Activision holding back MW2 royalties?

By Robert Purchese Published 2 March, 2010

The rabbit hole goes deeper.

The emerging spat between Activision and the heads of Infinity Ward may have been caused by unpaid royalties.

Website BingeGamer (via VG247) was told by a collection of unnamed sources that not a single penny of the $1bn generated by MW2 has been seen by Infinity Ward.

The report also states that the "insubordination" IW bosses Jason West and Frank Zampella appear to have been sacked for was caused by secret discussions with rival publishers.

Infinity Ward partially owns the rights to the Call of Duty IP, and the studio's contractual obligations to Activision end October 2010, the report pointed out.

News broke early this morning that security had arrived at Infinity Ward to give West and Zampella their marching orders, following an internal human resources inquiry.

There's still been no official response by Activision or Infinity Ward.

Picture of Robert.

About Robert Purchese

Bertie is Eurogamer's Senior Staff Writer. When he's not hunting down news stories he's often found playing with his kids or gabbling about fantasy games and strange online worlds.

Read more articles from Robert by visiting the Robert Purchese archive page.

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Comments (68) Latest comment 2 years ago

Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!

  • Jamieb87 #1 2 years ago

    Ooo... Fight!

  • BabyJesus #2 2 years ago

    I'd love to say I'm surprised.

  • RobotRocker #3 2 years ago

    Come in Chopper Dave, we have uh-oh. I repeat, we have uh-oh.

  • sanctusmortis #4 2 years ago

    I'm sure Ubisoft will give them job offers when the legalese is done with...

  • Kremlik Verified Co-Founder, Crash To Desktop #5 2 years ago

    Makes you wonder if Blizzard ever get their 'fair pay' with all the money they made since the merger.

    Activision probly has already spent the money in question on designing their next bit of plasic to sove at us with their next tile

  • Darren #6 2 years ago

    I wouldn't be surprised to find out that this is true as Activision do strike me as being one of the more greedy publishers... after all they did ask a ridiculous £55 for console CoD: MW2 knowing full well that it would sell millions regardless. To my knowledge no other publisher has increased the RRP of their console games as they are still £49.99 or less here in the UK.

  • Gl3n #7 2 years ago

    No shit Captain Obvious.

  • friel #8 2 years ago

    Oh this gets just better and better!

  • Quint2020 #9 2 years ago

    Ahhh Activision how much I detest thee.

  • mungolikebeans #10 2 years ago

    Big corporte bread-head scumbags.

    Pay what people are due. It's not hard.

  • MiniAmin #11 2 years ago

    Critics will be so quick to denounce and castigate Activision's practices; but the fact is the vast majority of those critics probably bought MW2 themselves; despite knowing how Activision operate...

    Unfortunately i'm one of those critics, and on the behalf conscientious gamers everywhere i'd like to say, Fuck You Activision.

    That is all.

  • Rich72 #12 2 years ago

    "let's do this"

  • bluem4gic #13 2 years ago

    Bobby boy I hope they sue you for every penny

  • Lonestar #14 2 years ago

    "Stay frosty..."

  • Metalfish #15 2 years ago

    100 employees used work here....

  • X201 #16 2 years ago

    "Release the Encino billion!"

  • RedPanda #17 2 years ago

    Post deleted at 14:31:59 28-01-2012

  • Dylbot #18 2 years ago

    I bet that EA are loving the shit out of Activision's recent spate of downright bastardry. Must be nice for them to be the lesser of two evils for once.

  • DoctorFinger #19 2 years ago

    BingeGamer has amended their post with the correct info: both Infinity Ward and the Call of Duty IP are wholly owned by Activision. The deals which were set to expire later this year are with IW's principals: West & Zampella. Neither the CoD property nor IW itself are going anywhere, although the people who work at the studio may start exiting stage right after this whole mess.

    http://ww w.bingegamer.net/2010/infinity-...

  • Kerome #20 2 years ago

    Not surprised, and also I would not be surprised to see this one go all the way in terms of a proper court case. Some no-win-no-fee lawyer type is bound to take up the gauntlet, since the upside is going to be pretty chunky.

  • actionfitz #21 2 years ago

    "not a single penny of the $1bn generated by MW2 has been seen by Infinity Ward."

    Say what?
    jesus fuck. I'd be a bit insubordinate after that sort of bullshit.
    :o

  • darleysam #22 2 years ago

    Wow, that is glorious.

    Activision, you truly are the unwashed scruttock of the games industry. Screw your developers out of their royalties, then throw a legal tantrum when they want to improve their situation by squeezing free of your iron grasp.

    Magnificent.

  • BabyJesus #23 2 years ago

    I think if these allegations are true Activison has truly overtook Old EA in terms of comic book villain like behaviour.

