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Activision rating unaffected by Infinity Ward issue

Doug Creutz underlines "relatively favourable" timing for ejection of studio leadership

Following earlier reports that Infinity Ward management duo Jason West and Vince Zampella were forcibly removed from the studio's premises by order of owner Activision, Cowen and Company analyst Doug Creutz has issued a note to investors playing down the significance to the publisher and knock-on effects for the Call of Duty franchise.

A 10-K filing by the publisher cited breaches of contract and insubordination by the pair - chief technology officer and chief creative officer respectively - with Ward subsequently indicating via social networks that he was no longer employed by the company.

It is not clear what impact the apparent departure of Zampella and West will have on the creative abilities of Infinity Ward or the Call of Duty franchise," wrote Creutz. "We believe that Infinity Ward is Activision's second most important studio, behind only the best-in-class Blizzard."

He went on to note that Activision Blizzard isn't expecting any material impact on financial results from the incident, mainly because the next iteration in the franchise is being created by Treyarch - while rumour persists that a third studio has also been brought on board to produce titles for the series.

"We are concerned about the potential for a talent exodus from Infinity Ward in the wake of what appears to be a messy situation," he continued. "We note that Infinity Ward was founded by a group of developers who had originally worked at Electronic Arts on the successful Medal of Honor franchise. Medal of Honor's sales declined significantly after the exit of the Infinity Ward talent and the franchise slipped into irrelevance.

"On the other hand, the timing of this issue is relatively favourable for Activision Blizzard; Infinity Ward was not due to release another game for at least two years, and potentially longer, so the company has time to repair any damage from the situation, bring in new leadership at Infinity Ward, and resume the process of game development.

"We note that although Zampella and West are certainly key personnel, Infinity Ward's ability to produce highly-rated, commercially successful games is a result of the contributions of all of its employees."

He finished his note by indicating his belief that the publisher's shares were an attractive proposition, and that the company would outperform the market by at least 25 per cent in the next 12 months.

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