EA Dismissed from ‘Call of Duty’ Lawsuit After Settlement With Activision

Two weeks before one of the biggest trials in the history of the video game industry gets underway, a pair of gaming giants, Activision and Electronic Arts, have resolved differences with each other. On Wednesday, the companies announced they had reached a settlement that will put an end to Activision’s $400 million lawsuit against EA for allegedly trying to steal its executives and “hijack” its assets.

The pact doesn’t change a May 29 trial date in a Los Angeles courtroom where Activision will do battle with Jason West and Vincent Zampella, former heads of Activision subsidiary Infinity Ward, responsible for producing the blockbuster game franchise, Call of Duty.

West and Zampella were fired from Activision in March, 2010 shortly before the arrival of Call of Duty: Modern Warfare 2.

The firing led to all sorts of legal fireworks that highlighted how game developers had become stars in the system and could trigger the kind of litigation that Hollywood knows well.

West and Zamepella sued Activision, alleging they were terminated so that Activision could avoid paying them royalties on Call of Duty: Modern Warfare 2, which enjoyed more than $1 billion in sales. They claimed that wrongful termination cost them more than $125 million in royalties on the first-person fighting game and had failed in promises to grant them creative authority, autonomy, and escalating royalty payments on future games.

Activision countersued, accusing the pair of being “self-serving schemers who attempted to hijack Activision’s assets for their own personal gain.”

Later, Activision amended its complaint to put some blame on EA for the ordeal. Former EA COO John Schappert allegedly covertly called West, urging him and Zampella to meet with EA CEO John Riccitiello, despite knowing that the two were under contract with Activision for two more years. Activision wanted EA to pay it $400 million for tortious interference and unfair competition.

The dispute has been headed for a trial later this month, but on Wednesday, Activision and EA announced a deal.

“Activision and EA have agreed to put this matter behind them,” said the companies in a statement, not revealing the terms of the pact.

The settlement won’t delay a jury hearing the dispute between Activision and West and Zampella. Activision requested that the judge delay the trial in light of the EA settlement, but the motion was denied this week.

E-mail: eriq.gardner@thr.com

Twitter: @eriqgardner