Is it “game over” for one of L.A.’s most successful video game studios?
Mike Hickey, an analyst with Greenwood Village, Col.-based Janco Partners Inc., wrote in a note to investors that he expected Infinity Ward Inc., the Encino developer of the blockbuster “Call of Duty” franchise, to be closed after completion of its next project.
A spokesman for Santa Monica-based Activision Blizzard Inc., which owns Infinity Ward, did not return a request for comment.
If true, it would be a stunning comedown for Infinity Ward, which just six months ago seemed to be on top of the video game industry. In November, it released “Call of Duty: Modern Warfare 2,” which generated more than $1 billion in sales.
But in early March, Activision ousted Infinity Ward’s co-founders, Jason West and Vince Zampella, alleging the duo was plotting to betray the parent company. West and Zampella have since filed suit against Activision for wrongful termination and started their own studio in partnership with Activision rival Electronic Arts Inc.
Last week, 38 current and former Infinity Ward employees filed a lawsuit against Activision charging that the company owes millions of dollars in unpaid bonuses for the success of “Modern Warfare 2.” Activision has denied the allegations.
While the lawsuits have tarnished Activision’s image, industry watchers said the real damage was done by the steady stream of Infinity Ward employees who followed West and Zampella out the door.
Since March, more than two dozen Infinity Ward developers have quit; many of them have joined West and Zampella in their new venture. Among them are some of the people who spearheaded development of “Modern Warfare 2,” including engineering, design and animation leads.
Hickey said the defections have created “meaningful uncertainty” around the “Call of Duty: Modern Warfare” franchise.
Michael Pachter, who follows Activision at L.A.-based Wedbush Morgan Inc., said Infinity Ward shouldn’t have trouble filling the vacant spots. The question is whether the new team would function as well as the old one.
“Everybody’s replaceable, and Activision will find a way to replace them,” he said. “But I think the missing element is the chemistry.”
Don’t Let the Door …
Jason Calacanis, chief executive and founder of Santa Monica Internet company Mahalo.com, occasionally posts e-mails to his blog exposing his disagreements with various people or organizations. But two weeks ago, a departing employee gave the fast-talking entrepreneur a taste of his own e-mail exposure.
Evan Culver, a former Mahalo employee, sent a companywide e-mail the night of April 20 to tell people he was leaving in two weeks to join another company. He complimented Calacanis and other employees, and said he hoped to stay in touch.
Within an hour, Calacanis fired off a response telling Culver he was “horribly disappointed” in him and instructing him not to come into the office next day. He concluded by saying: “Good luck being employee 4,367 at a dying company.”
Culver did what Calacanis has often done: posted the e-mails online. Soon the Internet was abuzz with the exchange.
In an e-mail interview, Calacanis told the Business Journal he regrets his handling of the situation.
“I would not send the e-mail again,” he said. “It was unprofessional. However, the e-mail does express how I authentically felt – and still feel – about job hoppers.”
Calacanis also wrote a blog post explaining that he was upset that Culver didn’t approach him to discuss his departure. He also wrote broadly about employee loyalty and the proper ways that someone should resign from a company.
Culver told the Business Journal in an e-mail that he gave his notice to Mahalo’s team leaders in person, but that Calacanis was not in the office at the time.
Culver also said he would have handled parts of the incident differently. But he doesn’t regret publicizing Calacanis’ e-mail.
“Posting that e-mail wasn’t that cool, I guess,” he said. “But it may prevent future employees from being treated with such disrespect.”
The Shoe Fits
ShoeDazzle.com Inc., an L.A.-based shoe buying Web site, recently raised $13 million from investors, the company said last week.
ShoeDazzle offers a staff of shoe experts to help match customers to footwear that fits their fashion style. Customers fill out an online survey and the company ships them several pairs of shoes. Customers pay to keep the ones they want and return the others.
The company is backed by several well-known names in Hollywood: One of its founders is model and reality TV star Kim Kardashian, while high-profile attorney Robert Shapiro is a director. Kim’s late father, Robert Kardashian, worked with Shapiro on O.J. Simpson’s defense team in the football star’s double-homicide trial.
The company said it planned to use the money to launch products.
Staff reporter Charles Proctor can be reached at email@example.com or at (323) 549-5225, ext. 230.
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