Business, Economics and Jobs

Activision settles 'Call of Duty' lawsuit


A clerk holds a banner during a launch event for the highly anticipated video game, "Call of Duty: Modern Warfare 3" at a GameStop store in Las Vegas, Nevada on Nov. 7, 2011.


Ethan Miller

Activision Blizzard Inc. on Thursday settled a lawsuit worth millions of dollars in royalties with the original creators of the "Call of Duty" game franchise.

In a statement, Activision said "all parties to the litigation have reached a settlement of the dispute."

Both sides said they had settled out of court, and that the terms would not be disclosed, according to the Associated Press. Activision said the one-time expense of the settlement won't affect its earnings outlook for the current quarter or calendar year because of recent unexpected good performance.

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The legal battle started in 2010, when Jason West and Vince Zampella, former heads of Activision game studio Infinity Ward, sued Activison for wrongful dismissal and breach of contract, and Activison countersued, reported PC Mag. The lawsuits came after the company fired West and Zampella and formed a stand-alone unit for Call of Duty.

When West and Zampella left the company, more than 40 game developers from Activision quit, according to the Los Angeles Times. The developers, led by Todd Alderman, then filed a separate suit against Activision, alleging the company withheld hundreds of millions of dollars in bonuses and royalties. Thursday's settlement resolved this lawsuit too.

"For Activision, there doesn't appear to be any major negative financial impact, in part because they are exceeding their financial guidance and it also allows management to focus on the future rather than the rear-view mirror," Colin Sebastian, analyst at Baird Equity Research, said to USA Today.

West appeared in court, but declined to comment, according to the Times. He was seen smiling as he left the courtroom.