Analysis: How Does The Infinity Ward Fiasco Affect Call Of Duty?

Ever since Activision fired the two heads of its prized Modern Warfare creator Infinity Ward, video game websites and forums have gone into meltdown mode. Here you have the world's biggest video game publisher axing Jason West and Vince Zampella, the two heads of a subsidiary that just made their parent over $1 billion with November's Call of Duty: Modern Warfare 2. Now, at least today in the media, Infinity Ward is associated with lawsuits, employee defections and general drama. With Infinity Ward losing about a quarter of its employees following West and Zampella's firings, and a new lawsuit that has former and current staff suing Activision for unpaid royalties and bonuses, there's speculation that Activision could just opt to close Infinity Ward. But at this point, would it even matter if Infinity Ward's name was laid to rest? What would that mean for the Call of Duty franchise, and does the average gamer -- or even average Call of Duty fan -- care about the dispute? We spoke with analysts, gamers, journalists and retail to find out. A Dignified Death? Janco Partners' Mike Hickey, the analyst who first publicly speculated that Infinity Ward could shutter amid the staff defection, said it may be in the best interest of Activision and remaining Infinity Ward employees to let the studio die a dignified death. "We think that a more effective way to rebuild a studio’s mojo would be to take the remaining creative force and allow them to shape their own future and subsequent ego identification through a new studio, as opposed to always trying to relive past Infinity Ward glory," Hickey said. "It would seem that the studio shock from massive employee defections has likely destroyed any remaining creative culture within Infinity Ward." But not all industry watchers agree that Infinity Ward is at death's door. "There are a lot of unknowns out there right now, but so far we don’t believe [Infinity Ward] will be shut down," said Todd Greenwald with Signal Hill. "We think Activision will retain the studio -- even if is largely in name only -- assuming it still has brand equity." Greenwald added, "If Infinity Ward winds up being a liability -- that is, a constant reminder of the ugly fallout post-Modern Warfare 2 -- then certainly Activision may just scrap the name and rebrand it." The analyst said that he expects the widely-expected Modern Warfare 3, no matter who creates it, to "easily" sell more than 10 million units. Wedbush's Michael Pachter called Hickey's speculation of a studio closure earlier this week "overly melodramatic," although he did say that he believes "this situation has escalated well beyond what [Activision] intended." The dispute between Activision and Infinity Ward has had an impact on Activision stock in recent days as well. "It appears to me that investors believe that Activision has transformed itself from a relatively fair employer into the Evil Empire, with contentious dealings between the company and employees the norm," Pachter said. Has The Dispute Tainted Call of Duty? Infinity Ward has a large fanbase. Out of the millions of Call of Duty consumers, there is a core contingent that is aware of what's going on at Infinity Ward right now. They know that the studio created a Call of Duty game every other year with Treyarch, and they know that Infinity Ward is the series originator. This group is concerned about the future of the franchise and is disenchanted with the publisher of one of their favorite series. "Honestly, after Activision fired Vince and Jason, I sold my copy of Modern Warfare 2 and bought [EA's] Bad Company 2 instead," said grad student John Vanderhoef of Milwaukee. One Seattle-based gamer said, "Activision has reached Walmart status in my mind, in that I absolutely refuse to pay for another game [or] DLC from them." But the gamer is willing to make an exception, despite the concern. "If the game really is all sorts of awesome, I may be willing to buy it used." David Eckelberry, lead gameplay designer with LucasArts, said that the debacle between Activision and Infinity Ward has had "no effect whatsoever" on his views of the current Call of Duty game and franchise. However, of the future of Call of Duty, he remains "entirely skeptical." He said, "[There's] definite room to pause and consider the quality level of the next installment of Call of Duty. Though honestly, the masses will decide this -- if everyone on my 360 friends list is playing Modern Warfare 3 -- or whatever -- then I’m going to join the party." Some gamers, like game journalist Jason Dobson, are taking a wait-and-see attitude. "I prefer to separate the art from the artist, and reserve judgment of where the next studio will take Call of Duty until I play the game." Law student and Popmatters game critic L.B. Jeffries said that the fallout between the employees and Activision could well turn out to be a good thing. "Modern Warfare 2 was a bloated, misguided, and over-designed hubristic mess," Jeffries said. "The franchise needed new handlers and Infinity Ward needed a new project." Jeff Cary, an employee at the independent Indiana-based video game retail chain McVan's, offered, "Most people won't care because they don't even understand that the Call of Duty games are developed by different studios. Video game developers only matter to people who like to nerd out on games, like myself. Other than that Activision just needs to put out a quality Call of Duty every year and the masses will be happy." Analyst Greenwald agreed: "Who knows how much of this controversy will still be relevant 18 months from now," he said. "Furthermore, Call of Duty is such a mass-market brand with broad appeal way beyond the hard-core gamer, that the vast majority of Call of Duty buyers likely have no idea who Vince Zampella and Jason West are." Lazard analyst Colin Sebastian added: "I don't think most consumers pay attention to which game studio develops a particular title." Asked if the dispute between Activision and Infinity Ward tainted his perception of the franchise, gamer Tohon Mink summed up the thoughts of many Call of Duty fans by replying, "What dispute?" Beyond The Fiasco With or without Infinity Ward, it's clear that Activision is moving forward with the Call of Duty franchise in some shape or form. Beyond traditional retail releases, like Treyarch's next Call of Duty title, analyst Pachter forecast that Activision will transform the series into a subscription multiplayer game. Activision CEO Bobby Kotick more than hinted at the prospect as early as 2008, when he said that a massively multiplayer online, monetized Call of Duty would be a "natural evolution" of the franchise. Pachter said, "I think that the company is on the path to subscriptions, and that West and Zampella did not wish to work on that kind of game, leading to their termination. I think that over the next two years, Activision will introduce a subscription game, and think that annual Call of Duty revenues and profits will likely rise rather than decline." Analyst Doug Creutz with Cowen and Company said, "Now that the franchise is 'established,' it becomes more a question of execution than innovation. Talent moves around in this business all the time. The key is managing your product around that."