Last week, the gaming industry was shocked and dismayed to hear that Jason West and Vince Zampella of Infinity Ward had left over a dispute with parent company Activision. The sordid details of the acrimonious split were so unbelievable that some thought it was a publicity stunt meant to divert attention from EA’s Battlefield Bad Company 2, which launched on the same day. However, Activision soon made it clear that Infinity Ward was no longer on a two-year Call of Duty cycle, announcing in a press release that the next two installments in the franchise would be developed by Treyarch and Sledgehammer Games, respectively. Considering that Infinity Ward was responsible for the hugely successful Modern Warfare 2, which launched last November to overwhelmingly positive reviews and ridiculously high sales, this was a surprising move, and one that led some gamers to worry about the future of the series. However, looking back at Activision’s actions so far in 2010, this wasn’t the first potentially damaging move on their part.

Activision has been enjoying a steady reign as the number one third-party video game publisher for years now, a victory dependent on the numerous sequels and spinoffs from two main series: Guitar Hero and Call of Duty. However, with the music genre on the decline, 2009 wasn’t a great year for the Guitar Hero series, and Activision noted the "weaker market" for the music genre in their financial report in February. A former Activision employee, who wished to remain anonymous, said “We kinda expected things weren’t going as well as they could. We had been warned that there would be no bonuses. We just didn’t realize how hard the studio would be hit.”



On February 11, one day after releasing their 2009 financial results, news broke that Activision had cut the staff at Guitar Hero developers Neversoft, as well as Luxoflux and Radical Entertainment. Before anyone could even react to this, original Guitar Hero publisher Red Octane had also been shut down, another of Activision’s casualties. After years of gamers accusing Activision of milking the rhythm series to death, the future of Guitar Hero was uncertain, about to be handed off to yet another developer. It seemed like Bobby Kotick’s personal strategy of exploiting Activision’s key franchises “every year on every platform” was finally starting to backfire. “Frankly, we were burnt out,” according to the former Activision employee. “Most of the people at Neversoft wanted to work on things that didn’t involve Guitar Hero. But when your bosses say that is what you’re making, that’s what you have to do.”

Bobby Kotick has never been known for being a nice guy; he’s a shrewd businessman responsible for billions of dollars in profits for Activision. He has been known to stick his foot in his mouth, the famous “exploitation” comment being only one example, but Kotick’s comments at the DICE convention a week after the layoffs seemed particularly insensitive. Pouring salt in the wound of former Neversoft and Red Octane employees, Kotick expressed regret over not having purchased Harmonix to make their music games. He also noted, “I don't know how this happened, but all my life I was the rebel flying the Millennium Falcon or the X-Wing fighter and suddenly I wake up and I'm on board the Death Star.” The comments made many people in the industry angry, especially those who had just been let go. For a former Activision employee, “it felt like a slap in the face”.



Despite Activision’s February missteps, it seemed like the one developer that would be safe was Infinity Ward. After all, Infinity Ward was responsible for two of the highest-rated games of the generation, Modern Warfare and Modern Warfare 2. More importantly, those games had made boatloads of cash for the publisher, as well as Kotick himself. That’s why it came as a surprise when, on the morning of March 2, it became apparently that something was afoot at Infinity Ward. Before long, the truth was revealed: Jason West and Vince Zampella had been fired, and were suing Activision for unpaid bonuses. Other than some forthcoming DLC for MW2, Infinity Ward’s future with the franchise is unclear, and it’s not hard to imagine that the series could take a huge hit.

The big question now is what this all means for the Guitar Hero and Call of Duty franchises. In addition to World of Warcraft, these series make up a disproportionate amount of Activision/Blizzard’s profits, and one could assume that the company may be in jeopardy of losing its current spot as the number one third-party publisher. With Guitar Hero already on the decline, Call of Duty is going to be a necessary component for Activision to stay on top, but it’s hard to imagine the series reaching the same critical and commercial success without Infinity Ward.

Last year, I asked the hypothetical question “Is Bobby Kotick the new Ray Kasaar?”, comparing Activision’s current business model to Atari’s in the early 1980s, which led to the video game crash of 1983. I don’t think one company will be able to have the same affect on the industry again, but it does seem like the publisher’s exploitation policy may not be as profitable as it was a few years ago. I don’t think Activision’s stock is going to plummet overnight, but I wouldn’t be surprised if sales were less impressive over the next year or two. Furthermore, Bobby Kotick’s reign as antagonistic CEO could be in jeopardy as well. After all, Kotick has never cared about pleasing gamers or his own employees, but he does have to answer to stockholders. Activision’s stockholders can’t be thrilled about the company’s overwhelmingly negative publicity, and they certainly won’t be happy if sales of the publisher’s two major franchises decline in 2010. Quoting the same ex-employee, “All this Activision and Kotick nonsense is leaving too much of a bad taste in everyone’s mouth. It makes me wonder how long it’ll take before everyone says enough is enough.”