Activision Publishing, Inc.is an Americanvideo game publisherbased inSanta Monica, California.It serves as the publishing business for its parent company,Activision Blizzard,and consists of several subsidiary studios. Activision is one of the largest third-party video game publishers in the world and was the top United States publisher in 2016.[5]

Activision Publishing, Inc.
Formerly
  • Computer Arts, Inc.
  • (1979)
  • Activision, Inc.
  • (1979–1988; 1992–2000)
  • Mediagenic
  • (1988–1992)
Company typeSubsidiary
IndustryVideo games
FoundedOctober 1, 1979;45 years ago(1979-10-01)
Founders
Headquarters2701 Olympic Blvd,,
US
Area served
Worldwide
Key people
ProductsList of Activision video games
Parent
SubsidiariesSee§ Studios
Websiteactivision
Footnotes / references
[3][4]

The company was founded asActivision, Inc.on October 1, 1979, inSunnyvale, California,by formerAtarigame developers upset at their treatment by Atari in order to develop their own games for the popularAtari 2600home video game console. Activision was the first independent, third-party, console video game developer. Thevideo 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 ofInfocom.After a management shift, with CEOJim Levyreplaced byBruce Davis,the company renamed itself toMediagenicand branched out into business software applications. Mediagenic quickly fell into debt, and the company was bought for aroundUS$500,000byBobby Kotickand a small group of investors around 1991.

Kotick drastically revamped and restructured the company to get it out of debt: dismissing most of its staff, moving the company to Los Angeles, and reverting to the Activision name. Building on existing assets, the Kotick-led Activision pursued more publishing opportunities and, after recovering from its former financial troubles, started acquiring numerous studios and various types ofintellectual propertyover the 1990s and 2000s, among these being theCall of DutyandGuitar Heroseries. Aholding companywas formed as Activision's parent company to manage both its internal and acquired studios. In 2008, this holding company merged withVivendi Games(the parent company ofBlizzard Entertainment) and formed Activision Blizzard, with Kotick as its CEO. Within this structure, Activision manages numerous third-party studios and publishes all games besides those created by Blizzard. In October 2023,Microsoftacquiredparent company Activision Blizzard, maintaining that the company will continue to operate as a separate business. While part of the largerMicrosoft Gamingdivision, Activision retains its function as the publisher of games developed by their studios.

History

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Founding (1979)

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Co-founder David Crane in 2013

In 1976,Warner CommunicationsboughtAtari, Inc.fromNolan Bushnellto help accelerate theAtari Video Computer System(Atari VCS or later the Atari 2600) to market by 1977. That same year, Atari began hiring programmers to create games for the system. Prior to Warner's acquisition, the company did not award bonus pay to programmers who worked on profitable games,[6][7]nor credit the programmers publicly, to prevent them from being recruited by rival game companies.[8]Warner Communication's management style was also different from Bushnell's. According to developerJohn Dunn,Warner management treated developers as engineers rather than creative staff, creating conflicts with staff.[9]Atari's CEORay Kassar,named to that position following Warner's acquisition in 1978, was committed to keeping production costs minimal for Warner, according toDavid Crane,one of Atari'sprogrammers.[10]

In early 1979, Atari's marketing department circulated a memo listing the best-selling cartridges from the previous year to help guide game ideas.[10]Crane noted that the games he was fully responsible for had brought in over$20 millionfor the company but he was still only receiving a$20,000salary.[11]Out of a development staff of thirty-five, four programmers (Crane,Larry Kaplan,Alan MillerandBob Whitehead), had produced games that had accounted for 60% of Atari's sales.[10]

Crane, Kaplan, Miller, and Whitehead became vocal about the lack of recognition within the company and became known as the "Gang of Four".[11]The group met with Kassar in May 1979 to demand that the company treat developers asrecord labelstreated musicians, with royalties and their names on game boxes. Kaplan, who called the others "the best designers for the [2600] in the world", recalled that Kassar called the four men "towel designers" and claimed that "anybody can do a cartridge".[12]

