Gamasutra - Features - The History Of Activision 10/13/11 3:13 PM The History Of Activision By Jeffrey Fleming The Memo When David Crane joined Atari in 1977, the company was maturing from a feisty Silicon Valley start-up to a mass-market entertainment company. “Nolan Bushnell had recently sold to Warner but he was still around offering creative guidance. Most of the drug culture was a thing of the past and the days of hot-tubbing in the office were over,” Crane recalled. The sale to Warner Communications had given Atari the much-needed financial stability required to push into the home market with its new VCS console. Despite an uncertain start, the VCS soon became a retail sensation, bringing in hundreds of millions in profits for Atari. “It was a great place to work because we were creating cutting-edge home video games, and helping to define a new industry,” Crane remembered. “But it wasn’t all roses as the California culture of creativity was being pushed out in favor of traditional corporate structure,” Crane noted. Bushnell clashed with Warner’s board of directors and in 1978 he was forced out of the company that he had founded. To replace Bushnell, Warner installed former Burlington executive Ray Kassar as the company’s new CEO, a man who had little in common with the creative programmers at Atari. “In spite of Warner’s management, Atari was still doing very well financially, and middle management made promises of profit sharing and other bonuses. Unfortunately, when it came time to distribute these windfalls, senior management denied ever making such promises,” Crane remembered. “Creative people don’t like to be lied to, and there was a revolt with many people leaving and others threatening to go. Job satisfaction in the whole engineering department was at an all time low,” he said. “At the same time, a memo was circulated from the marketing department showing the prior year’s cartridge sales, broken down by game as a percentage of sales. The intent of the memo was to alert the game development staff to what types of games were selling well,” Crane recalled. “This memo backfired however, as it demonstrated the value of the game designer individually. Video game design in those days was a one-man process with one person doing the creative design, the storyboards, the graphics, the music, the sound effects, every line of programming, and final play testing. So when I saw a memo that the games for which I was 100 percent responsible had generated over $20 million in revenues, I was one of the people wondering why I was working in complete anonymity for a $20,000 salary,” Crane said. The Gang of Four Crane wasn’t the only programmer who was dissatisfied with Atari’s management. Alan Miller had approached Atari’s executives with a contract proposal that would provide programmers with design credit and royalties on games only to be http://www.gamasutra.com/view/feature/1537/the_history_of_activision.php?print=1 Page 1 of 6 Gamasutra - Features - The History Of Activision 10/13/11 3:13 PM rejected by management. Larry Kaplan and Bob Whitehead were also looking for more recognition and fair compensation. Together they became known as the “Gang of Four”. “When we looked closely at that memo, we saw that as a group we were responsible for 60 percent of their $100 million in cartridge sales for a single year,” Crane recalled. “With concrete evidence that our contribution to the company was of great value, we went to the president of Atari to ask for a little recognition and fair compensation. Ray Kassar looked us in the eye and said, ‘You are no more important to Atari than the person on the assembly line who puts the cartridges in the box.’ After that it was a pretty easy decision to leave.” Start Up At the time, several programmers had already left Atari only to turn around and become independent contractors for the company, still producing games, but for double the money. The Gang of Four decided on an ambitious and much riskier move. They would start an independent development and publishing company producing games for Atari’s VCS console, something no one had attempted before. “To address company start-up issues we met with an attorney who, after hearing our story and our plans, suggested we meet with his friend [Jim Levy] who was ‘doing the same thing’,” Crane recalled. “Jim had been working at GRT Records and was in the process of raising VC money to go into business making cassette tape software for early computers like the Radio Shack TRS-80.” As Crane remembered, “We met with him over a barbecue at his house, and eventually became convinced that he had the marketing savvy and the business skills to run the company we had in mind. And it didn’t hurt that he was well into the VC fund raising process.” “Sutter Hill ventures found the exploding video game business of more interest than the slowly building home computer market, and Jim put together a business plan and funding package in relatively short order,” Crane explained. “At the time, VC firms didn’t invest in software. It was only the fact that cartridges for the Atari game system were physical, electronic components that made it understandable. They invested less than $1 million for controlling interest in a company that grew to $300 million in three years. Pretty good deal!” Crane said. Crane and Miller left Atari in August of 1979 and Activision was born. They quickly began programming a development system for Activision, working out of Crane’s apartment. Bob Whitehead and Larry Kaplan stayed at Atari for a short while longer before handing in their notices to join Activision. Atari soon realized their error in letting prime talent walk out the door. However, their first response was to try and sue the fledgling company out of existence, accusing them of copyright and patent infringement in a 1980 lawsuit. “Atari bought full-page magazine ads to try to paint us as criminals, when all we were doing was pursuing our chosen craft,” Crane remembered. Atari’s lawyers would continue to dog Activision over the next two years before their complaint was finally thrown out. Launch Activision’s first games, Dragster, Boxing, Fishing Derby, and Checkers hit the shelves in 1980. Packaged in vibrantly colored boxes, the company’s games made a strong impression at retail. “Brand consistency was always of major concern,” Crane said. “Jim wanted Activision games to stand out on the store shelves, while clearly belonging to the brand,” he explained. Activision’s policy of crediting the designer and providing a clear screenshot of the game on the back of the box also reassured consumers that they were getting a quality product. “We were always annoyed at fanciful artists’ renderings of the game screens on competitor’s packaging. We wanted there to always be a true screen shot on the outside of the package,” Crane said. The following year saw the release of Crane’s Freeway, Larry Kaplan’s Kaboom!, Bob Whitehead’s Stampede, and Alan Miller’s Ice Hockey. By 1982 the company was in top form, releasing Alan Miller’s Starmaster, Steve Cartwright’s Barnstorming, Crane’s Grand Prix, Carol Shaw’s River Raid, and Bob Whitehead’s Chopper Command. “Activision’s game http://www.gamasutra.com/view/feature/1537/the_history_of_activision.php?print=1 Page 2 of 6 Gamasutra - Features - The History Of Activision 10/13/11 3:13 PM designers were at the top of our field. We really knew how to make great games,” Crane said. “We went to great lengths to make our games better looking, and we did this with subtle details that few people could identify. We spent thousands of hours per year inventing new ways to make the Atari 2600 hardware perform in ways unimagined by its chip designers. But other techniques were so much simpler. We used only a subset of the color capability of the 2600 – only the bluest blue and greenest green. Where possible we bordered on-screen color changes with black pixels to reduce color bleed,” Crane remembered. “We were our most demanding critics, and we didn’t stop until the game was better looking than anything we had seen,” he said. Pitfall Harry 1982 was also the year that Activision released Pitfall!, one of its biggest hits and a game that would become the foundation for a new genre. “During the development of Pitfall! it was clear that we had something special,” Crane remembered. “The game was born from a desire to have the main character of the game be more human than the tanks, jet planes, drag racers, etc. of the past. But once you had a little man running, jumping, and climbing an entire universe of adventures were open to the game designer. People would walk up behind me during development, look at the screen with glazed-over eyes and brainstorm about all the ways this genre could go. Of course, I had to finish the first one and make it fun to play,” he said. Activision went public in 1983 and enjoyed an astonishing success. “The Activision of the late 70s and early 80s was a pretty special place,” Crane remembered. “Because we were riding a rocket, everyone wanted to work there. With the choice of the best and brightest we ended up with a company full of over-achievers. When Activision reached sales of $60 million, we had 60 employees. People have to work pretty hard for a company to have revenues of $1 million per employee.