A source familiar with the studio told Kotaku that Infinity Ward has long bristled at the notion of any studio other than IW making a Call of Duty game. The studio heads' renewed 2009 contract with Activision affirmed that only Infinity Ward would be allowed to make Call of Duty games set in the modern era, according to the source.
Infinity Ward's two most recent games were 2007's Call of Duty IV: Modern Warfare and 2009's Modern Warfdare 2. In between, Activision-owned Treyarch developed Call of Duty: World At War and is expected to making 2010's Call of Duty, keeping with Activision's annual Call of Duty cycle. Infinity Ward, according to conversations Kotaku has had with employees at the studio in the past, is a one-game studio and one committed to two-year cycles. For IW, making a Call of Duty annually would not have been consistent with the studio's current structure. (Tensions between the studios flared up in public online close to the release of World at War.)
Kotaku has continued to hear from sources that Infinity Ward wanted to make either a new intellectual property or a game set in the future — the two projects might be one and the same — but that Activision resisted that.
Numerous sources with knowledge of the situation have speculated to Gamasutra that the contract dictates only Infinity Ward may make games in the Modern Warfare arm of the Call of Duty franchise. Other studios, like fellow Activision subsidiary Treyarch, may continue develop other Call of Duty-branded titles.
Sources say one development candidate would be newly-founded Sledgehammer Games, but Activision can't put another studio to work on the third Modern Warfare installment any more than it can force Infinity Ward to work on it now.
Another source with knowledge of the situation tells Gamasutra that although Infinity Ward is only about 75 developers strong, Activision brass demanded layoffs at the studio anticipating a refusal -- which they received, potentially opening the door for Activision to use that refusal as a way to launch a breach suit that would help it escape its contract.
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