03 March 2010

Activision Says 'Call of Duty' Executives to Leave


Activision Blizzard Inc. said two senior executives at the studio that makes the company’s top- selling “Call of Duty: Modern Warfare 2” video game were expected to leave amid an internal probe of insubordination.

The investigation at the Infinity Ward studio also involves breach of contract, Santa Monica, California-based Activision said yesterday in a regulatory filing. The matter is expected to result in the “departure of key personnel and litigation,” the world’s biggest video-game company said in the filing.

“Call of Duty: Modern Warfare 2” was the best-selling game in Europe and the U.S. last year, the company said. The series is Activision’s most profitable packaged video game, with more than 15 million copies sold in the past year and profit margins of up to 60 percent, according to Shawn Milne, an analyst at Janney Montgomery Scott LLC in Philadelphia.

Jason West, president, and Vince Zampella, chief executive, of Encino-based Infinity Ward, left the company, according to a person with knowledge of the situation who declined to be identified because the departures haven’t been announced.

Attempts to reach West and Zampella through calls to Infinity Ward and through the LinkedIn social network were unsuccessful.

“Having the top developers leave is a new risk,” Milne said in a note today. “A greater risk would be whether or not the two heads end up taking more talent away from Activision.”

Maryanne Lataif, a spokeswoman for Activision, didn’t respond to requests for comment.

Infinity Ward, which created the “Call of Duty” game, was acquired by Activision in 2003. The unit is part of a rotation of studios Activision uses to create new versions of the game each year. “World of Warcraft” and “Guitar Hero” are the other key franchises that Activision publishes.

Activision fell 13 cents, or 1.2 percent, to $10.81 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have fallen 2.7 percent this year before today.

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