Most times when a tech company decides to enter the video game industry by developing a home console, that company will publish games that are exclusive to their console. Nintendo is the home of Mario, PlayStation is the home of God of War, Xbox is the home of Halo. This was the standard back in the late seventies and early eighties. That is, until Activision came along. The founders of that company did something that has never been done before, and it reframed the relationship between game publishers and game developers in a huge way.
The origin of Activision can be traced back to the moment when Warner bought Atari from its founder Nolan Bushnell. In my article about the history of Atari, I wrote that Bushnell had huge success in the early seventies but financial troubles in the late seventies. To salvage the company, Bushnell decided to sell to Warner, which would help fund the development of the Atari 2600, but after Bushnell became less involved in Atari and Warner became more hands-on, the company began treating their employees differently. The programmers responsible for creating Atari’s games no longer felt like creative pioneers on the cusp of an exciting new industry. They felt more like disrespected engineers who did the bidding of a giant corporation, to the point where Atari’s programmers never even got credited publicly (video games didn’t have end credits in those days), which was Atari’s way of making sure their rivals didn’t know who to poach. Warren Robinett, the designer of the Atari 2600 game Adventure, famously hid his name in that game as an Easter egg for players to find without Atari’s knowledge, which is the perfect example of how contentious Atari’s relationship with their programmers was.
On top of that, four Atari programmers named David Crane, Larry Kaplan, Alan Miller and Bob Whitehead were not making a fair amount of money for being the people responsible for the majority of Atari’s best-selling video games, and when Atari CEO Ray Kassar refused to compensate them, the group of four decided to quit Atari and found their own game development company, which was easier said than done because these programmers were about to embark on a journey that no one else in the video game industry ever embarked on. They were essentially the first third-party video game developers in history, third-party companies basically being independent software companies that don’t work exclusively for any one hardware company, and often work with multiple hardware companies at once. Although at that time, no one even knew how it was possible for a company to make an Atari game if the company that was making it wasn’t Atari. But with help from former music industry executive Jim Levy, who was looking to capitalize on the popularity of video games, the former Atari programmers were able to secure about a million dollars in equity from a venture capital firm for tech start-ups. In 1979, Crane, Miller and Whitehead left Atari and, along with their new CEO Jim Levy, founded Computer Arts, Inc., later changed to Activision under the suggestion of Levy who combined the words “active” and “television.” With a name like that, they were off to a good start.
Because Activision’s co-founders had experience making games for Atari, it was easy for them to develop their own games for Atari consoles. The difference between making Atari games for Atari and making Atari games for yourself being the creative freedom. And yes, Activision games actually credited their programmers.
The three programmers each started out making their own Atari 2600 games for Activision, some of the first being Bob Whitehead’s Boxing (1980), Skiing (1980) and Stampede (1981), Alan Miller’s Checkers (1980), Ice Hockey (1981) and Tennis (1981) and David Crane’s Dragster (1980), Fishing Derby (1980), Freeway (1981) and Laser Blast (1981). One of Activision’s earliest hits was Kaboom! (1981), designed by Larry Kaplan, similar to Atari’s 1978 arcade game Avalanche. It was the first Activision game to sell over a million units.
Activision’s games got favorable attention from the gaming community and Atari reacted predictably by trying to sue Activision for stealing their trade secrets and threatening to dissociate with the company, but there was nothing Atari could do legally to delegitimize the existence of third-party developers, so Activision moved forward.
In 1982, the company had its first major hit on their hands with Pitfall!, an adventure platformer for Atari 2600 at a time when good adventure platformers were rare. Pitfall! put you in control of an explorer named Pitfall Harry who must navigate a jungle and collect treasure while swinging on vines, jumping over crocodiles and avoiding obstacles like quicksand, fire and rolling logs. It was one of the best-selling Atari 2600 games of all time (the second-best after Pac-Man) and it was a top-seller for weeks from 1982 to 1983, so popular that it was ported to Commodore 64, ColecoVision, Intellivision, Apple II and MSX.
Other successful games from Activision at this time include space combat game Starmaster (1982), scrolling shooter River Raid (1982), racing game Enduro (1983), puzzle strategy game Hacker (1985) and social sim Little Computer People (1985).
Activision’s success inspired the creation of many more third-party developers run by people with less experience, and the influx of amateur companies was a contributing factor to the video game crash of 1983. Activision was one of many companies that felt the impact of the crash, shrinking from 400 employees to 95 employees to save money, in addition to expanding their hardware clientele, although Alan Miller and Bob Whitehead eventually left due to their stock devaluation and in 1984 they went on to found Accolade, the software company known for making games like Hardball!, Test Drive, Star Control and the Bubsy series before they went under in 2000. David Crane also left in 1986 to help Garry Kitchen get his video game company Absolute Entertainment off the ground. Absolute Entertainment had some success with games like A Boy and His Blob: Trouble in Blobolonia (1989) and Battle Tank (1990) both for the Nintendo Entertainment System, but the company would go bankrupt in 1995.
After the departure of Activision’s founders, the rest of the company’s history is very conglomerate. In 1988, Activision’s corporate name changed to Mediagenic, which had four divisions: video game publisher Activision, text adventure game developer Infocom (which they acquired in 1986), sports game developer Gamestar and business application software company Ten Point O. But Mediagenic failed to be profitable and it ended up being salvaged by businessman Bobby Kotick, who bought the company out of interest in Activision’s past success with Pitfall!, which Kotick hoped to replicate the success of, as well as all the other properties he now owned like Infocom’s Zork series. Kotick restored Mediagenic’s name back to Activision in 1992 and helped grow the company to a huge success by the end of the nineties, mostly by acquiring other companies such as Raven Software, Neversoft, Treyarch, Gray Matter Interactive, Infinity Ward, Toys for Bob and RedOctane.
In 2008, in order to get a foothold on the massively multiplayer online market, Activision merged with Vivendi Games, owner of World of Warcraft developer Blizzard Entertainment, to form Activision Blizzard, which is now one of the most valuable game companies thanks to titles like Blizzard’s Warcraft and Overwatch, and Infinity Ward’s Call of Duty series. Initially formed as a way of bypassing the limitations of first-party developers, Activision is now one of the biggest third-party video game companies in the world.