Analysts: No cause for concern over reported unpaid Modern Warfare 2 bonuses
As we continue to wait for official comment from Activision, Infinity Ward or any of the reported players affected by the alleged ousting of Infinity Ward executives, a related story has gained significant traction and deserves some attention. BingeGamer reports that Infinity Ward "has yet to be paid a single dime in royalties for Modern Warfare 2." As the developer 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."
We'll continue to follow the Activision and Infinity Ward situation and report on it as soon as official statements are made. Check out Pachter and Divnich's full analyses after the break.
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."
We'll continue to follow the Activision and Infinity Ward situation and report on it as soon as official statements are made. Check out Pachter and Divnich's full analyses after the break.
