Video game giant Activision has reached a settlement with the creators of the hit Call of Duty game series following a bitter legal battle over the dismissal of the two men who created the original game and the millions of dollars in royalties they claimed were owed to them.

Jason West and Vincent Zampella, former heads of game studio Infinity Ward, and game publisher Activision announced Thursday that the case has been settled out of court. Financial terms and details of the deal were not disclosed.

West and Zampella founded Encino, Calif.-based Infinity Ward, the developer behind the original Call of Duty and other instalments of the massively popular war games franchise.

Upon its release in November 2009, Call of Duty: Modern Warfare 2 broke first-day sales records and raked in an estimated $310 million US in North America and the United Kingdom alone. The company estimated that it sold about 4.7 million copies of the game in the first 24 hours in those two markets (the game was also released worldwide). At the time, Activision called it "the biggest launch in history across all forms of entertainment."

Subsequent instalments of the franchise — Call of Duty: Black Ops and Call of Duty: Modern Warfare 3 — also set first-day sales records.

Activision, which acquired the game studio in 2003, fired the duo in March 2010. 

Claiming they were terminated just weeks before they were set to receive royalties for the smash hit Call of Duty: Modern Warfare 2, the duo launched a wrongful dismissal lawsuit against Activision, initially seeking $36 million US in damages and royalty payments. They later raised the claim to more than $1 billion US.

Dozens of game developers chose to follow West and Zampella when they left Activision. The two men then formed a new studio — Respawn Entertainment — and signed a deal to develop games for rival publishing and distribution firm Electronic Arts (EA).

Activision responded by launching a countersuit against EA, alleging that the competitor had unfairly recruited executives under contract. That lawsuit was settled in May.

Neither Activision nor a lawyer representing Ward and Zampella would comment Thursday. However, EA described the latest settlement as a victory for industry creators.

"Activision's refusal to pay their talent and attempt to blame EA were absurd," the company said in a statement. "This settlement is a vindication of Vince and Jason and the right of creative artists to collect the rewards due for their hard work."