38 at Infinity Ward file lawsuit against Activision over royalties
Group claims $54m is owed; accuses publisher of holding them "hostage" until delivery of MW3
A lawsuit has been filed against Activision by 38 employees of Infinity Ward, both past and present, who claim that the publisher owes them over $54 million in bonus payments.
And according to the suit, Activision has been holding its staff "hostage" since the release of Call of Duty: Modern Warfare 2 by withholding payments due to them until the completion of Modern Warfare 3.
The lawsuit, which was discovered by G4TV, was filed in the Los Angeles Superior Court by 38 employees calling themselves the "Infinity Ward Employee Group".
One of the group's attorneys Bruce Issacs of Wyman & Isaacs LLO explained: "Activision owes my clients approximately $75 million to $125 million dollars. Activision has withheld most of the money to force many of my people to stay, some against their will, so that they would finish the delivery of Modern Warfare 3.
"That is not what they wanted to do. Many of them. My clients are entitled to their money. Activision has no right to withhold their money."
According to the filing, $28 million has been delivered to Infinity Ward workers in bonuses, but at least $54 million is still owed to them from 2009 profits alone.
However, taking into account other considerations - including bonuses due past the first quarter of 2010 and interest rates - the group is looking "to recover between $75 million and $125 million, if not more, in compensatory damages," said Isaacs.
According to the lawsuit Activision has "improperly withheld this specifically identifiable sum of money from the members of IWEG in order to force them to keep working for Activision so that Activision could receive delivery of Modern Warfare 3."
Activision "made a calculated, purposeful and malicious decision" to withhold proper bonuses "in an attempt to force employees of Infinity Ward to continue to work at a job that many of them did not want just so Activision could force them to complete the development, production and delivery of Modern Warfare 3," it continues.
"In short, Activision withheld the property of the IWEG in an attempt to keep the employees hostage so that Activision could reap the benefit of the completion of Modern Warfare 3."
In response to the lawsuit however Activision has issued a brief statement saying that it believes it is within its rights to determine the schedule of bonus payments.
"Activision believes the action is without merit," said a company spokesperson. "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."
Last week an Activision employee wrote on Facebook that the bonuses due to employees of Infinity Ward that have since left the company would be "redistributed to everybody else."
Former Infinity Ward heads Jason West and Vince Zampella have also filed a lawsuit against their former employer, suing them for upwards of £36 million. They alleged that Activision forced employees to produce games at "breakneck pace" under "aggressive schedules" and also claimed bonus payments were being withheld.
"West and Zampella were not eager to extend their employment; especially as they watched their games receive countless awards and make Activision billions of dollars, while many Infinity Ward employees were not being provided a fair share," stated the filing.
Activision has counter-sued the pair, accusing them of attempting to hijack its assets and delaying pre-production of Modern Warfare 3.
While withholding bonuses for work already completed seems utterly abhorrent, I suppose it comes down to what is outlined in each employee's contract, and whether there is such a clause and so on. It's difficult to speculate too wildly without knowing the finer points of the court proceedings.
Anyway, I can't see all this not ending badly. Respawn will probably grow at an extraordinary rate while IW will continue to lose tens of employees. In the long term I think this is a very poor decision for Activision to treat their top studio so badly. They should cultivate creativity, not quell it.
what activison is saying regarding bonuses seems quite dangerous to me. even if they are in their rights to withhold payment of bonuses (and then redistribute allocation of them when people leave), that basically is saying: any bonuses IW employees are due are indeed technically worthless. the system they are touting lets them promise bonuses, but at the same time they basically can avoid paying a single penny, considering that within this system they can just withhold the bonus payments indefinetly, in the knowledge that employees will eventually move on - thus forfeiting their unpaid bonuses.
i honestly don't see how any company can expect to survive for long with that kind of mentality.
We'll find out how water-tight the contracts at Activision are.
Well, it looks like they are seeking $54 million in unpaid bonuses as well as the extra $75 million and more for compensation and damages. I would imagine West & Zampella are not part of this, but if it concerns a bunch of head people from Infinity Ward it's not unreasonable that it could be going into millions for some individuals. Plus, if it's performance-based, that could explain why the figures are so high.
Does this mean 38 people who were involved in the development of MW2 have now left IW? I can't see people still working there participating in this, unless they are able to do so anonymously or it is their intention to not be with the company for much longer.
I imagine that even those who intend to stick with IW will be getting (openly) frustrated by the delay. Rightly so too - it's not their money to keep. It doesn't exactly show faith/respect/loyalty to the employees.
I remember the term 'unbridled greed' from the early days of this story, quite fitting!
Hopefully this will end soon.
There has to be a better business model instead of Publishers buying up studios and studios relinquishing creative control like this.
Obviously I don't see into this whole problem but I feel that IW might be right on this one.
Don't be so sure Terrence. When SI left Eidos for Sega and started Football Manager, Champ Manager sales nose-dived and Sega had an instant hit. It suggests at least some will follow the talent, rather than the brand.
Are you sure about that? CoD:World at War appears to have sold as many copies (if not more) than the original Modern Warfare. Furthermore, it is still the 5th most played game on Xbox live, while the original MW has dropped to 9th.
(see: [link url=http://majornelson.com/archive/2010/04/27/live-activity-for-week-april-19.aspx)
]http://majornelson.com/archive/2010/04/2...[/link]
I would agree with Terrence that the more savvy gamers will recognise the current state of affairs at IW and Activision and steer clear of future releases. However, this would only be a very small percentage of the actual number of people interested in purchasing a new Call of Duty. The same can be applied to the people who protested the lack of dedicated servers, the cost of the Stimulus map pack or even Left 4 Dead 2. In the majority of these situations, the very vocal internet community is but a small, albeit bitter demographic, of the overall consumer base.
Provided the next Call of Duty - be it Modern Warfare 3, Victory in Vietnam, Insurgents in Iraq, whatever - maintains the quality of prior releases (which wouldn't be difficult given they'll be using the same engine) then it will sell like hot cakes. Only after a few more releases when it becomes clear that creativity and ingenuity is dead in the series will it stagnate.
I'd say people want perfect games and with saying what they need, just want to make the game better as they want to make their wishes come true in a form of an update or sequel...etc.
Your last paragraph is the most important thing I'd say. It doesn't matter whether it'll be MW3 or GI Joe warfare 25, gamers will buy the game because every article, the cover and all the videos will say that this game was made by the guys who were Infinity Ward one day. It won't matter whether Activision will publish it or Grandma's Videogames Store. Good story, gameplay, graphics...etc. that's what counts.
Made by the same people who formed Infinity Ward, who then made the Call of Duty Series...
Now that Respawn has been formed as a company, lets see if history repeats itself.
I'm really thrilled to "see if history repeats itself. "
Ow... and if this soap opera continue, we should definitly have a section to "false-bid"/pronostic on the next episode. This could turn out to be very entertaining.
Edited 1 times. Last edit by Aurélien Dussalve on 28th April 2010 6:08pm
Sorry that's a long sentence containing poor grammar and probably poor spelling and fact checking :p sue me.
The point I raise is valid though. EA managed to turn themselves around by increasing profit through innovation while Activision seek to increase profit by stifling it.
http://www.gamesindustry.biz/articles/mi...
It has happened before and happening again. Or not.