    Bobby Kotick should grow a big moustache so he can curl it deviously while a group of muscians behind him play "DUM DUM DUMMMMMMM" on plastic instruments eveytime he enters a room.
    Edited by 1 at 02/03/10 @ 16:25

  • IronGiant #24 2 years ago

    So who's gonna offer the IW staff a new job then? Form an orderly queue behind EA!! The real question being will the COD name itself be enough without the actual developers behind it.. If I were EA I'd be negotiating them job offers already, get them on the medal of honour team asap.

  • evanac #25 2 years ago

    This kind of behaviour is what gives publishers a bad name.

    Bobby Kotick's house can't have any mirrors in it or he just wouldn't be able to get up in the morning, would he?

  • keme #26 2 years ago

    Any info on how reliable this James Walker of Bingegamer is? Are his sleuthing skills and connections up to spec?

  • TitusCrow #27 2 years ago

    Ah! this is rather glorious isn't it? Trouble in paradise? :) It would be interesting to see what would happen if the whole of IW left the IW studio. They would have to leave the COD ip and the studio name at Activision but I reckon it might put a fire under there ass to get humble again and maybe do a good game - with all the features in it instead of coasting..

    This one will get interesting.

  • Lotos8ter #28 2 years ago

    I always got the impression that IW were done with COD anyways and they wanted to go their own way, maybe with a future war shooter or in another direction entirely.

    I never understand this relationship between developer and publisher. Have IW not got the clout to make their new game without any publisher, copy it onto 10 million discs and sell it for their own gain alone????

  • Murton #29 2 years ago

    I never understand this relationship between developer and publisher. Have IW not got the clout to make their new game without any publisher, copy it onto 10 million discs and sell it for their own gain alone????

    IW certainly do have the clout to pull a "Valve" and become their own publisher, but I doubt they have the finances to bankroll such an operation, especially if Activision has withheld whatever royalties and sales bonuses IW have due.

    I suspect both of the men involved will be receiving offers from Ubi and EA before long. Imagine the coup that EA could pull by putting these two on MoH and then printing onto the box "from the creator of Modern Warfare"

  • Sunyavadin #30 2 years ago

    You can just picture the board at Activision, with the chairman standing in front of a video screen talking to Infinity Ward, shouting; "ONE BIIIIIIIIIIIIIIIIIIIIILLION DOLLARS!"

  • X3Entente #31 2 years ago

    and the world just fucking watched........

  • Haloboy #32 2 years ago

    We can do so much more. We can save this world... with the right leadership.

  • Xeopuppy #33 2 years ago

    Bobby Kotick is the new Hitler, sounds like a right Totalitarian bastard...

    And you thought the Combine had a iron grip...

  • cyacomini #34 2 years ago

    Kotick needs his baws felt

  • 1Dgaf #35 2 years ago

    Doesn't the Binge Gamer post also say that he doesn't know if there's actually a royalty deal in the contract? I think he says people just mentioned that they hadn't got royalties. That could be 'fuck man, it says in this contract that we should get royalties and we haven't got any' or it could be 'fuck man, we work our arses off and we don't even get any fucking royalties'.

  • Lee_Morris #36 2 years ago

    With this and declining sales of Guitar Hero, is the sandcastle crumbling?

    You should have been more patient Bobby and mixed some cement, tut tut.

  • Redeye #37 2 years ago

    If Activision are holding back royalties, and if the contract with IW states that such royalties (or a percentage thereof) are due, then the ensuing legal shitstorm that Kotick is facing is going to be fucking fantastic.

    However...

    If the contract states that, as a wholly-owned subsidiary of Activision, that IW are not entitled to a single penny, then the doofus who actually signed the thing in the first place deserves a gold-plated dry slap for supreme stupidity of the highest order.

    Either way, this is going to run and run...and it's times like this that I wish I'd trained to be a corporate lawyer. >;)

  • PlugMonkey #38 2 years ago

    If I were EA I'd be negotiating them job offers already, get them on the medal of honour team asap.

    You mean BACK on the Medal of Honour team...

    Imagine the coup that EA could pull by putting these two on MoH and then printing onto the box "from the creator of Modern Warfare"

    You mean "from the creators of Modern Warfare AND Medal of Honour"...

  • RobotRocker #39 2 years ago

    It would be more poetic if they joined Double Fine and convinced a good part of their team to come with to be honest.

    Double Fine's imagination and creativity with IW's eye for gameplay *Swoooooon*

  • ignatiusjreilly #40 2 years ago

    I've got a feeling there is no performance bonus in place. But IW looked at the royalties and thought they should be entitled to some.

    Agreed, this looks like the most likely scenario.

    My only hope from this saga is that more companies will look at self-publishing, or at least more honourable publishers. The ever-expanding enormo-publishers are doing no-one except shareholders any favours.

  • sneetch #41 2 years ago

    @EarlBassett
    I think they turned down a bigger budget, not money that would be salary/bonus.