The four made the decision to soon leave Atari and start their own business, but were not sure how to go about it.[11]In 1979, the concept ofthird-party developersdid not exist,[13]as software forvideo game consoleswere published exclusively by makers of the systems for which the games were designed;[14]thus the common thinking was that to make console games, one needed to make a console first.[10]The four decided to create their own independent game development company. They were directed by their attorney toJim Levy,who was at the time raisingventure capitalto get into the software business for early home computers. Levy listened to their plans, agreed with its direction, and helped the four to secure about$1 millionin capital fromSutter Hill Ventures.[11]They also checked with legal counsel on their plans to develop games for the Atari VCS, and included litigation fees in their capital investment.[10]

By August, Crane and Miller had left Atari, with Whitehead joining them shortly after.[12]Kaplan had also quit Atari in August, but initially decided not to join as he did not like the starting business plan; he came back later to join Activision that December.[15]Activision was formally founded on October 1, 1979, with Levy serving as CEO. The company was initially named "Computer Arts, Inc." while they considered a better title. The founders had thought of the name VSync, Inc., but feared that the public would not understand or know how to say it. Levy suggested combining "active" and "television" to come up with Activision.[16][17]

Early years (1980–1982)

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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,andBo xing.[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]

Ahead of the release of the first four games, Activision obtained space at the mid-year 1980Consumer Electronics Showto showcase their titles, and quickly obtained favorable press.[10]The attention afforded to Activision worried Atari, as the four's departure had already created a major dent in their development staff.[11]Atari initially tried to tarnish Activision's reputation by using industry press at CES to label those that took trade secrets as "evil, terrible people", according to Crane, and then later threatened to refuse to sell Atari games to retailers that also carried these Activision titles.[10]By the end of 1980, Atari filed a formal lawsuit against Activision to try to stop the company, claiming the four had stolen trade secrets and violatednon-disclosure agreements.[10]The lawsuit was settled by 1982, with Activision agreeing to pay royalties to Atari but otherwise legitimizing the third-party development model.[11][19]

Following the first round of releases, each of the founders developed their own titles, about once a year, over the first few years of the company.[11]While their 1980 games were modest hits, one of the company's first successful games wasKaboom!,released in 1981, which was Activision's first game to sell over a million units.[10]Activision's breakout title was 1982'sPitfall!,created by Crane. More than four million copies of the game were sold.[20]Near the end of 1982, Kaplan left Activision to work on the development of theAmigapersonal computer as he wanted to be more involved in hardware development.[21][10]

Carol Shawin 1983 with her award plaque for selling over 500,000 copies ofRiver Raidfor Activision

Total sales for Activision were estimated at$157 millionand revenues at$60 millionahead of its June 1983initial public offering;at this point Activision had around 60 employees.[11][10]Danny Goodmanstated inCreative ComputingVideo & Arcade Gamesin 1983, "I doubt that there is an active [Atari 2600] owner who doesn't have at least one Activision cartridge in his library".[22]The company completed its public offering in June 1983 on NASDAQ under the stock ticker AVSN.[11][23]

The video game market crash (1983–1988)

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The success of Activision, alongside the popularity of the Atari 2600, led to many more home consoles third-party developers as well as other home consoles. Activision produced some of its Atari games for theIntellivisionandColecoVisionconsoles, among other platforms.[24]However, several new third-party developers also arose, attempting to follow the approach Activision had used but without the experience they had; according to Crane, several of these companies were founded with venture capital and hired programmers with little game design experience off the street, mass-publishing whatever product the developers had made. This was a contributing factor to thevideo game crash of 1983.[11]

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 ($5compared to Activision's$40manufacturer'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 from$50 millionin mid-1983 to about$6–7 millionby the end of 1984, according to Levy, and they were forced to lay off staff, going from about 400 employees to 95 in that period.[25]Because of this, Activision decided that they needed to diversify their games onto home computers such as theCommodore 64,Apple,andAtari 8-bit computersto 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 on to formAccolade.[11][21]

