Next-Gen learned from an ex-Activision Underground employee on Monday that Infinity Ward, developer of November' s CoD4, recently prompted a renegotiation of its contract with parent Activision so that the studio would be the sole developer of the FPS series.

Prior to the multi-million-selling CoD4: Modern Warfare, Infinity Ward developed the original CoD for PC in 2003, along with CoD2 in 2005. In an effort to capitalize on the immense popularity of the series on an annual basis, Activision gave internal studio Treyarch the responsibility to develop CoD3, which launched in 2006.

That strategy would' ve had the franchise alternating between studios every year, at the same time filling Activision' s coffers on an annual basis.

Treyarch will still be the developer behind the upcoming CoD5.

But the wormhole goes a bit deeper than that. The renegotiation of the contract between Activision and Infinity Ward is also linked to the shuttering of the 45-person Foster City, Calif.-based studio, Activision Underground, said our source, who wished to remain anonymous.

Underground was working on two projects--a port of Quake Wars (described as " late and over-budget" by our source) and a new CoD game.

But the new CoD game wasn' t going to be an FPS like previous franchise entries, rather a third-person action adventure game spin-off that would also become a yearly franchise on top of the original FPS-style series. That way, Activision would be able to potentially release two CoD titles per year.

However, with the renegotiation of the contract with star studio Infinity Ward, no other Activision studio is able to develop any CoD-branded game. This effectively canned Underground' s CoD adventure spin-off, leaving the doomed studio only the finishing touches on a late, over-budget port, and pretty much no reason to exist.

Activision confirmed that Underground will be completely shut down by the end of May.

Asked about the whispers on Monday, an artist at Infinity Ward apologized and said that he could not comment on the matter.

Activision PR had not responded to requests for comment as of press time.

Studio and department heads brought news of the contract negotiation to Activision employees' attention, our source said.