Call of Duty: Modern Warfare 3 (Activision)
Game publisher Activision and the founders of Call of Duty developer Infinity Ward, Jason West and Vince Zampella, have settled their legal differences at the very last minute. The case was expected to go to trial tomorrow.
Terms of the settlement are confidential, but reading between the lines, it looks like Activision might have paid a handsome sum.
"[Activision] does not believe that the incremental one-time charges related to the settlement will result in a material impact on its GAAP or non-GAAP earnings per share outlook for the current quarter or the calendar year, due to stronger-than-expected operating performance in the current quarter," the publisher said in a statement.
Take out the accounting speak and it means if Activision wasn't having a better-than-expected quarter, the settlement could have dinged its earnings.
West and Zampella, creators of the Call of Duty franchise, were abruptly fired in March 2010. Activision accused the pair of "insubordination," at the time. The duo soon filed a lawsuit against Activision for breach of contract.
Settlement talks were said to be underway, with a deadline of 1:30pm PT today to reach an agreement.
While the trial won't move forward, exposing either side to potential embarrassment, there were still plenty of skeletons pulled out of closets in the ramp up to the court fight.
Several emails, published as supporting documents in the trial, showed Activision's frustration with the developers. West and Zampella accused the company of trying to hack into their work email to find an excuse to dismiss them.
The settlement comes just weeks after Activision and Electronic Arts settled their legal differences tied to West and Zampella. (The companies issued a joint statement that they had "agreed to put this matter behind them.") Analysts say they expect little, if any, cash exchanged hands in that settlement.
Despite the resolution, EA couldn't resist weighing in on today's settlement.
"Activision's refusal to pay their talent and attempt to blame EA were absurd," EA said in a statement to the LA Times. "This settlement is a vindication of Vince and Jason, and the right of creative artists to collect the rewards due for their hard work."
Activision also recently paid $42 million to former Infinity Ward employees it determined were not at fault in the dispute.
The fight even dragged in other industry players, as Bungie's contract with Activision was exposed, giving many pertinent details about its upcoming franchise along with expected launch dates for Microsoft's new console system.
- Company Legal & Law Matters
- Jason West