Joystiq

Analysts: No cause for concern over reported unpaid Modern Warfare 2 bonuses

Alexander Sliwinski — Tue, 02 Mar 2010 15:30:00 EST

Following the departures of two Infinity Ward executives, a related story has gained significant traction and deserves some attention. BingeGamer reports that the development studio "has yet to be paid a single dime in royalties for Modern Warfare 2," ostensibly to be paid by publisher Activision. As Infinity Ward is a wholly-owned Activision studio, we turned to some leading industry analysts to explain what appears to be a private contractual matter.

EEDAR analyst Jesse Divnich tells Joystiq, "I couldn't speak to what the royalty agreement between Activision and Infinity Ward is. If royalties haven't been paid out yet, I wouldn't consider that too alarming. The game has only been out for a little over 90 days. Additionally, it is common to see royalty agreements based upon factors such as hitting release date, review scores (a.k.a. 'Metacritic Clauses') or revenue milestones. I think if you just replace the word 'royalties' with 'bonus' it should make some more sense."

Wedbush Morgan's Michael Pachter explains, "I don't know the nature of [Infinity Ward's] contract, but my bonus is paid after year-end (in February), and theirs is likely the same. The idea that they haven't been paid 'yet' is not all that surprising. The year just closed, and the final SEC documents were filed yesterday." He continues, "IW sold itself to Activision back in 2004, Activision owns the [Call of Duty] IP, and the guys leaving were employees under some kind of contract. Activision appears to believe that they have breached this contract, and may or may not be justified in withholding bonuses."

Check out Pachter and Divnich's full analyses after the break.

[Editor's note: This post has been altered to reflect updates in the Infinity Ward leadership shakeup.]

Continue reading Analysts: No cause for concern over reported unpaid Modern Warfare 2 bonuses

Analysts: No cause for concern over reported unpaid Modern Warfare 2 bonuses originally appeared on Joystiq on Tue, 02 Mar 2010 15:30:00 EST. Please see our terms for use of feeds.

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LGJ: Read the fine print!

Mark Methenitis — Sat, 07 Nov 2009 02:00:00 EST

Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:

CJ Sorg

Well, after the incident with Courtney Love and Kurt, it looks like the whole issue of famous musicians in games is back in the press with No Doubt suing Activision over Band Hero. A one time event is an anomaly, but twice in just a few months suggests something else. Of course, both of these all tie back to the contract, and since I'm a transactional attorney who spends the majority of most days negotiating and drafting agreements like these, I'm hoping I can shed a little light on what might be causing the problems. Since I wasn't involved in these particular negotiations nor have I read these contracts, all of what I'm presenting is speculation.

But before I begin, I suppose I should answer the simple question, "What is a contract?" I assume that most people reading this have at least some idea, but just in case, it's worth describing in detail. A contract is a legally binding agreement between two parties to perform certain promises in the future. In theory, to form a contract there are five elements: Offer and acceptance, consideration, intent, capacity, and formalities. In reality, it's fairly simple. The parties must have a meeting of the minds, that is agree to the same terms, which is often viewed as an offer by one party and acceptance by the other. Each party must put up something of value, called consideration, for the contract to be valid. The parties must intend to enter into a contract, and be of the appropriate mental capacity to enter into the agreement. And then the agreement is generally recorded in writing, as most jurisdictions have rules that require written agreements, which is then signed by the parties. And that is how a contract is born, in theory anyway.

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LGJ: Read the fine print! originally appeared on Joystiq on Sat, 07 Nov 2009 02:00:00 EST. Please see our terms for use of feeds.

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THQ announces extension of WWE renewal notice; Pachter explains

Alexander Sliwinski — Wed, 28 Oct 2009 11:30:00 EST

THQ announced today that World Wrestling Entertainment has extended a deadline that allows the publisher to renew its licensing contract. The extension lasts until December 21, 2009 -- the original deadline was November 1. If signed, the agreement would be good through December 31, 2014.

THQ is cool with the WWE, but it's not very chummy with JAKKS Pacific, its longtime partner in the WWE licensing venture. The wounds also run deep between JAKKS and the WWE. When asked for comment on the license renewal and further details regarding the three-way deal, a THQ representative told Joystiq that the publisher plans to renew its contract with the WWE, and then added, "Beyond that, I cannot comment."

The business, politics and legal issues are certainly complicated. We spoke with Wedbush Morgan analyst Michael Pachter who laid out multiple scenarios, but in the end he believes the most likely outcome is that the joint venture between THQ and JAKKS will be terminated. If JAKKS enforces its (believed to be one-year) non-compete clause, then no WWE games can be produced. Neither side would benefit from that, however.

Pachter suggests that the WWE's renewal deadline was extended to give THQ and JAKKS time to settle their issues. What it sounds like to us: THQ and WWE want to move forward as a couple, and the previous arrangement, featuring JAKKS as the third wheel, has worn out its welcome. Check out Pachter's complete analysis after the break.

Continue reading THQ announces extension of WWE renewal notice; Pachter explains

THQ announces extension of WWE renewal notice; Pachter explains originally appeared on Joystiq on Wed, 28 Oct 2009 11:30:00 EST. Please see our terms for use of feeds.

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Light reading: The Call of Duty contract

Alexander Sliwinski — Sun, 14 Jan 2007 13:32:00 EST

Filed under: PC, Sony PlayStation 2, Microsoft Xbox, Business

Gamasutra published the full development contract for Call of Duty: Finest Hour. The backstory is in 2005 developer Spark sued Activision for "breach of contract, fraud and misrepresentation." Activision "counter-sued for fraud, breach of contract, misappropriation of trade secrets, trade-mark infringement, false designation of origin, and false advertising." To make the legal jargon make sense to those without a law degree, Gamastura got together three game attorneys to comment on every page of the contract. The document includes "milestone payment specifics" and other tidbits on the purely business side of game development. This contract was publicly released as part of the legal dispute between Activision and developer Spark.

Attorney Tom Buscaglia explains, "Contracts such as these are rarely made public because they inevitably contain confidentiality provisions that prohibit the publication of or even talking about their terms. But once the contract was filed as an exhibit in the lawsuit, and then unsealed by the court, the contract became public information." It's a fascinating read for those interested in learning what goes on behind-the-scenes. Plus, it beats the normal way of getting information about development: Hooking up code monkeys with a lot of booze at the Game Developers Conference and pumping them for information.

Light reading: The Call of Duty contract originally appeared on Joystiq on Sun, 14 Jan 2007 13:32:00 EST. Please see our terms for use of feeds.

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