The game empire strikes back at Infinity Ward co-founders

Activision Blizzard activated its legal machine gun today, filing a countersuit against the co-founders of its Infinity Ward studio, which makes the smash hit Call of Duty Modern Warfare games.

Santa Monica, Calif.-based Activision Blizzard said in the suit filed in Los Angeles County Superior Court that it fired Infinity Ward executives Vince Zampella and Jason West last month because the two “morphed from valued, responsible executives into insubordinate and self-serving schemers who attempted to hijack Activision’s assets for their own personal gain.”

Activision Blizzard’s filing is the first response to the lawsuit filed by West and Zampella against their former employee on March 3, just after they were fired as the leaders of Infinity Ward on March 1. The studio has made the Call of Duty games since 2003 and was the creator of Call of Duty Modern Warfare 2, which has sold more than 15 million copies and is the best-selling console/PC game of all time.

West and Zampella said that Activision Blizzard fired them to deprive them of $36 million in royalties, which was their share of the $1.5 billion in revenue from the game generated since November. But the company said in its countersuit that the co-founders were engaged in a scheme to “steal the studio,” one of the company’s most valuable assets.

The suit alleges that Zampella and West went “on a secret trip by private jet to Northern California, arranged by their Hollywood agent, to meet with the most senior executives of Activision’s closest competitor.” Creative Artists Agency has reportedly become the agent for the two men.

The comments seem to indicate that Electronic Arts, based in Redwood City, Calif., and a chief competitor of Activision Blizzard, was trying to woo the two men. Although EA spokesman Jeff Brown told the Los Angeles Times, “We don’t have the time to comment on the many lawsuits Activision files against its employees and creative partners.”

The suit alleges that the two leaders tried to stop Activision Blizzard from awarding additional compensation for team members as a reward for the game’s success. That would have made the employees easier to poach when West and Zampella executed their plans to leave and set up another company. The suit also says the pair delayed pre-production on Call of Duty: Modern Warfare 3, which is scheduled for a late 2011 release.

The suit also says that both men received millions of dollars in compensation during their time as the leaders of Infinity Ward; it said, for instance, that the two men received a third of the bonus pool for games and were negotiating for more of the share for Modern Warfare 2. (It seems clear that Activision Blizzard is providing this data in the lawsuit to drive a wedge between the founders and the employees of Infinity Ward that they might try to woo for a new company). In July, 2009, the suit alleges that Activision Blizzard asked which Infinity Ward employees should get restricted stock bonuses for a Wii version of the game. Instead, the co-founders refused and said they should receive the bonus themselves.

The suit goes on to say that the two men threatened to halt production on Modern Warfare 2 during a difficult contract negotiation and also accused Activision employees of being incompetent in an attempt to poison the relationship between the parent company and studio. They reportedly openly discussed “divorcing” Infinity Ward from Activision Blizzard and “spinning off” the studio to better reward employees. With two years left to go in their employment contracts, the two men reportedly talked to their agent at least once a week and met in person once a month.

Spokespersons for West and Zampella have not yet responded to request for comment. CAA declined comment.

Update: Robert M. Schwartz, the attorney representing Jason West and Vince Zampella, provided the following statement in response to Activision’s counterclaim in the West & Zampella v. Activision case:

The allegations Activision made today are false and outrageous. Just one example is Activision’s allegation that Jason and Vince conspired to spin off Infinity Ward. Activision itself proposed spinning off Infinity Ward when, last year, it sought to renegotiate Jason and Vince’s contract to induce them to forego developing a new game in favor of doing another Modern Warfare sequel. Jason and Vince had hired the Creative Artists Agency to advise them in their negotiations with Activision, not to breach their contract. The conversations with IW employees, talent agents, and others during these negotiations with Activision were not conducted to see if Activision’s proposal could work, and not in disrespect of their obligations to Activision.

Activision’s inaccurate and misguided allegations lose sight of the reality here: None of the false claims of insubordination or breach of duties had any negative affect on Activision — none. Modern Warfare 2 has been the world’s most successful video game. And none of this changes the fact that Jason and Vince would still be at Infinity Ward developing new games except that Activision kicked them out. This is just an Activision tactic to avoid paying Jason and Vince and everyone else at Infinity Ward the millions of dollars they all earned and that Activision owes them. Since being fired by Activision, Jason and Vince have taken steps to regain control over their creative future and plan to have an announcement very soon.