Outsiders and even most within the gaming industry never hear the details of game development contracts between studios and publishers. Through a series of unfortunate events, perhaps even some misrepresentations and a lawsuit, everyone is given insight into these contracts and negotiations.

Spark Unlimited, the independent studio behind Call of Duty: Finest Hour, has filed a $10 million lawsuit against Activision accusing the publisher of breach of contract, fraud, theft of ideas and stealing of employees. Gamespot has obtained a copy of the lawsuit and is currently running a great article detailing the case.

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As this case proceeds, everyone should remember a few things:

Microsoft and Sony are clearly in a race to win the hardcore gamer. This has accelerated the console timeline and is pushing console prices up. In the end, the PS3 and 360 will likely match up very closely in overall functionality. One will have a slight edge in some areas, and the other will “best” remaining areas.

Should the PS3 and the Xbox 360 each include a hard drive and wireless bridge standard? How about other features? Not necessarily; it depends on who exactly is being targeted. By including these additional features, the price of each console will increase drastically.

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The important thing to remember is that the industry needs to pay attention to the casual gamer if it wants to substantially grow fixed game sales. By segmenting the consoles, Microsoft has begun to do this. The “full package” will still be available to for the typical gamer, but a cheaper version that meets the needs of the casual gamer will also be available.

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The market continues to say that Microsoft and Sony are both doing a great job of supporting their developers, but both companies still appear very hardware and technology focused. Nintendo on the other hand has always taken a more holistic approach to console design by looking at what makes games fun and improving on that.

Nintendo did lose significant ground in the current generation, but we are looking forward to seeing the continuation of features like the Bongo Drum Controller.

Will Sony miss the boat with casual gamers? Does Nintendo or Microsoft have the best approach for targeting both hardcore and casual gamers? Only time will tell, but we would love to hear your opinions…