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 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.