Electronic Arts Inc has reached a publishing and distribution deal with a new game studio formed by the creators of the Call of Duty franchise, which became a blockbuster for EA rival Activision Blizzard Inc.

The new development studio announced on Monday, Respawn Entertainment, was formed by Jason West and Vince Zampella, who led Activision's Infinity Ward studio until they were fired last month.

Zampella and West co-founded Infinity Ward, which was acquired by Activision in 2003. The studio developed the original Call of Duty game and several others in the series.

West and Zampella sued Activision after their dismissal, seeking $36 million in royalty payments and damages.

The company countersued, charging that the two men, among other things, negotiated with Activision's rivals while under contract and tried to prevent the company from compensating Infinity Ward employees in order to make them easier to poach when the men left to form their own studio.

Respawn said it is assembling a team of designers, artists and engineers to create games. EA was awarded exclusive worldwide publishing and distribution rights to future games.

In a statement, Activision said: This agreement comes as no surprise to Activision given the myriad of improper activities detailed in the cross-complaint filed on Friday against Jason West and Vince Zampella.

Shares of Redwood City, California-based Electronic Arts rose 3 cents to $19.39 in afternoon trading on the Nasdaq.

(Reporting by Gabriel Madway, editing by Gerald E. McCormick, Gary Hill)

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