    I've got a feeling there is no performance bonus in place. But IW looked at the grosses and thought they should be entitled to some.

    Is that a "gut feeling" or do you have any specific reason for it? I have no idea either way but I'd like to think they weren't so dumb as to sell all rights to royalties when they joined Activision.

  • Distributor #42 2 years ago

    People people people.....Why would ACTV/Blizz pay anything to IW other than whats in the contract? Im sure the people got their bonuses and such. Actvblizz owns the whole damn IW, OWNS it. It has no obligation to keep paying them anything. They make the game, IW probably had some bonuses tied down to how well the game does but other than that, they dont owe them anything. And now if the CEO and his buddy have been trying to come up with another publisher for their new IP while still under contract to Actvblizz....its really a no brainer. You, my friends are fired.

  • AphoticCosmos #43 2 years ago

    Wouldn't it be great if IW split from Activision, taking half the MW rights with them, and went to EA instead?

    Oh the lulzery.

  • sneetch #44 2 years ago

    @EarlBassett

    Yeah, I was thinking about it a bit more and you're right, it's the most likely thing. If they were actually entitled to royalties then withholding them would be downright illegal. Unless there's some kind of "sure, we said you'd get a percentage of the profits but Activision hasn't made any profits from this as we lost money on our other products" or whatever.

    I'm curious as hell to learn more.

  • Shakey_Jake33 #45 2 years ago

    As others have pointed out, Infinity Ward was created by a group of people who used to work on Medal of Honor for EA, leaving because they felt disillusioned by the direction EA were taking the series. I can't see them returning to EA.

    Judging by the reports, it seems likely that they were discussion with a rival publisher (Ubisoft? 2K?) for backing to start a new development studio.

  • [STARS]TyranT #46 2 years ago

    Well that's fucked Modern Warfare 3 then - I was interested to see how Soap and Price would of dealt with Makarov.

    Nevermind.

  • patchbox360 #47 2 years ago

    u can make some nice interest on hold back money.

  • lockload #48 2 years ago

    F*** activision lets hope all the devs go elsewhere and start a new studio i can guarentee they will get funding no problems at all

  • darkmorgado #49 2 years ago

    Bobby Kotick in "Greedy Money-Grabber Greedily Grabbing Money" Shocker!

  • freakzilla #50 2 years ago

    Bobby Kotic truly is the devil in (fat) human form.

  • MrE26 #51 2 years ago

    Fuck me, if a studio makes you a fucking billion dollars off a single game, you should damn well make sure they're taken care of.

  • Spekingur #52 2 years ago

    If you don't keep developers happy then they won't churn out good games. Keep them happy, give them money and other stuff and all will be good. Basically it feels like Activision is not recognising that developers are power that turns the wheel of their company - or at least, not giving that recognition. If IW hasn't gotten a penny of that 1bn$ mirrors that disrespect.

  • jefranklin18 #53 2 years ago

    Problem is Call of Duty: Vietnam will come out at Xmas along with whatever plastic-toy crap that Activision want to shaft on the game playing public (Sax Hero?), and they will be bought in their droves. The masses don't give a damn about how Activision treat people and will blindly keep handing over their money.

    After all, who here bought MW2 despite saying they would not after they saw it on special?

  • Redeye #54 2 years ago

    "After all, who here bought MW2 despite saying they would not after they saw it on special?"

    Not I - in fact, I have a lovely big Activision-shaped hole in my games collection.

    *flips Kotick the finger*

  • Spekingur #55 2 years ago

    I bought it. I am not going to deny myself a good game.
    I could ask the same of people who play WoW, are going to buy Starcraft 2 and Diablo 3.

  • man.the.king #56 2 years ago

    @Murton

    "IW certainly do have the clout to pull a "Valve" and become their own publisher, but I doubt they have the finances to bankroll such an operation, especially if Activision has withheld whatever royalties and sales bonuses IW have due. "

    I imagine Kotick was aware of that, and that is why Activision tried to postpone/stave off paying IW so that they would not be able to finance themselves instead of depending upon Activision. So in turn IW tried to contact other publishers, thereby causing fat little Kotick to sweat and then "huff and puff" and try to blow down IW offices.

    Just guessing...

  • MrE26 #57 2 years ago

    I didn't really know too much about Kotick, aside from the entire Internet hating him, but having just read a few quotes from him, he really does seem like a detestable little cunt.

