March 4 (Bloomberg) -- Activision Blizzard Inc. was sued by the executives who created the “Call of Duty” franchise, after the video-game publisher fired them on “false” insubordination charges to avoid paying royalties, according to their complaint.
Jason West and Vince Zampella, who co-founded Activision’s Infinity Ward studio, sued the company in Los Angeles Superior Court yesterday, claiming breach of contract and wrongful termination. They seek at least $36 million and control over “Modern Warfare,” a subset of the “Call of Duty” combat games, according to a copy of the complaint.
Activision, the world’s largest video-game company, conducted a “pretextual” investigation to fire the Infinity Ward co-heads and avoid making a royalty payment due on March 31, according to the complaint. “Activision terminated their employment weeks before they were to be paid substantial royalty payments as part of their existing contracts for ‘Modern Warfare 2,’” West and Zampella’s lawyers at O’Melveny & Myers LLP wrote in a statement.
Maryanne Lataif, a spokeswoman for Santa Monica, California-based Activision Blizzard, declined to comment on the suit. The company said in a March 1 regulatory filing that two senior executives who led “Modern Warfare” were leaving and said it was investigating insubordination and breach of contract.
The company said on March 2 that it formed a new unit to run the “Call of Duty” franchise, naming Philip Earl to lead the unit.
West and Zampella oversaw creation of the World War II video-game “Call of Duty” and “Modern Warfare” sequels set in later periods. “Call of Duty” titles have generated about $3 billion in revenue, Activision said in its 2009 annual filing.
Activision’s top-three titles, “Call of Duty,” “Guitar Hero” and “World of Warcraft,” accounted for 68 percent of Activision Blizzard’s $4.3 billion in revenue last year, it said in the filing.
Activision rose 16 cents to $10.97 yesterday on the Nasdaq Stock Market. The shares have lost 1.3 percent this year.
The case is Jason West and Vince Zampella v. Activision Publishing Inc., SC 10741, Los Angeles Superior Court, California.
--Editor: Anthony Palazzo, Douglas Wong
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