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The company was founded as Activision, Inc. on October 1, 1979 in Sunnyvale, California, by former Atari game developers upset 🌧️ at their treatment by Atari in order to develop their own games for the popular Atari 2600 home video game 🌧️ console. Activision was the first independent, third-party, console video game developer. The video game crash of 1983, in part created 🌧️ by too many new companies trying to follow in Activision's footsteps without the experience of Activision's founders, hurt Activision's position 🌧️ in console games and forced the company to diversify into games for home computers, including the acquisition of Infocom. After 🌧️ a management shift, with CEO Jim Levy replaced by Bruce Davis, the company renamed itself to Mediagenic and branched out 🌧️ into business software applications. Mediagenic quickly fell into debt, and the company was bought for around US$500,000 by Bobby Kotick 🌧️ and a small group of investors around 1991.

Founding (1979) [ edit ]

Activision began working out of Crane's garage in the 🌧️ latter half of 1979, each programmer developing their own game that was planned for release in mid-1980, Dragster, Fishing Derby, 🌧️ Checkers, and Boxing.[10] The four's knowledge of the Atari 2600, as well as software tricks for the system, helped them 🌧️ make their own games visually distinct from Atari-produced games.[11] To further distinguish themselves, Activision's boxes were brightly colored and featured 🌧️ an in-game screenshot on the back cover.[11] Instruction manuals for games devoted at least one page to credit the developer. 🌧️ Additionally, for nearly all of Activision's games through 1983, the instruction manuals included instructions for sending the company a photograph 🌧️ of a player's high scores to receive a patch in return.[18]

For Activision, while they survived the crash, they felt its 🌧️ effects in the following years. These third-party developers folded, leaving warehouses full of unsold games, which savvy retailers purchased and 🌧️ sold at a mass discount ($5 compared to Activision'sR$40 manufacturer's suggested retail price). While there was still a demand for 🌧️ Activision games, uneducated consumers were more drawn to the heavily discounted titles instead, reducing their income.[11] Their quarterly revenue dropped 🌧️ fromR$50 million in mid-1983 to aboutR$6–7 million by the end of 1984, according to Levy, and were forced to lay 🌧️ off staff, going from about 400 employees to 95 in that period.[26] Because of this, Activision decided that they needed 🌧️ to diversify their games onto home computers such as the Commodore 64, Apple, and Atari 8-bit family to avoid completely 🌧️ going out of business like other third-party developers.[11] There still was a drain of talent through 1985 from the crash. 🌧️ Miller and Whitehead left in 1984 due to the large devaluation of their stock and went to form Accolade.[11][22]

In 1989, 🌧️ after several years of losses, Activision closed down the Infocom studios, extending to only 11 of the 26 employees an 🌧️ offer to relocate to Activision's Silicon Valley headquarters. Five of them accepted this offer.[27]