Current and ex Infinity Ward employees file suit against Activision over unpaid royaltiesWritten by: / / No Comments
According to a report on videogame news and video website G4, a collection of current and former Infinity Ward employees calling themselves the “Infinity Ward Employee Group” have filed a lawsuit against Activision alleging breach of contract, and seeking a large sum of money forming part of unpaid royalties and bonuses.
The group, totalling 38 members, have banded together under attorneys such Bruce Isaacs at Wyman & Isaacs LLP in California, who told G4:
“Activision owes my clients approximately $75 million to $125 million dollars. Activision has withheld most of the money to force many of my people to stay, some against their will, so that they would finish the delivery of Modern Warfare 3. That is not what they wanted to do. Many of them. My clients’ entitled to their money. Activision has no right to withhold their money – our money.”
The lawsuit claims that, while $28 million in bonuses related to the development of Call of Duty: Modern Warfare 2 has already been paid to members of Infinity Ward, a further $54 million is still due to employees ‒ this from profits made on the game in 2009 alone.
The Infinity Ward Employee Group is seeking to recover “between $75 million and $125 million, if not more, in compensatory damages,” however, a good deal more than the $54 million owed to them. These numbers were calculated based on the following factors:
- Unpaid bonuses from 2009 and 2010 sales generated by Modern Warfare 2—fourth quarter 2009 and first quarter 2010, specifically.
- Bonuses “due and owing to them” past first quarter 2010.
- “Bonus/royalty/profit participation” related to “technology/engine” royalties, “other special performance bonuses,” “other studio bonuses” or “any other bonus/royalty/profit participation.”’
- Lost value on “restricted stock units” that Activision “promised” would vest (read: own it in your own name and purchase it from Activision) when Modern Warfare 2 sales eclipsed Modern Warfare 1, which “has long ago occurred.”
- Money owed as it relates to Modern Warfare 2 “sister games, including but not limited to” the oft-mentioned Modern Warfare 3, “if Modern Warfare 3 is ultimately delivered and marketed.”
- Interest rates related to the above sums of money.
Eligibility for royalties and bonuses, the suit reveals, was deemed appropriate on the condition that Call of Duty: Modern Warfare 2 was delivered to Activision ready to be released on the intended launch date of November 10th 2009 ‒ a date the team managed to hit, which means the team is eligible for the royalties and bonuses due to them, no matter their actions and movements after the fact.
Furthermore, the lawsuit claims that these royalties and bonuses are being withheld in an attempt to force Infinity Ward to continue development on Modern Warfare 3. From the suit:
[Activision has] “improperly withheld this specifically identifiable sum of money from the members of IWEG in order to force them to keep working for Activision so that Activision could receive delivery of Modern Warfare 3.”
[Activision] “made a calculated, purposeful and malicious decision” [to withhold proper bonuses] “in an attempt to force employees of Infinity Ward to continue to work at a job that many of them did not want just so Activision could force them to complete the development, production and delivery of Modern Warfare 3.”
“In short,” the suit continues, “Activision withheld the property of the IWEG in an attempt to keep the employees hostage so that Activision could reap the benefit of the completion of Modern Warfare 3.”
The lawsuit states that Activision has a duty to pay all due royalties and bonuses to all members of the Infinity Ward Employee Group “within 72 hours of the termination of their employment,” although Activision has failed to comply.
Activision has since issued a public reply to the lawsuit, stating simply:
“Activision believes the action is without merit. Activision retains the discretion to determine the amount and the schedule of bonus payments for MW2 and has acted consistent with its rights and the law at all times. We look forward to getting judicial confirmation that our position is right.”