Activision

Activision, formally Activision Publishing, Inc., is an American video game publisher headquartered in Santa Monica, California, and is the publishing business of its parent company Activision Blizzard alongside several subsidiary studios.¹¹³ Founded in 1979, it was the first independent third-party video game publisher, producing games for hardware it did not itself manufacture.⁶² It is home to franchises including Call of Duty, Crash Bandicoot, Tony Hawk’s Pro Skater, Spyro, and Skylanders.¹¹³

Origins and the Gang of Four

The company grew out of discontent at Atari in the late 1970s, after Atari’s sale to Warner Communications and the installation of former Burlington Industries executive Ray Kassar as chief executive brought a corporate culture that clashed with the company’s creative programmers.²¹² Atari’s founder, Nolan Bushnell, had clashed with Warner’s board and was forced out of the company he had founded in 1978.¹² The Warner-installed management imposed increased security to monitor employees and treated video-game designers with what programmer Warren Robinett described as indifference, keeping them anonymous to prevent them from gaining bargaining power.¹⁰

In early 1979, Atari’s marketing department circulated a memo listing the previous year’s cartridge sales broken down by game as a percentage of the total, intended to show designers what kinds of games sold.²⁵ According to programmer David Crane, four designers — Crane, Larry Kaplan, Alan Miller, and Bob Whitehead — recognized from the memo that they had been responsible for roughly 60 percent of Atari’s $100 million in cartridge sales for the year, yet earned salaries of around $20,000 to $22,000.¹²⁵ Crane and his colleagues believed the video-game industry should function more like the book, music, or film industries, where creative talent shared in a project’s success, rather than the toy industry it had modeled itself on, in which designers received a fixed salary and the company owned everything they produced.⁵

The group, later known as the “Gang of Four,” approached Kassar to ask for design credit and royalties.¹²⁵ Alan Miller had earlier put a contract proposal to Atari’s executives that would have given programmers design credit and royalties, only to be rejected.¹² Crane recalled that Kassar told them, “You are no more important to Atari than the person on the assembly line who puts the cartridges in the box,” and Kaplan told InfoWorld in 1983 that Kassar had dismissed them as “towel designers” who were “a dime a dozen”.¹²⁵⁹ Miller had joined Atari in February 1977 as one of the first four Atari 2600 game designers, and his VCS credits there included Surround, Hangman, and Basketball, along with co-authorship of the operating system for the Atari 400/800/1200 computers.⁶

Rather than become independent contractors, as several departed programmers had done in order to produce games for Atari at double the money, the four resolved to start their own development and publishing company producing games for Atari’s VCS console, something no one had attempted before.¹² Through an attorney they were introduced to Jim Levy, a former GRT Records executive who was raising venture capital to make cassette software for early computers such as the Radio Shack TRS-80, and they concluded over a barbecue at his house that he had the marketing savvy and business skills to run the company.¹² Sutter Hill Ventures found the exploding video-game business more attractive than the home-computer market and invested less than $1 million for a controlling interest, financing a company that would grow to $300 million within three years.¹²⁵ Crane and Miller left Atari in August 1979, working out of Crane’s apartment on a development system, while Whitehead and Kaplan followed shortly after.¹² Sources credit the founding to the four programmers together with Levy, and some accounts add venture capitalist Richard Muchmore.⁶¹³ The name Activision was chosen so the company would appear ahead of Atari in the telephone book.¹³

Early games and litigation

Having anticipated legal trouble, the founders checked with lawyers before starting and budgeted for a lawsuit when they sought backing.⁵ Atari sued the fledgling company in 1980, alleging copyright and patent infringement and taking out full-page magazine advertisements portraying the founders as criminals; Atari’s complaint was eventually thrown out after roughly two years.¹² Activision’s first games — Dragster, Boxing, Fishing Derby, and Checkers — reached shelves in 1980 in vibrantly colored boxes that credited the designer and showed a true screenshot of the game, a deliberate contrast to competitors’ artists’ renderings.¹² Crane recalled that brand consistency was a major concern for Levy, who wanted Activision games to stand out on store shelves while clearly belonging to the brand.¹²

The following year brought Crane’s Freeway, Kaplan’s Kaboom!, Whitehead’s Stampede, and Miller’s Ice Hockey, and 1982 saw Miller’s Starmaster, Steve Cartwright’s Barnstorming, Crane’s Grand Prix, Carol Shaw’s River Raid, and Whitehead’s Chopper Command.¹² Its first major hit, Pitfall!, arrived in 1982.¹³

Activision grew rapidly, reaching $159 million in revenue in 1983 — its third year of sales — and was described as the fastest-growing company in U.S. venture-capital history up to that time, a distinction later passed to Lotus and Compaq.⁶ Miller and Whitehead left in 1984 to co-found Accolade, which was purchased by Atari/Infogrames in 1999.⁶

Later corporate history

In 1988 the company renamed itself Mediagenic and diversified into other ventures, before reverting to Activision in 1992 and refocusing on video games.¹³ Over the following years it acquired numerous studios.¹³ In 2008 Activision merged with Vivendi Games — owner of Blizzard Entertainment — to form Activision Blizzard, headquartered in Santa Monica.¹³ Blizzard had grown from a company named Silicon & Synapse, founded in 1991 by University of California, Los Angeles graduates Allen Adham, Frank Pearce, and Mike Morhaime, which found fame with the 1994 PC game Warcraft: Orcs & Humans and later the World of Warcraft series launched in 2004.¹³ In 2013 Activision Blizzard bought out the majority stake held by Vivendi to become an independent company.¹³ It acquired Major League Gaming and King Digital Entertainment, maker of Candy Crush Saga, in early 2016, and had entered film and television in 2015 with Activision Blizzard Studios, whose first production was the animated Skylanders Academy series.¹³

Activision Blizzard’s businesses came to encompass Activision, Blizzard Entertainment, and King Digital Entertainment, with franchises including Call of Duty, World of Warcraft, Overwatch, Hearthstone, Diablo, and StarCraft.¹³¹⁶¹⁴ In calendar year 2016 the Newzoo ranking placed Activision Blizzard third among game companies worldwide by game revenue, at $4,593 million, behind Tencent and Sony.¹¹ Company revenue was reported at roughly $7.0 billion in 2017 and $7.5 billion in 2022.¹⁷¹⁴ The company holds a notable share of the U.S. video-game software publishing market, estimated at about 7.7 percent of total industry revenue.¹⁷

Microsoft announced an agreement to acquire Activision Blizzard for $68.7 billion, a deal that drew regulatory scrutiny over competition in the gaming market.¹³ As a subsidiary of Microsoft, Activision Blizzard is a gaming company that develops and publishes software for mobile devices, consoles, and personal computers, operates esports leagues and events, and reported roughly 13,000 employees.¹⁴

Activision itself remains based at Building B, 2701 Olympic Boulevard in Santa Monica, and its studios include Beenox, Demonware, Digital Legends Entertainment, Elsewhere Entertainment, High Moon Studios, Infinity Ward, Raven Software, Sledgehammer Games, Treyarch, and Activision Shanghai Studio.¹¹⁵ Its leadership is headed by president Rob Kostich.¹¹⁴

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