Infinity Ward, more information!

So more information appears to have been forthcoming/divined on the whole Vince & Jason vs Activision spat.

It would appear that from conversations with people in the know, Jason and Vince were not surprised to be fired from Activision because of their unwillingness to have the MW brand milked to the point of invalidating the IP worth. If reports are correct, they were almost certainly putting in perparations for this eventuality - the lawsuit they handed Activision on being fired appeared suspiciously fast for a straight reaction to being fired. I'm sure that if they statements of being 'interrogated for 6 hours' are true, you can draw your own conclusions on what to expect next in that situation.

But what is more interesting is that my own speculation is that this was more about control of the MW brand than anything. It's been mentioned that in a memorandum of understanding between IW and Activision, that IW has the final approval rights for the MW brand. Meaning Activision cannot just milk the franchise as they would like willy nilly and as they have done with other IP they get their hands on.

Now, given this is modus operandi (ie business as usual) at Activision, I can imagine this must have been a massive sticking point. They've milked the living crap out of Guitar Hero, although it has to be said that I personally wouldn't disapprove of that. Guitar Hero has a limited shelf life anyway - there are only so many people who want to buy a plastic guitar and once you hit that number the market will inevitably contract. Milking it now is robbing the future value of the brand, because it doesn't have any anyway. Might as well milk it now while it *does* still have value.

In the case the Modern Warfare brand, that is not the case. As I see it, Jason and Vince were probably trying to extend out the life and value of the brand by NOT overselling it and spreading it everywhere. When you do that it's called Brand Dilution and the more of it there is out there, the less it's valued individually. This is why Ferrari doesn't make normal commuter cars and why Honda separates its high end business of Acura with a different brand name - to avoid brand dilution.

So here we have Jason and Vince trying to 'protect' their brand they've spent time building and we have Activision on the otherside desperate to milk it for all it's worth. Lets not forget that the Guitar Hero business IS dying off, and they need to keep expanding as a corporate or die. So they need to increase income from something else to cover the potential lack of reveneue from Guitar Hero.

Activision traditionally sucks at creating IP inhouse, prefering to buy it from outside. So they have nothing internally to cover this. So what do they need? They need to exploit something they *already have*. Oh, look, there's Modern Warfare looking all sexy and chick and popular. Lets exploit that! Oh, we can't - we have this pesky Memo of Understanding (which, lets be clear, is NOT a contract - it's an understanding between two people which should lead to contract) and those annoying guys over there at IW refuse to let us exploit it.

Damn.

Oh wait. They've been talking to EA? Oh MAN!! This gives us the lever we need!! Quick, call the lawyers!

I mean, it's all too believable, isn't it?

This isn't about the royalties for Modern Warfare 2. This is about control of the brand, and the external-looking-for-a-deal gives Activision the lever it needs.

The biggest problem I have with this is that Activision, almost to the same day, authorised $190 MILLION worth of shares to be distributed to the execs. I mean $190 MILLION worth.

Activision has a problem with creating IP right? Here's an idea. Keep, oh, $100m of that money and try putting it back into the company in order for it to have a future. How about this? Take that $100m. Split it into $2m parcels, then pay for lots of teams to spend 6 months and that $2m and build a prototype / vertical slice. The top, oh, 8, get full funding. That's 50 prototypes they get to judge. 50!. And the execs still get $90m to share among them selves.

I mean, that's doing something to promote the future of the company, but no, instead they'd rather rape the money that's there now, at the expense of the future.

Honestly, the share holders, if they had any sense, would oust this lot making the decisions at Activision Pronto.
But they won't. And the cycle will repeat itself down the road again.

It's just too depressing for words.

Posted at 05/03/2010 01:00:17 PM PST by Jake Simpson
Groups : Game Development, Rants

The IW/Activision Spat

Which should be more accurately titled "The Jason West & Vince Zampella / Activision Spat.

For those hiding under a rock, recently Activision fired the CEO and CTO of Infinity Ward, the people responsible for Call of Duty and the Modern Warfare brands of games, certainly the jewel in the crown for Activision internal development. They went to a meeting last Monday and were then escorted from the building. Several 'heavies' showed up at the IW offices and made the entire team leave, with no explanation.

This was mentioned in the 10-k filed that day by Activision, so we know the firing itself was premeditated and not a spur of the moment thing.

