Key Franchise Shake-Up at Activision Blizzard (NASDAQ:ATVI)

The next Call of Duty installment may not be up to par with the level of enjoyment fans are used to, yesterday the top executives and creative team behind the best-selling video game of last year Activision's (NASDAQ:ATVI) "Call of Duty: Modern Warfare 2 " walked off the job.

ATVI shares are only down 1% on the news of Jason West and Vince Zampella, the president and chief executive, respectively, of Encino-based Infinity Ward, the game development studio behind Call of Duty: Modern Warfare, have both exited the company. Updates to their LinkedIn pages said that they were no longer employed by Infinity Ward, which is owned by Santa Monica-based publisher Activision Blizzard Inc.

(AP) Their surprise exits were foreshadowed deep in Activision's annual report filed with the Securities and Exchange Commission on Monday, as first reported on the website of cable network G4.

"The Company is concluding an internal human resources inquiry into breaches of contract and insubordination by two senior employees at Infinity Ward," the annual report said. "This matter is expected to involve the departure of key personnel and litigation. At present, the Company does not expect this matter to have a material impact on the Company."

Call of Duty is one of three key franchises, along with Guitar Hero and World of Warcraft, that accounted for 68% of Activision Blizzard's revenue last year. A shakeup at Infinity Ward, creator of the Call of Duty series and producer of its popular Modern Warfare installments, could be a major blow to the publisher, particularly as sales of Guitar Hero plummeted last year.

A new Call of Duty sequel is in production at another Activision studio, Santa Monica-based Treyarch, and set to be released in the fall. People familiar with the situation said it was set during the Cold War. In addition, Activision has a new studio in Northern California working on future Call of Duty installments as well. However, as creator of the series, Infinity Ward is particularly popular with gamers.

Associated Press

SOURCE: http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/03/heads-of-call-of-duty-studio-exit-in-surprise-shakeup.html