Modern Warfare veterans heave a legal grenade at Activision Blizzard

Another day, another Infinity Ward lawsuit. Today, 38 developers at game studio Infinity Ward filed a lawsuit against parent company Activision Blizzard. The legal morass just keeps on getting deeper in this case, which is really about how to destroy a blockbuster game studio in 90 days.

The move is the latest in a saga that has engulfed the makers of Modern Warfare 2, the most successful game in video game history with more than $1.1 billion in sales (as of Jan. 13) since its debut in November.

Activision Blizzard fired the founders of the Encino, Calif.-based Infinity Ward studio, which made the blockbuster game, in March, alleging they were planning to defect and take a bunch of their employees with them. The founders, Jason West and Vince Zampella, sued the parent company, saying it cheated them out of $36 million in royalty payments. Then they started Respawn Entertainment and have been hiring away a bunch of the Infinity Ward employees.

Now about 38 employees of the Modern Warfare 2 team have also alleged that Activision Blizzard breached its contract with them, cheating them out of more than $90 million in a bonus pool. To date, Activision Blizzard has paid only $28 million of a bonus pool of $118 million accumulated in the fourth quarter. Excluding the share owed to West and Zampella, the suit says the employees should have gotten $82 million more.

Activision Blizzard has also withheld the $40 – 50 million it was supposed to put into the studio to ensure the timely delivery of the next game, Call of Duty: Modern Warfare 3. The suit says that Activision Blizzard made a profit of more than $900 million on the game by the end of 2009. Since West and Zampella left, at least 26 employees have left the studio.

Needless to say, Activision Blizzard is in the midst of the biggest mess in video game industry when it should have been basking in glory. Activision Blizzard has said the action is without merit.

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