Activision

In 1979, four Atari programmers did something unprecedented: they quit and started their own company to publish games for Atari’s console. Atari sued. Activision won. The victory established that anyone could make games for any platform—creating the third-party publishing model that still defines the industry.

Fast facts

Founded: October 1979 by David Crane, Larry Kaplan, Alan Miller, and Bob Whitehead.
The grievance: Atari refused to credit programmers; top talent earned no royalties.
First releases: Dragster, Fishing Derby, Checkers, Boxing (1980).
Breakthrough: Pitfall! (1982) sold over 4 million copies.
Legal victory: Atari’s lawsuit failed; third-party publishing became legal precedent.
Modern form: merged with Blizzard (2008); acquired by Microsoft (2023).

The rebellion

Atari treated programmers as anonymous labour:

Games shipped without credits
No royalties regardless of sales
Warren Robinett hid his name in Adventure as protest
Top programmers generated millions but earned salaries

David Crane, whose games sold $20 million, received a $22,000 salary. When management sent a memo calling programmers “towel designers” (interchangeable commodity workers), the founders had enough.

The founding four

Each brought proven talent:

David Crane: Pitfall!, A Boy and His Blob, dozens of hits.
Larry Kaplan: Kaboom!, Air-Sea Battle systems.
Alan Miller: Robot Tank, Ice Hockey.
Bob Whitehead: Chopper Command, Stampede.

They knew how to make games. They just needed to sell them.

The lawsuit

The suit never reached judgment. Amazing Computing recorded the outcome in April 1988, in an aside casual enough to show it was common knowledge:

Activision made its name by pushing more color and detail out of the modest Atari VCS than anyone thought the machine was capable of (Atari showed its corporate gratitude by slapping Activision with a massive lawsuit, which was settled out of court — but that’s another story).

The distinction matters. A settlement is not a precedent. Third-party publishing became normal because Activision survived long enough to make it normal and because the settlement left it trading — not because a court ruled that console makers may not lock out competitors. The floodgates opened all the same: dozens of publishers followed, not all of them maintaining Activision’s quality, which fed the 1983 crash.

Pitfall!

David Crane’s Pitfall! became Activision’s defining moment:

Smooth animation unprecedented on 2600
255 screens of jungle exploration
20-minute time limit encouraged mastery
Over 4 million copies sold
Proved third-party games could be best-in-class

The home computer years

As consoles crashed, Activision pivoted:

Published for C64, Spectrum, Amiga, Atari ST
Little Computer People, Ghostbusters, Hacker
Maintained quality reputation through the 8-bit era
Transitioned to 16-bit and PC as markets shifted

Twenty-five cents for the source

One artefact carries the founding principle to its logical end. Ahoy!, December 1984:

Activision is offering C-64 users a chance to put Pitfall Harry on their screens for just 25¢. For that postage and handling fee they’ll send a copy of Programming Pitfall Harry by Pitfall creator David Crane. The booklet contains a short (102-line) program that will generate a moving Pitfall Harry, and instructions for customizing the program by changing the background scenery, the figure’s speed and color, and so on.

Tape your quarter to a piece of paper, please, and mail to Activision.

The company founded because programmers were denied credit sent children a type-in listing written by the author of its biggest game, for the price of a stamp, and told them to go and change it. That is the developers-as-artists argument stated in a form a twelve-year-old could act on.

Activision UK was also somebody else’s publisher

For much of the 8-bit era, Activision’s British arm distributed other houses’ catalogues — a role its own histories rarely record. ACE, October 1990, listing what it had handled:

Activision UK also handled System 3, Sierra On-Line and Lucasfilm games in the past, including: The Last Ninja, Leisure Suit Larry, Rescue on Fractalus, Koronis Rift, The Eidolon and Ballblazer.

So the British route to Lucasfilm’s celebrated 8-bit run, and to Sierra’s adventures, ran through Activision. As with Mindscape and Origin, the name on the British box is a poor guide to who made the game.

How it ended: Mediagenic

The entry jumps from “maintained quality reputation through the 8-bit era” to a 2008 merger, skipping the part where the company nearly died. ACE reported the state of it in October 1990:

Activision US had been renamed Mediagenic, and had lost nearly $20 million in the previous year.
It faced a $6 million bill after “losing a long and embittered court battle with Magnavox” — a Philips subsidiary that “successfully claimed copyright infringement on a video game from the early eighties”.
It had “spent millions of dollars buying prestigious adventure developer Infocom, only to close it down earlier this year”.
Mediagenic was believed to be up for sale, “but customers have been thin on the ground”.
Activision UK was down to two people by January 1991, the company having decided to concentrate on PC, NES and Game Boy.

Read that beside the founding story. Activision exists because four programmers refused to be treated as interchangeable, and because Atari’s attempt to sue them out of the market failed. Eleven years later the same company had been renamed after a marketing category, had lost a copyright case over a video game to the owner of the patents that started the industry, and had bought the most respected writers’ studio in the business to shut it.

ACE’s own verdict, and it is the right note: “The whole situation is very sad. Activision has sold some great games in the past.”

What the period press thought it was good at

The same piece is a useful corrective to a canon that remembers Pitfall! and little else. Its author rates the micro years above the console ones — “a switch to micros in the mid-80s brought even greater success” — and names Pastfinder as “classic”, Hero as “brilliant”, River Raid as “playable”, and Park Patrol as a personal favourite. It singles out Alter Ego and Little Computer People as “two of the most original computer games ever”, and Ghostbusters (1984) as “one of the best selling computer games ever”.

Legacy

Activision proved programmers had value. Their rebellion created the third-party ecosystem. Every independent developer owes something to those four programmers who walked out of Atari with nothing but their talent and won.

The first third-party publisher