Activision Blizzard Inc.’s shakeup of the local video game studio responsible for its famed “Call of Duty” franchise carries some risks for the Santa Monica-based publisher.
Last week, Activision announced that Vince Zampella and Jason West, respectively the chief executive and president of Infinity Ward Inc., the Encino-based developer of the blockbuster titles “Call of Duty: Modern Warfare” and “Call of Duty: Modern Warfare 2,” had left the company. All indications point to a severe and bitter rift.
By removing the top two people at one of its prized studios, Activision throws some uncertainty into the future of the franchise, as it’s possible that other Infinity Ward employees will follow Zampella and West out the door.
“I see no reward here for Activision,” said Mike Hickey, an analyst with Greenwood Village, Col.-based Janco Partners Inc. who follows Activision. “You don’t want to change the chemistry of the team that put together these games.”
An Activision spokesman declined to comment about West and Zampella’s departure. In a Securities and Exchange Commission filing March 1, Activision said it was investigating two senior employees at Infinity Ward for breach of contract and insubordination, and said it expected the investigation to lead to “the departure of key personnel and litigation.” The next day, the company announced that West and Zampella were no longer employees.
West and Zampella, who filed suit against Activision on March 4, could not be reached for comment. But in the lawsuit, the duo claims that the company’s allegations against them are false. They’re seeking $36 million in damages and control of the “Modern Warfare” franchise.
Activision announced it was bringing in another studio, Sledgehammer Games in Forest City, to develop future titles for the “Call of Duty” series, although it’s unclear whether Sledgehammer will be taking work away from Infinity Ward.
West and Zampella helped conceive and launch the “Modern Warfare” series. “Modern Warfare 2,” which was released in November, became one of the best-selling games of all time and generated more than $1 billion in sales.
There was evidence of tension between West and Zampella and Activision a year ago, when West told an industry publication that Infinity Ward had to “fight for everything” with Activision.
Hickey said it’s still too early to tell what impact the turnover will have on Activision’s bottom line. He thinks Infinity Ward will work on a Modern Warfare sequel, for release some time after 2010. If Activision can keep Infinity Ward’s staff intact, or find experienced developers to work on the game, it could still turn out to be a best-seller.
Activision stock closed up 6 cents March 4 at $11.03 per share.
Private Spark?
A local publicly traded Internet dating company could be bought by a private equity firm.
Beverly Hills-based Spark Networks Inc., which trades on the American Stock Exchange, announced March 2 that it had received an offer from Great Hill Partners LLC to buy all outstanding shares of Spark. Great Hill, which is based in Boston, is offering a purchase price of $3.10 per share, a 5 percent premium over the price of the stock at the time of the offer. On March 4, Spark’s shares were up 6 cents and closed at $3.35.
Spark stock hit a high of $7.60 in 2006, when the company went public, but has steadily declined since. The company’s top share price in 2009 was $2.93.
A representative from Great Hill did not return a request for comment. In a statement, Spark said it would form a special committee to review and evaluate the proposal.
Spark operates a network of dating Web sites mostly aimed at specific communities. Among its properties are BlackSingles.com and ChristianMingle.com. Such sites make most of their money by charging members a subscription fee.
Internet sites that charge subscription fees – including many dating sites – have struggled in the recession as consumers cut back on discretionary spending. A recent report by Internet traffic analysis firm ComScore found that several prominent online dating sites, including Yahoo Personals, Match.com and Singles.net, experienced double-digit declines in Web traffic year over year. In its latest quarterly report, Spark stated that its number of subscribers fell 11 percent to about 165,200.
For the past year, Spark has also been coping with a drop in revenue and profit. In the quarter that ended Sept. 30, Spark reported net income of about $1 million, down 42 percent from the previous year. Revenue was about $11.1 million, a 20 percent decrease.
Battery Bucks
CFX Battery Inc., an Azusa startup building rechargeable lithium ion batteries for electric cars, has raised $14.2 million, the company announced two weeks ago.
Founded in 2007 by a pair of scientists at the Caltech, CFX is building batteries for use in the next generation of electric vehicles. The company also plans to build so-called “primary” batteries – which can’t be recharged – for use in medical and military devices.
Investors in the latest fundraising round include CMEA Capital, US Venture Partners and Harris & Harris Group. CFX plans to use the money to double its manufacturing capacity in its Azusa facility, the company said in a statement.
Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225, ext. 230.
