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Modern Warfare 2 creators drop legal tactical nuke on Activision

16 Years Ago happygeek 4 Tallied Votes 389 Views Share

You might be forgiven for thinking that Activision would be more than just a little pleased with game developers Infinity Ward which is responsible for the Call of Duty franchise, and which Activision acquired back in 2003. Forgiven, but wrong.

Modern Warfare 2 is more than a game, it's the most successful and profitable video game ever sold. Since hitting the shelves in November 2009, Modern Warfare 2 has sold more than 15 million copies and earned owners an amazing $3 billion is sales. yes, you read that right, $3 billion! It makes that $41,000 NES game look positively cheap.

In what has been an incredible week for the gaming business, Infinity Ward President Jason West and CEO Vince Zampella were apparently dismissed on Monday by Activision following an investigation into what the company referred to in a as "breaches of contract and insubordination by two senior employees at Infinity Ward".

Yes, you heard that right, the men running the development company responsible for the most successful video game ever have been sacked.

It now looks like the duo might have gotten themselves a killstreak 25 and unlocked a tactical nuke on Activision's ass with the news that West and Zampella are filing a legal suit for both compensation and the return of their contractual rights to the Call of Duty Modern Warfare franchise. The suit includes claims for breach of contract, breach of the implied covenant of good faith and fair dealing, wrong termination in violation of public policy, and declaratory relief.

According to O'Melveny & Myers LLP acting for the pair, a lawsuit has been filed in Los Angeles County Superior Court against Activision Publishing. It says that Activision terminated their employment weeks before they were to be paid substantial royalty payments as part of their existing contracts for Modern Warfare 2.

"Activision has refused to honor the terms of its agreements and is intentionally flouting the fundamental public policy of this State (California) that employers must pay their employees what they have rightfully earned" said their attorney Robert Schwartz, adding "instead of thanking, lauding, or just plain paying Jason and Vince for giving Activision the most successful entertainment product ever offered to the public, last month Activision hired lawyers to conduct a pretextual 'investigation' into unstated and unsubstantiated charges of 'insubordination' and 'breach of fiduciary duty,' which then became the grounds for their termination on Monday, March 1st".

"We were shocked by Activision's decision to terminate our contract" said West, "we poured our heart and soul into that company, building not only a world class development studio, but assembling a team we've been proud to work with for nearly a decade. We think the work we've done speaks for itself".

Zampella added "after all we have given to Activision, we shouldn't have to sue to get paid".

gaming legal
About the Author
Member Avatar for happygeek
happygeek 2,411 Most Valuable Poster Team Colleague Featured Poster

A freelance technology journalist for 30 years, I have been a Contributing Editor at PC Pro (one of the best selling computer magazines in the UK) for most of them. As well as currently contributing to Forbes.com, The Times and Sunday Times via Raconteur…

Dani AI

Generated 9 Months Ago

— useful summary of the fallout. The headline dispute raises a few legal points that matter to anyone building games or running a studio: who actually owns the code and IP, how and when royalties/bonuses become payable, and what remedies exist if a publisher withholds money after firing founders.

Key legal takeaways to keep in mind:

  • Under U.S. copyright rules an employer will own works created by employees “within the scope of employment,” and some commissioned works qualify as a “work made for hire” only if there’s a signed written agreement. See the Copyright Office guidance for details. (https://www.copyright.gov/register/se-hire.html)
  • California law requires prompt payment of final wages when employment ends; failing to pay timely can trigger “waiting time” penalties. The state DLSE explains final-pay rules and related remedies. (https://www.dir.ca.gov/dlse/FAQ_paydays.html)
  • Whether a promised royalty, bonus or commission is treated as “wages” depends on the contract language and how the payment is structured; California cases draw a line between commissions that are wage-like and discretionary bonuses. See Keyes Motors for an example of the commissions analysis. (https://law.justia.com/cases/california/court-of-appeal/3d/197/557.html)
  • Breach-of-contract claims and claims for breach of the implied covenant of good faith/fair dealing are common in these disputes; California precedent (e.g., Foley v. Interactive Data) limits recovery to contract remedies rather than a separate tort for bad-faith discharge. (https://caselaw.findlaw.com/ca-supreme-court/1773800.html)

Practical checklist for developers or studio leads facing withheld payments:

  • Pull together all written agreements, pay stubs, royalty statements and source-control timestamps.
  • Send a concise written demand for payment (preserve delivery proof).
  • If you’re in California, consider a wage claim with the Labor Commissioner (DLSE) while also consulting IP/employment counsel; DLSE has filing instructions and forms. (https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm)
  • Preserve communications, build a clear ledger of owed amounts, and avoid informal “verbal” fixes without written confirmation.

This is general guidance, not legal advice — complex IP/employment facts matter. Consulting an attorney experienced in entertainment/game-studio disputes early is usually the most practical next step.

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