Jason and Vince have since hit back with a lawsuit to Activision, details various wrong doing and demanding creative control of the Modern Warfare IP, as well as unpaid royalties. Several rather despicable events have been documented in the filed suit, e.g.

"Activision conducted the investigation in a manner to maximize the inconvenience and anxiety it would cause West and Zampella. On little notice, Activision insisted on conducting interviews over the President's Day holiday weekend; West and Zampella were interrogated for over six hours in a windowless conference room; Activision investigators brought other Inifinty Ward employees to tears in their questioning and accusations and threatened West and Zampella with "insubordination" if they attempted to console them; Activision's outside counsel demanded that West and Zampella surrender their personal computers, phones, and communication devices to Activison for review by Activision's outside counsel and, when West and Zampella asserted their legally protected privacy rights, Activisions counsel said that doing so constituted further acts of insubordination."

Which, if true (and it probably is, you don't say these things in a suit if they aren't) doesn't look good for Activision.


I think it's worth pointing out that IW produces the quality of project they did *because* they resisted Activisions intrusive fingers (E.g. the Insubordinate behavior). As Jason has said before "If you aren't prepared to quit over something, then you don't really care enough about it", which paired with "When you have success, everyone wants their finger prints on it" says quite a lot.

Activision though is probably not questioning *why* the heads of their most successful studio felt this was necessary in their relationship with Activision in order for them to feel successful; they are just reacting to the how, not the why. Questioning the Why might reveal truths they'd rather not deal with. I suspect we've all done this at times.

The thing is though, Jason and Co report to Activision people, and there is only so long people who are supposed to be giving the commands are going to take direct reports ignoring them. As I heard it (and this is second hand), it's gotten to the point where IW would only actually talk to a couple of people at Activision. Lets not forget the end of game MW 2 scrolling credits speed thing, which very neatly summarizes how IW feels about most of Activision (note, some Activision people - ie the people who IW actually felt did stuff for them -localization, marketing and so on - were *not* in the fast scrolling group). For those who haven't seen, the end credits for Modern Warfare 2 scroll at different speeds. First theres the people who actually made the game, then after than come Activision people, which scroll by at quite a speed.

Now is IW an arrogant group? Sure they are. By all reports Jason and Vince aren't the easiest people to get on with, and tend to cultivate the attitude that if you aren't doing thing their way, then you are an idiot. I don't doubt that if that attitude was being presented to people they report to at Activision then there was no love lost between Jason and Vince and the suits at Activision.

But that arrogance *is* bought by accomplishment. They've made Activision over $2b dollars, on an original investment of $10m (The first COD had a $5m dev budget and they cost $5m to buy when Activision bought them out). They can afford to be a bit arrogant if you ask me.

Now don't get me wrong, I think Jason and Vince have probably gone a long way to making the bed they are now lying in. If you have a good relationship with your publisher this kind of thing doesn't happen, and it does take *2* to make a relationship. But from the outside looking in, what is going down appears to be far more lopsided than a reaction to their personal style in communication.

What Activision *doesn't* realise is that sure, they are responsible for *part* of the machine that brings the games to market but they are way more replaceable in the entire pipe than the dev team at IW is. That's the lurid truth that doesn't appear to have penetrated Activision yet.

Sure, they provided the funds to start up. Many other people could have too, it doesn't require *skill* or *creative juices* to recognise that a team who has already produced one good WW2 can probably do another, and is worth the $5m risk.

Now it terms of support in general, yeah, there is some argument there. The marketing has been good and so on. But it literally is not something that THQ couldn't have done, had they the money to invest in something like that. The only difference I can see is that THQ didn't, while Activision did. Now that IS an important fact, but is it worth the support of a company that is prepared to do some of the things I'll detail later?

In the entire part of the pipeline I can see, the only part of it that is irreplaceable is the team, and that team operates on the mandates put in place from top down (ie Jason and Vince). Remove that and part of the crucial foundation crumbles.

Lets not also forget some of the Activision based events that have occurred to set this up. It's been reported that Activision requested a 10% head count of IW (and IW is only 75 people - they are a pretty small shop to be producing the quality they are), expecting IW to refuse, which they did. Why would they do this? As I see it, thats to produce a paper trail of 'insubordination' so when they do decide to throw out the top people, they can point to it and say "well, there you go then". That's entrapment anywhere else, but hey, this is video game publishing! Nothing to see here.

