NEWS - Thursday, May 17, 2012

Activision CEO under fire again

More than two years after Infinity Ward founders Jason West and Vince Zampella first sued Activision, their case is finally set to head to trial on May 29. But before the case can be heard, documents have been released which shed light on some unsavory moves Activision made prior to firing West and Zampella in March 2010.
Prior to the start of the case, there have been some developments of note. Electronic Arts, the publisher of the game being produced by West and Zampella’s new studio, Respawn Entertainment, was added in late 2010 as a defendant in Activision’s counter-suit; Activision alleged EA conspired with the former IW heads to derail the Call of Duty franchise, among other things. Bloomberg reported yesterday the two publishers have reached a settlement, details of which were not made available.
In addition to West and Zampella’s lawsuit against Activision, a group of Infinity Ward employees -- many of whom left the Modern Warfare developer and were hired by Respawn -- sued the publisher over unpaid royalties, with the Infinity Ward Employee Group’s lawyer estimating these royalties to be in the neighborhood of $75 to $125 million (not counting punitive damages). Polygon reported earlier this week that Activision paid the former developers $42 million, the amount it determined was owed during the discovery phase. This was not as part of a settlement; the group’s attorney, Bruce Isaacs, confirmed the payment was made on Monday but described it as a "cynical attempt to look good before the jury trial," noting it is only a fraction of the amount being sought.
Where this all becomes particularly juicy is in a recent court filing in the case between West/Zampella and Activision. Public relations reps for the duo’s attorneys sent the filing to Giant Bomb, no doubt hoping the information would be distributed and make Activision look bad. This is only one part of the court filings that have been made, so they fail to paint a complete picture, although they certainly do Activision no favors.
Project Icebreaker, despite the seemingly silly name, was the name used for an investigation launched by Activision management in order to discover something -- anything -- which could be used as grounds to fire West and Zampella. Former Activision director of information technology, Thomas Fenady, testified he was told to "dig up dirt on Jason and Vince" because "we’re sick of dealing with these guys, their ego ... we just want to get rid of them." This directive came from George Rose, who then served as Activision’s Chief Legal Officer and assured Fenady, "[Activision CEO] Bobby [Kotick] will take care of you. This comes from Bobby directly ... Don’t worry about repercussions."
Fenady found himself unable to access the desired information himself, at one point turning to third parties like Microsoft and InGuardians, a security consultancy company, for help. Both refused to assist, leading to Fenady requesting Activision’s Facilities Department help in "gaining covert physical access to Infinity Ward." As if that doesn’t sound incredible enough, Rose is said to have approved of discussions where ideas such as "staging a fake ’fumigation’ and a ’mock fire drill’" were conceived in order "to get Jason and Vince away from their computers long enough to image their contents." To Fenady’s knowledge, none of these plans were ever actually carried out.
The purpose of this filing is to show both why Fenady’s deposition should not be treated as privileged information (because he was speaking with a lawyer in Rose, Activision wants the evidence excluded) and that Activision had plans to fire West and Zampella well in advance of Modern Warfare 2 (pictured above)’s release, and months prior to them ever having contact with Electronic Arts.
Aside from making for some fascinating reading material and potentially hurting its court case, the Project Icebreaker business could have a negative impact on Activision going forward. As I mentioned, there is undoubtedly more to come from both sides as the case goes to trial, and it may be shown that the duo’s firing was justified and they are not owed a thing. But as far as Activision’s reputation among developers, the damage may have already been done.
Even prior to this filing being made public, there were a number of things which did not make Activision look good. The heads of a studio responsible for creating the biggest franchise in the industry today were fired, and dozens of their former employees left in the wake of this move in addition to filing a lawsuit. Double Fine head Tim Schafer once famously called Bobby Kotick "a total prick" (before framing the comments as an accident), this coming two years after Kotick and Activision had decided to pass on publishing Double Fine’s Brutal Legend following the Activision and Vivendi merger. There would have been nothing wrong with Activision passing on the game (and others, like Ghostbusters), save for the later-cited reasoning of the games lacking the potential to be "exploited" on an annual basis across all platforms, except it then chose to sue over the game’s rights when EA decided to publish it.
Activision did sign Bungie to a ten-year exclusive deal to publish the new franchise it has in the works, but that was announced just as the Infinity Ward business began to take place -- it was before we heard allegations of unpaid bonuses and a "police state-like atmosphere."
None of this makes Activision come across as particularly endearing, and that could prove to be costly if and when developers in the future look back at all of this and decide they’d rather do business with another publisher. There will undoubtedly be those who decide to look past all of it and focus on Activision’s ability to support massively successful franchises, of which two of the past decade’s biggest (Call of Duty and Guitar Hero) came from Activision. The company’s focus on a smaller number of titles, each with the potential to be much larger than your average title, may help to spare it from suffering as a result of the reputation it has garnered. However, one has to wonder if failing to settle this West/Zampella lawsuit, and thereby preventing Project Icebreaker from ever becoming public knowledge, could have been the right long-term move.



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