Inside Pulse 12

IP Ownership At Heart Of Respawn Entertainment/THQ Non-Signing

In an interview with Wired, THQ’s Vice President of Core Games Danny Bilson stated that his company almost signed Respawn Entertainment, but there was one point that neither side would budge on: the ownership of the intellectual property (IP) that Respawn would create. In the interview, Bilson stated that his “responsibility to (their) stockholders and to (his) CEO and the company is to build an IP library”, arguing that if they let Respawn have their own way, it would “open the doors for everyone else to say, ‘I wanna own it too'”.

In a response to the interview, Vince Zampella confirmed to Develop that the IP issue was the deal breaker.

“As for the IP ownership, frankly, after what we’d just been through with Activision, owning the IP we were going to create was important to us. Unfortunately, THQ did not want to agree to that.”

Respawn was formed after Mr. Zampella and Jason West, co-founders of Activision-owned Infinity Ward, were fired by the company for “insubordination”, at which point Activision reportedly locked down the company’s security. As a result, a large portion of Infinity Ward’s staff left, reportedly leaving bonus money on the table. Infinity Ward has been reformed and will be working on Call of Duty games alongside Black Ops developer Treyarch and newly formed Sledgehammer Games. Misters West and Zampella, along with a group of former employees calling themselves the Infinity Ward Employee Group, have sued Activision for the royalties in question, and Activision has counter-sued implying that West and Zampella were working behind the scenes to breach their contract with Electronic Arts, the company who ended up signing Respawn and who allowed the company to keep their intellectual property rights. A judge will determine if EA can be added to the lawsuit per Activision’s request sometime this month, and all of the lawsuits will be heard on May 23, 2011.

This is one of those rare cases where I think everyone made out according to what they wanted and needed. The reflex action would be to criticize THQ for not bending on this one point, but if that is their business model is, they can’t really be criticized for it. A successful game franchise is highly valuable, and while Electronic Arts might feel they have the leeway to let a company go with their rights – after all, EA publishes some games like Rock Star without owning those rights, and also has a hefty IP library to their own credit – then that’s their right. THQ is comparatively much smaller, so for them acquiesce to that demand might have potentially lowered their leverage to use with other companies.

On the other hand, it was to the advantage of Respawn to negotiate for their own IP rights. It’s very rare for a company to have the kind of leverage that these two had; usually, companies have the upper hands, and in order to get seen, creative people have to give up the rights to their work in order or they’re dead in the water starting out. How many times have we, as not only game fans but movie fans, anime fans, manga fans et al, seen something new come out from the people who weren’t the original creators, had the original creator publicly denounce the work, and had the end result turn out poorly? This was an unmoveable point from two people who had the chance to negotiate a very rare deal for themselves. THQ did not feel they could go against their normal business policy for them, but Electronic Arts did. That’s the free market at work, and in this case, it ended up working out for all sides.

CORRECTION: I had mistakenly noted that Treyarch developed Modern Warfare 2. I had meant to say Black Ops. This has been corrected. Just a flat-out brain fart on my part.

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