Brouhaha? Ha Ha Ha
That title will stir some memories if you remember Nick Danger (and you should). Now, on to the post.Not only won't this go away, it just keeps getting more interesting.
Today, Mike Griffith, the CEO of Activision, resigned. Was it related to the excruciating nature of the Infinity Ward fiasco? It's hard to imagine it any other way--the timing is far too coincidental.
Here's the thing. It doesn't matter, at this point, whether Activision is 100% correct in all of these lawsuits. The fact that it even got to this point was a clear indictment of Griffith.If his resignation wasn't related to the Infinity Ward situation, he would have stayed on (for PR purposes) until everything settled down. It's not like he's leaving for some great outside opportunity--he's staying on as vice-chairman of Activision Blizzard.
In other words, he's been kicked downstairs.
I saw the lawsuit filed by the 38 current and former IW employees today (thanks Joystiq), and it's simple:
1. "the members of the Infinity Ward Employee Group were, and are, express intended third party beneficiaries of the Bonus Plan Agreement."
2. "The only condition precedent which needed to be satisfied in order for the members of the Infinity Ward Employee Group to qualify for their share of the Bonus Pool was the delivery of Modern Warfare 2 to Activision in time for a November 10, 2009 launch of the game.
3. "Pursuant to the formula set forth in the Bonus Plan Agreement...Assuming Infinity Ward's Fourth Quarter Bonus Pool is $118 million, and not counting West's and Zampella's share, the employees of Infinity Ward are currently entitled to at least $82 million.
4." ... Activision has already paid approximately $28 million...Activision is withholding, and refusing to pay, at least $54 million due and owing to employees of Infinity Ward for the Fourth Quarter of 2009 alone."
Also, the Bonus Pool for the first quarter of 2010 is estimated at $30-45 million.
There's more, but that's the meat. In contrast to the lawsuit filed by Zampella and West, which read like it was written by an incendiary carnival barker, this lawsuit is very lean and very clear. There's nothing vague here, and it's an absolutely specific claim: under the Bonus Plan Agreement, Activision owes them a shitload of money.
The clarity leads me to believe that the employees are correct.
Here's what I think happened. Activision created that bonus pool with an estimated amount of compensation in mind. They wanted to incent the employees, but really didn't want to actually pay them--or, at least, didn't want to pay them more than a planned amount. So they created some kind of incentive plan that looked potentially fabulous on the surface, but only really paid off under highly unlikely circumstances--i.e., Modern Warfare 2 selling far more units than even Activisions's most optimistic scenario. A tiered bonus plan could work that way, where the payout gets substantially higher if a game's sales go into the stratosphere. So Activision might have created a bonus plan with multiple tiers, but in every scenario they envisioned, the payout would be similar, due to the way they set up the tiers.
What happened, though, was the scenario they didn't envision: Modern Warfare 2's sales did go into the stratosphere, even beyond Activision's own inflated expectations.
It's possible that the bonus pool might be 5x or even 10x what Activision expected, and an employee at IW might be looking at ten years of salary--or more--as his/her bonus.
In that situation, it's hard to find a way to incent people for the future. They got their nut. It's not like you can offer them that kind of money for the next game (there are issues of fairness with other development teams that could get very, very ugly), and they can afford to be very demanding about their future compensation, because if you don't satisfy them, they just walk.
However, the one thing you absolutely don't do in this situation is hold the money hostage. Good grief, a fourth grader would know better.
I don't know how this ends, but I do know one thing: for Activision, it doesn't get better from here.
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