  • IgeL #58 2 years ago

    This particular piece sounds like news out of nothing to be honest... If IW is entitled to royalties, they most likely would not have received them yet anyhow. Royalties are usually paid on a quarterly basis, and Q4 2009 ended on Dec 31. Typically publishers have, say, 45 days to send in the royalty report for the accounting period. I'd imagine most contracts also have it so that after that the developer should send an invoice and it could take up to 30 days to process it. In fact, looking at the Activision-Call of Duty: Finest Hour legal issues with Spark Unlimited (from 2007, see Gamasutra), Activision might have 60 days before they are required to send in the report. It seems like this also covers the payment period in the Finest Hour contract. So in effect, the royalties have become payable on Monday this week. Sure, even that is a delay, but it's not exactly anything out of the ordinary in the games industry. Another thing is that the game might not have hit royalties anyhow - there's a lot of deductions Activision could be making (especially if they can deduct marketing costs too). Royalties are paid from net revenue, which probably wasn't anywhere close to the $1 billion mark that Activision touted in their January press release, which seems to be calculated from the retail sales value, Activision gets much less than that. If the game took some $50-100 million to create and another bunch into marketing, it might fall short of royalties.

    Anyhow just wanted to clear up a little bit of the royalty stuff - it could be perfectly "normal" that IW doesn't see any royalties yet.

  • FortysixterUK #59 2 years ago

    I see a new studio being setup by the IW guys and Activision flogging the dead horse of the COD series into the floor with dull repetiton.
    I think Activision have a scumbag at the top in this Kotick fellow ? I wonder if Blizz are going to get shafted next? I assume they only did the nerget for the retail editons of Diablo 3 and Starcraft 2 and still actually own all rights to WOW ?

  • RobotRocker #60 2 years ago

    @ IgeL

    It was thought to be royalties, but now it seems that both men got the shaft because Activision's top brass didn't like the way they did things.

    According to Gamasutra, their sources say that Activision hated that IW wouldn't show them milestones (They only showed No Russian something like 8 weeks before it went gold so the execs wouldn't have a chance to force it out of the game), negotiated their contracts so that IW would be the only developer allowed to make "Modern Warfare" games and got a stipulation that they could make a new IP if they wanted to at any time instead of MW3 and publicly trashed Activision for exploiting the franchise while giving Treyarch grief.

    Activision supposedly told them to lay off some staff as part of company wide cuts but West and Zampella told them to take a running leap since they wanted to keep the entire MW2 team on. Turned out that is what Activision needed to fire them for breach of contract and said insubordination.

    [link url=http://www.gamasutra.com/v iew/news/27482/Analysis_Infinity_Wards_DoubleEdged_Sword.php
    ]http://ww w.gamasutra.com/view/news/27482...[/link]

    Now with the main obstacles out of the way. Activision is free to fully run the franchise into the ground and even has set up its own new "Call Of Duty" division like they did with Guitar Hero to run it into the ground more efficiently

    [link url=http://kotaku.com/5484026/
    ]http://kotaku.com/5484026/
    [/link]

    Yes, they are using the exact same strategy that annihilated the music game market for FPS games. Good grief.

  • KingPepper41 #61 2 years ago

    I wondered why there was no DLC coming out for MW2, that's why, the thieving bastards Activision have not paid Infinity Ward. :o(

  • Stop-gap #62 2 years ago

    It was thought to be royalties, but now it seems that both men got the shaft because Activision's top brass didn't like the way they did things.

    What, like really successfully? :p
    Stupid Activision, are they honestly so full of themselves (or deluded) that they can't let a few dev moans go by without flying into a huge hissy fit and risk destroying the `magic' at their (supposedly) BILLION DOLLAR earning/grossing studio? Seriously?
    A B-I-L-L-I-O-N fucking D-O-L-L-A-R-S. What manner of moron would actively jeopardize their chances of raking more of that in?

    There had better be more to it than that, or else it is probably the flat-out stupidest thing I'll read in years.
    Edited by 3 at 03/03/10 @ 01:38

  • Bluetooth #63 2 years ago

    I for one can't wait for Modern Warfare: Aerosmith vs Metallica, where Price and Soap go undercover in both bands and have to somehow dismantle their operations to bring crap rock music to the world. You can do it McTavish!

  • Shakey_Jake33 #64 2 years ago

    It seems Activision didn't learn anything from the relatively short life of the Guitar Hero series. There was always more potential in the music genre, but it was over-saturated during a short period of time, with no opportunity to grow the genre.

    If Call of Duty goes the way of Guitar Hero (i.e. milked to an extent that nobody cares anymore, and goes with a competitor's title for a change of pace), what else do they have left? Warcraft?

  • Matfink #65 2 years ago

    "not a single penny of the $1bn generated by MW2 has been seen by Infinity Ward."
    These things do take a while to filter down to the coalface...

  • jefranklin18 #66 2 years ago

    @Redeye:

    Good for you, me neither for that matter.

  • Quixz #67 2 years ago

    I saw this coming..

  • sneetch #68 2 years ago

    @jefranklin18
    After all, who here bought MW2 despite saying they would not after they saw it on special?

    I said I wouldn't and I didn't. Not because it was published by Activision or anything, because it didn't have the features I wanted.