Infinity Ward founders join Electronic Arts

Jason West and Vince Zampella, of Call of Duty (CoD) acclaim have announced that they have signed on with Electronic Arts and are recruiting for their new studio, Respawn Entertainment. The creative director and software designer for Infinity ward have also resigned this month, in a move that may impair Activision ability to continue developing its top franchise. In addition, CEO Kotick has reorganized Activision in such a way that he and senior management will be able to become "more involved" i.e. interfere more. For instance, previous CFO Thomas Tippl is now 'guiding' Blizzard president Morheim.

I feel some concern over these proceedings but I feel that there is no need to be unduly worried. Activision still has its fine Treyarch studios that have been developing every other CoD game. Since the next CoD game, rumored to be CoD Black Ops, was slated to be developed by Treyarch anyway, this should leave Activision with sufficient time to reorganize in order to make up for the loss of West and Zampella. In addition, even if it does end up destroying its CoD franchise, it is likely that they have sufficient amounts of other intellectual properties to make up for the loss. Currently, Starcraft 2 is about to roll of the shelves and Cataclysm will be released this year along with the next CoD game. Activision will also be buying back $1bn worth of stock this year.

Ultimately it is only the test of time that will reveal the success of all these proceedings. But in the meantime, I think that Activision-Blizzard has a good chance at maintaining its profit margins and its growth.

Road to recovery

While it seems that the financial crisis has been averted and that America is on the road to recovery, there are indicators that suggest otherwise. Unemployment is still hovering around 9-10% even after a massive 1 trillion dollars of government expenditure (whose effect may be wearing off). Freddie Mae and Fannie Mac, the two government-sponsored enterprises that securitized subprime loans and hedged them in order to fulfill congress's desire to provide affordable housing, are still making losses despite the bailout. Investor confidence has been shaken by profligacy: Moody's warned that America's AAA debt rating will be downgraded if they are shown to be unable to manage their debt. 6 days later, the massive health care reform bill was passed that will cost $900 billion.(after numerous 'cost savings' that include $507 billion dollars in new taxes and penalties and $404 billion dollars in cost reductions). Recently companies like 3M and Caterpillar have felt begun to feel the impact and have reduced their earnings estimates. Long-term predictions of the economy or stock market are notoriously inaccurate, but it seems that for the moment the current administration is unwilling to address the core problems of the economy.

Why Iran should be at the top of Obama's priority list

It is impossible to underestimate the threat of nuclear arms in the hands of a despot who engages in election fraud and who terrorizes people into submission. However, Ahmadinejad and his Revolutionary Guards far more than that. Iran is far more volatile and unpredictable than any of the previous communist despotic regimes with nuclear ambitions. Communists, being atheists, have no belief in heaven or hell. As such they are committed to preserving their existence in this world since this is the only life they have. Under such circumstances, the theory of Mutually Assured Destruction holds. Not so for the religious fanatics of Iran who believe that sacrificing themselves in destroying the infidels in the "House of War" will garner them 72 virgins in heaven. Iran has no interest in giving up its nuclear weapons program. Obviously, if they had no interest in nuclear weapons, they wouldn't have "peaceful civilian" nuclear plants in the first place. What energy needs are there that merit the construction of expensive, long-term nuclear plants in a country that has the world's third largest oil reserves of 136 billion barrels? Hence no matter how much diplomacy Obama uses, nothing is going to happen. They are far more likely to stall for time and re-engage Obama when they have the weapons, from a position of power. The lack of any achievement in Obama's diplomacy strategy seems to vindicate this.