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Will Activision block Respawn's EA game?

Sledgehammer tipped for Nov 2011 COD.

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Image credit: Eurogamer

The increasingly bitter war between mega videogame companies Activision and Electronic Arts levelled up this week when the Call of Duty publisher attempted to drag its chief rival into its countersuit against ex-Infinity Ward stars Vince Zampella and Jason West.

In a mammoth document published by Joystiq, Activision alleges that EA "conspired" with West and Zampella to "derail Activision's Call of Duty franchise, disrupt its Infinity Ward development studio, and inflict serious harm on the company". Activision wants a whopping $400 million in damages from EA.

But could Activision also block Zampella and West's new studio, Respawn Entertainment, from creating new games for EA?

In court documents Activision makes astonishing allegations about the conduct of Zampella and West. "They were small-minded executives almost obsessed by jealousy of other developers and the thought that another Activision game or studio might share their spotlight," Activision alleges.

They are accused of "covertly" copying certain materials while under contract with Activision. Quotes from an email between West and Zampella include comments such as, "Dunno how to scan secretely [sic]" and, "Probably better to just photocopy and fedex."

Lawyers and analysts Eurogamer spoke to this week suggest this allegation makes an Activision-fuelled injunction against Respawn a distinct possibility.

"No impact on Infinity Ward, but the lawsuit could impact Respawn," Wedbush Securities' analyst Michael Pachter says. "If Activision keeps this up, they may seek an injunction alleging that the guys stole trade secrets."

"That's [an injunction] quite possible depending upon how this next hearing goes," Jas Purewal, a games lawyer at Olswang and writer of Gamer/Law, tells Eurogamer.

"Activision is seeking very substantial amounts of damages from EA. They're also talking about clawing back all of the money they've paid to West and Zampella. They're looking for a whole range of different other remedies as well. Some of them could quite easily turn into an injunction against Respawn from developing further games on the basis that what West and Zampella have been doing is based on the confidential Activision information. Activision says West and Zampella just walked off with a whole bunch of their stuff.

"That would be an extremely ambitious step to try, and I'm sure it would be hotly contested by Respawn Entertainment. It would come down to a judge to decide whether or not that had merits."

In August EA Partners boss David DeMartini, the main who signed Zampella and West after they were sacked by Activision, told Eurogamer that Respawn's new game was further out than Insomniac's unannounced multiplatform game for EA.

"The thing everybody needs to remember is they were starting at absolute zero," DeMartini said. "This is two guys who really know what they're doing having to go find a place for the team, buy chairs and desks and furniture, find new technology from the ground up, and pull a team together. I need to get HR people and contracts. There are all kinds of things and administration that need to take place.

"Amongst all that administration they've pulled together the core of a fantastic team and they're starting to work on a whole bunch of ideas to try and find what is going to be the one right idea for us.

"It's like the Pope coming from the group of cardinals," DeMartini added. "You just wait for the smoke to come up and they share with you. We're sitting there waiting for the smoke to come up and when it does we'll call you."

With a decision on EA's involvement in the case not due until January, and a trail date set for 23rd May 2011, thoughts turn to the outcome. Analysts and lawyers agree it's too early to call, but what impact does the lawsuit, and Activision's allegations, have on gamers and the future of the billion-dollar Call of Duty franchise Zampella and West created? Will Activision's $400 million damages claim further dent Infinity Ward's ability to create the inevitable Call of Duty: Modern Warfare 3? What of Sledgehammer Games, the newly formed studio that's hard at work on a mystery Call of Duty FPS?

"I think that the November game will be made by Sledgehammer," Pachter continues. "Activision was intentionally opaque about who was working on next year's game, and specifically refused to acknowledge whether the next game was being made by Infinity Ward or Sledgehammer when I asked them directly about it last month.

"So it is not safe to assume it's going to be an Infinity Ward game [that launches November 2011]. The only safe assumption is that there will be a Call of Duty game in 2011."

Pachter's prediction is a sound one, according to Purewal. "50 or so Infinity Ward employees have commenced a lawsuit against their own current or ex-employer depending on if they've left or not," he says. "Although that's a separate piece of litigation, Activision does comment on it in passing, saying West and Zampella had actually been responsible for withholding bonus payments themselves.

"It may well be we see future friction between those Infinity Ward employees who are claiming the bonus payments and West and Zampella."

He adds: "This lawsuit has become very much about Call of Duty versus Medal of Honor. That's one of the key issues for anyone who plays games these days. Anything that affects those two titles is going to be of interest to gamers.

"We can see just from the news reports over the last year, totalling it all up, that Infinity Ward in terms of its number of developers, was decimated. Absolutely decimated. One of the things Activision complains about and claims for in this litigation is the cost of having to rebuilt Infinity Ward. It wants EA to pay whatever those costs are. We don't know how much they are. I can absolutely see the knock on effect on Modern Warfare overall."

While Colin Sebastian of Lazard Capital Markets is unable to comment directly on the lawsuit, he expects it to negatively impact everyone inviolved: shareholders, gamers and employees.

"EA and Activision have long been fierce competitors, but in recent years it has become more intense, and brought into the public eye, and one of the epic rivalries in media and entertainment," he says.

"Now that top executives at each company won't miss an opportunity to point out the flaws of the other, it's also personal.

"The lawsuit certainly won't be the end of the rivalry, and it makes for good drama, but at the end of the day their customers, shareholders and employees won't be served well by a drawn out battle."

M2 Research senior analyst Billy Pidgeon, however, can already see light at the end of the tunnel. "Whatever the decision it is the talent, West and Zampella, that will be most affected by the outcome," he said.

"Activision, EA and gamers at large will carry on no matter how the matter is settled."

But for Purewal, Activision's lawsuit is more than a "PR play", as EA has described it. "This is Bobby Kotick loading his shotgun and firing it at the rest of the world, saying, 'We're not to be mucked around with.'

"I do not think this is a completely trumped up claim at all by Activision. There are clearly questions that need to be answered.

"That said, it's a classic piece of litigation in that West and Zampella have their own allegations about Activision, which also will need to be answered."

Both Activision and EA have declined interview requests from Eurogamer.

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