'Call Of Duty' Creators, Activision Settle Lawsuit

Ben Fritz, a business reporter for the Los Angeles Times, talks to David Greene about what was gearing up to be the biggest lawsuit in the history of the video game industry. The creators of the Call of Duty franchise and the games' publisher were suing each other in suits totaling more than $2 billion. The trial was to start Friday in Los Angeles, but the parties settled at the last minute.

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DAVID GREENE, HOST:

And now to an even bigger battle that's been playing out in the world of video games.

(SOUNDBITE OF VIDEO GAME)

GREENE: That's the trailer for the game "Call of Duty: Modern Warfare 2." But it is not the action onscreen that's been captivating the industry; it's what's been going on behind the scenes. The two men who co-created the multibillion-dollar "Call of Duty" game franchise filed a lawsuit against their former employer, the company that publishes the games, Activision Blizzard. Activision then countersued in court, with claims totaling over $2 billion.

This was going to be the biggest lawsuit in the history of the video game industry. The trial was all set to begin today in Los Angeles. But at the very last minute, the battle over "Call of Duty" ended with an armistice, a settlement. And for more, we've reached L.A. Times reporter Ben Fritz, who's been covering all the twists and turns of this case. Ben, good morning.

BEN FRITZ: Good morning.

GREENE: Well, let's start with how this legal drama began. I mean, these two creators bring a big case against Activision. What brought this on?

FRITZ: What happened was, in March of 2010, Jason West and Vince Zampella, who had co-created the "Call of Duty" games - made billions of dollars for Activision - were fired, and this shocked the industry. And within a few days of their being shown the door, they filed a lawsuit against Activision, and claimed the company had fired them because it wanted to get out of paying them hundreds of millions of dollars in royalties and bonuses that they were owed under their contract.

GREENE: So then after they file the lawsuit against Activision, Activision fires right back with a counter-lawsuit. What, essentially, was the company's argument?

FRITZ: The company said that they had breached their contracts; that they were sick of working under the heel of them, and they wanted to decamp to Activision's biggest rival, Electronic Arts, and steal Activision's intellectual property in the process. And that would have been a breach of their contract.

GREENE: And it sounds like this case had such extraordinary twists and turns. I mean, at one point, Activision was being accused of actually trying to break into the email of these two creators?

FRITZ: Yeah, there was a lot of crazy stuff that came out in the court documents. There's a lot of fighting going on internally. There were, literally, people hanging up the phones on each other; changing locks. Activision felt they had no idea what was going on with Jason and Vince and their development studio. So they asked somebody in their IT department to try to break into the computers, to read their emails and check their voicemails. And when it turned out that was technically impossible, Activision actually considered staging a fake fire drill or fumigation so they would be able to get into the offices and find out what was going on with Jason and Vince.

GREENE: Well, Ben, you know, this legal drama grew to include 40 other game developers. I mean, it was going to be the biggest legal case in the history of video games. What, essentially, was at stake here? Are we just talking about money and egos, or is there something broader that we can kind of take from this?

FRITZ: Oh no. There's a broader issue, according to the developers and their supporters - and they had a lot of supporters in the industry. And it's a question of the level of respect and power that game developers, the people who actually create the games, have. In the past, most of the power has been in the hands of the publishers - kind of like the old Hollywood studio system in the '30s and '40s, when all the actors and directors worked under contract. Now that the video game industry is becoming so much more powerful culturally and economically, the creators want to get more respect. And they want to be treated just the way that a powerful director, like Steven Spielberg, would. And I think a lot of people have viewed this as a test case for the power and respect of video game creators.

GREENE: And so yesterday afternoon, we get this settlement. We - as I understand, the terms are confidential. We don't know what, exactly, is involved. But do you have any sense for who won; whether these creators got the respect they were looking for, whether the big company held ground, in a way?

FRITZ: Well, David, as you said, the terms of the settlement were private. Nobody would say anything. The only thing I know for sure is that Jason West, one of the developers in question, he was there in court. And as he walked out, he had a big smile on his face.

GREENE: All right. Interesting case. Ben, thanks so much of updating us.

FRITZ: My pleasure. Thank you, David.

GREENE: Ben Fritz is an entertainment business reporter with the L.A. Times.

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