I should point out this hasn't been confirmed, but I've heard it reported by several people with rather more direct knowledge than I have.

My own personal feeling on this is a situation where Jason and Vince wanted to do something else but where told No by The Suits. The Suits got wind of Jason and Co talking to other publishers, trying to put a deal in place so they could pull a Bungie. It's easier to take your leads with you when taking them to a signed deal than a vaporware "we'll find something", especially when you are giving up royalties the likes of which pay off your LA house. At this point, the Suits were not about to let the team go, so they set up a situation where they could fire Jason and Vince, also slap them with a law suit to make them unattractive to other suitors, and forestall a mass exodus of team.

That's how I see it anyway. I don't have access to any particular secret info, I'm just going on what is already out there and trying to read between the lines.

But what really blows my mind is how Activision treats the people they expect to stay behind. If what I've read online is true, they've retroactively changed how the royalty stream works so instead of the stream coming 6 months after the game is out (1 quarter to make profit and 1 quarter to ensure you stick around) so that they pay out the royalty over 2 years. With the bonuses getting incrementally bigger, so the largest are at the end.

This is their idea to get the team to stay. Basically holding the bonuses / royalty payments for ransom.

If this is true (and I've not had it confirmed yet, so take it with a pinch of salt) all I can say is WTF.

Instead of coming in and saying to the rank and file (or at least the leads) "Look, this shit is fucked up, we know that. The guys at the top were doing stuff that made us _really_ uncomfortable, where subverting what we need you as a studio to do and as such they had to go. But we want YOU to know that we REALLY value your work and position, so here's a quick $200k bonus and here's a contract to sign for the next 3 years, so you can be sure that you'll get the royalties as they come in over the next year or so", they basically said "Ok, well, we don't want you to leave so we are going to hold onto the money you thought you were going to earn by your hard efforts".

Way to go Activision. Really thought that one through, didn't you? Money, frankly, talks. The more you try and keep it to yourself the more aggrieved the people you are holding it out from will feel. The more you give it, the more the people you give it to will feel you are being fair and will reward you with loyalty. This is basic 101 management stuff. If this is true, then I think it's *really* telling of where Activision Execs minds are at in this situation. They recognise that the team is important, but not as much as the money, and that the team is replacable where the money is not.

What this indicates to me is that Activision has finally and truly revealed itself to be more interested in the business of running Activision than they are in the core business they are supposed to be in, which is that of making games. This is the crucial pitfall that EA fell into, where making the actual games - you know, the bit that makes the money? - is second to running the business day to day. This is MASSIVE in terms of focus shift, although it's not surprising given Activisions focus on IP over implementation. It's not IP OR implementation you goons. It's IP AND implementation, and with IW you had both!

Another fact that seems to be missed here is that a teams cohesion and effectiveness comes about to a large degree by company culture. If everyone is expected to bring their A game and B games are not tolerated, people tend to rise to that challenge, through peer pressure, professional pride, desire for recognition etc. Jason and Co appear to have generated that environment for their team and that kind of environment is *always* generated by those at the top. This is why Bioware and Gearbox have had such success - because Greg and Ray (the directors of Bioware) and Randy Pitchford (the CEO of Gearbox) are decent people who have been in the trenches and are plugged into what their people are doing and what motivates them.

This kind of culture requires nuturing, and continual maintenance. You replace the top 2 people and it will start to break down. It's just inevitable. Personal style of the guys at the top cannot help but influence company culture. Add to that loosing some key people (which they will, without doubt), and you've got serious issues for the MW IP 2 years down the line.

Lastly, I truly believe that Activision is underestimating the amount of developer support Jason, Vince and the folks at Infinity Ward would receive over this. From what I've seen there's been near 100% support of the devs of Infinty Ward, and Activision is seen as the Evil here. Quite something for them to supplant Electronic Arts as the Bastion of Evil for publishers.

I would suspect (and hope) that this has serious ramifications for developers considering doing deals with Activision.

Honestly. Words fail me. (well, they don't, but you get the idea).

Here's a link to my friend Dave Taylors Blog, who also has thoughts on this.

Posted at 04/03/2010 02:22:29 PM PST by Jake Simpson
Groups : Game Development, Rants