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Modern Warfare 2 Execs fired

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Echo55hotel
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Modern Warfare 2 Execs fired

Post by Echo55hotel on Thu 04 Mar 2010, 5:10 am

Activision Stuns With Firing of 'Modern Warfare 2' Execs


By: Chris Morris
Special to CNBC.com




The video game world was reeling Tuesday after two top executives at the developer responsible for last year’s biggest game were suddenly and unexpectedly dismissed.


Modern Warfare 2


Jason West and Vince Zampella, the president and CEO respectively of Infinity Ward, have left the company, apparently removed by publisher Activision after alleged “breaches of contract and insubordination”. (Infinity Ward is a wholly owned subsidiary of Activision.)

Employee turmoil is commonplace at game publishers—the industry has seen multiple thousands of layoffs in the last 12 months—but when the people affected are the leads on “Call of Duty: Modern Warfare 2,” it’s something that makes investor ears perk. “MW2” set new industry sales records last year, selling 4.7 million copies in its first day in the U.S. and U.K. alone. In January of this year, the game passed $1 billion in retail sales.

The company did not reveal further details for the action and did not return calls for comment. Broadpoint AmTech analyst Ben Schachter, in a note to analysts, pointed out, though, that there has been recent chatter on Wall Street “regarding possible M&A interest about Infinity Ward from private equity firms and others.”

The long-term impact on Activision is unclear. The company, in a 10-K filing on Monday noted that an internal investigation was occurring at the developer and was “expected to involve the departure of key personnel and litigation.” (West and Zampella were not named specifically in the filing, but both have indicated via their LinkedIn pages that they have left the company.)













“At present,” Activision
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said in the filing, “the company does not expect this matter to have a material impact on [earnings].”

It certainly won’t affect this year’s “Call of Duty” installment. Activision leapfrogs development of the games between two studios. The 2011 installment of the game will be developed by Sledgehammer Games, a new wholly-owned studio that is being run by former Electronic Arts
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game makers, Activision said Tuesday afternoon.

The company also announced the formation of a business unit that will focus exclusively on the “Call of Duty” games and it is in discussions to extend the franchise to Asia.

Infinity Ward is reportedly working on a new franchise, which might have spurred some of the outside interest. The developer is also working on downloadable content for “Modern Warfare 2” that is expected to contribute up to 4 cents per share to Activision’s 2010 earnings.

The larger question is how will the team at the development studio react to the departures. Infinity Ward created the “Call of Duty” series and installments made by the team have consistently earned higher critical scores. Turmoil and turnover could negatively impact that, which could impact earnings long-term.

That said, recent consolidation in the industry has resulted in a sizable pool of notable talent. And if the current team sides with its former managers and leaves, it would quickly be replaced.

“Given Activision’s studio compensation model (based on franchise profitability), we would believe there would be no shortage of top development talent looking to work on such a valuable brand,” writes Janney Capital Markets analyst Shawn Milne.

Activision Publishing CTO Steve Pearce and Steve Ackrich, head of production, will lead Infinity Ward on an interim basis.

Activision is also hardly a one-trick pony. “Call of Duty” is a franchise that is very important to the company, but the publisher also derives substantial revenue from titles created by Blizzard Entertainment. That group is expected to release two games this year – the long-awaited “Starcraft II” and an expansion pack for its hit online game “World of Warcraft”. Both games are expected to be enormous sellers.

And while the music genre is nowhere near as large as it was two years ago, Activision’s ownership of the “Guitar Hero” franchise will continue to bring in respectable revenue.

Many analysts, in fact, believe the company’s 2010 guidance is conservative. Between the expected reception for Blizzard’s upcoming titles and the next “Call of Duty” (which won’t come close to matching last year’s sales, but will still likely do well), the rest of the company’s games can perform just marginally and Activision will hit its numbers.

While the headlines with the Infinity Ward situation will be ugly (particularly among the gaming press), Activision (as a company) is doing substantially better than its competition. Electronic Arts
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, the one-time leader among game publishers, has laid off thousands of employees and been unable to turn around losses. Take Two Interactive Software
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has warned investors that it will not make a profit this year, despite having the strongest lineup of games in years.
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Re: Modern Warfare 2 Execs fired

Post by PAUL-AWOL- on Thu 04 Mar 2010, 7:17 am

I wish I knew what they did, it will be out soon..



