Guitar Hero and World of Warcraft make up more than two-thirds of the company’s net revenue.

Now the other rumor is that Infinity Ward has yet to receive any royalties for Modern Warfare 2, which has earned over a billion dollars in revenue since its release. It’s unclear whether there was a royalty agreement in place between the two companies, but apparently every source questioned has brought this up.

What does it all mean? Any conclusion would be pure speculation on our part, but the result will be certainly interesting to watch.

Stay tuned for more on this story as it develops.