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Re: Modern Warfare 2 Execs fired

Post by I_Seiran_I on Fri 05 Mar 2010, 10:05 am

I read, and it is probably be a rumour, that they were supposed to have DLC out when Battle field Came out, and since they didn't they were in a breach of contract.


It was just a rumour, and I don't know how valid it can be.,



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Re: Modern Warfare 2 Execs fired

Post by Echo55hotel on Fri 16 Apr 2010, 3:58 pm

Among video game companies, it's Electronic Arts vs. Activision Blizzard
and it's about as ugly a fight as you've ever seen.

While the rhetoric gets shrill in any corporate battle, it has moved well past that in this fight, with high profile employees being wooed away and gamer loyalties being put to the test. Ultimately, though, it's shareholders that, for better or worse, could be caught in the middle.

Monday saw the latest—and biggest—rift between the companies, when Jason West and Vince Zampella tied their new development house to EA, striking an exclusive distribution deal with the publisher. The pair formerly headed Infinity Ward, the Activision studio responsible for "Modern Warfare 2," 2009's top selling game. The publisher abruptly fired them last month, alleging breach of contract and insubordination.



The ripple effect from that could be felt for some time, as current Infinity Ward employees decide whether to join their old bosses or stay put. Already, four high-ranking developers have quit Infinity Ward. While none have officially joined Respawn Entertainment (West and Zampella's new studio), most industry observers expect they eventually will.

If it's the beginning of a greater exodus, that could have significant repercussions for Activision.

"All of this turmoil around Infinity Ward has certainly been a distraction, and if a significant portion of Infinity Ward's staff leaves for the new studio, it could impact Activision's 2011 release schedule," says Ben Schachter, an analyst with Broadpoint AmTech.

At the heart of the battle is two companies jockeying for the title of the industry's largest publisher. EA held that role for years until Activision merged with Blizzard Entertainment in 2008, putting it on top. Around the same time, EA saw some big titles underperform and was rejected in its efforts to acquire [b]Take Two Interactive Software


The rivalry goes much further back, though it used to take on a different form. Years ago, EA and Activision had booths across from each other at E3, the video game industry's annual trade show. Each would progressively turn up the volume on their speakers to drown the other out—until it was impossible to hear anything at either booth. In some ways, the shouting match of the past year or so is much the same.



There have been so many employees switching allegiances in recent years that it might be worth setting up a shuttle between the companies' two offices. West and Zampella (who, ironically came to Activision from EA in 2002) are just the latest examples.

Last July, the duo behind EA's "Dead Space" were recruited to Activision to form a new internal studio (which, ironically again, is now working on a "Call of Duty" game). A couple years ago Activision president Kathy Vrabeck quit the company, only to end up at EA.

While the fight is a fun one to watch from the sidelines, it could open doors for competitors to gain traction in the industry.

"It kind of takes the heat off of other people," says Billy Pidgeon, senior analyst with M2 Research. "Look at how Nintendo

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came out of nowhere because Microsoft and Sony
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[ didn't really consider them a threat when they were busy fighting over the console top spot last generation."

For investors, there is an upside to the feud. The highly competitive battle between the two companies is the type of thing that fosters and encourages innovation from developers. That often means popular games that boost sales.

The risk, though, comes with how distracting the fight is.

"For shareholders, the issue is: Where are the companies investing their resources and how [do] they expect to be making money in the future," says Pidgeon.

Of course, it's also possible that the small number of major publishers in the industry puts a magnifying glass on the EA/Activision struggle. There are, after all, mega-stars in any content industry—and if Brad Pitt became a free agent, it's a safe bet that Hollywood studios would go into feeding frenzy mode to bring him on board.

"EA and Activision have sort of separated themselves from THQ
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and Take Two, because they're the two largest players, while Hollywood has six to eight big studios," says Eric Handler, senior equity analyst at MKM Partners. "It looks like a bigger rivalry than it might be. … And I don't think it's too distracting for either studio."
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Re: Modern Warfare 2 Execs fired

Post by Admin on Sat 17 Apr 2010, 4:57 pm

Damn,, looks like EA snagged some new employees. LOL.

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