With the video game crash making console game development a risky proposition, the company focused on developing for home computers with games likeLittle Computer PeopleandHacker,while Levy tried to keep expenditures in check as they recovered.[11]Looking to expand further, Activision acquired, through a corporate merger, the strugglingtext adventurepioneerInfocomin June 1986. This acquisition was spearheaded by Levy, who was a big fan of Infocom's titles and felt the company was in a similar position as Activision.[21]About six months after the "Infocom Wedding", Activision's board decided to replace Levy withBruce Davis.Davis was against the purchase of Infocom from the start and was heavy-handed in its management,[26]and even attempted to seek a lawsuit to recover their purchase from Infocom's shareholders.[11]Crane also found Davis difficult to work with and was concerned with how Davis managed the closure ofImagic,one of the third-party development studios formed after Activision's success in 1981.[11]Crane left Activision in 1986 and helpedGarry KitchenfoundAbsolute Entertainment.[11]In late 1986, Activision adopted the Electric Dreams brand, usually used for British software, for titles outside of English for the American market.[27]

Mediagenic (1988–1991)

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Mediagenic's former headquarters in Menlo Park,c. 2021[28]

In 1988, Activision began involvement in software besides video games, such as business applications. As a result, Activision changed its corporate name toMediagenicto better represent all of its activities.[29][11]

Mediagenic consisted of four groups:

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'sSilicon Valleyheadquarters. Five of them accepted this offer.[26]

Notably during this time, Mediagenic was known to have worked on the early version of a football game that would be the basis forJoe Montana Football.Sega of America's Michael Katz had been able to get Sega to pay Mediagenic around early 1990 to develop this into the branded version after securing the rights toJoe Montana's name, but was unaware of internal troubles that had been going on within the company, which had left the state of the game mostly unfinished. Katz and Sega were forced to take the incomplete game toElectronic Arts,which had been developing its ownJohn Madden Footballseries for personal computers, to complete the game.[30]

During this period Mediagenic, via Activision, secured the rights to distribute games fromCyan Worlds.The first game published by Activision from Cyan wasThe Manhole,onCD-ROMfor personal computers, the first major game distributed in this format.[31][32][10]

Purchase by Bobby Kotick (1991–1997)

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Davis' management of Mediagenic failed to produce a profitable company; in 1991, Mediagenic reported a loss of$26.8 millionon only$28.8 millionof revenue and had over$60 millionin debt.[11][33]This debt included a$6 millionpenalty against Mediagenic in May 1990 after losing patent infringement lawsuits filed against it byMagnavoxover the similarities of Activition's games to Magnavox's patents.[34]Cyan severed their contract with Activision, and turned toBroderbundfor publishing, including what would become one of the most significant computer games of the 1990s,Myst.[33]

Bobby Kotick

Bobby Kotickhad become interested in the value of the video game industry following the crash, and he and three other investors worked to buyCommodore Internationalin an effort to gain access to theAmigaline of personal computers. After failing to complete purchase, the group bought a company that licensedNintendocharacters, and through Nintendo was directed to the failing Mediagenic.[35]Kotick was drawn to buy out Mediagenic not for its current offerings but for the Activision name, given its past successes withPitfall!,with hopes to restore Activision to its former glory.[36]After failing to negotiate a purchase with Davis, Kotick and additional investors bought Mediagenic in ahostile takeoverfor approximately$500,000in 1991. This group of investors included real estate businessmanSteve WynnandPhilips Electronics.[34][37][35]

Kotick became CEO of Mediagenic on its purchase and made several immediate changes: He let go of all but 8 of the companies' 150 employees, performed a full restructuring of the company, developed a bankruptcy restructuring plan, and reincorporated the company in Los Angeles, California.[19]In the bankruptcy plan, Kotick recognized that Mediagenic still had valuable assets, which included the Infocom library as well as its authoring tools to make games, Activision's distribution network, and licenses to develop on Nintendo and Sega home consoles.[33]Kotick offset some debt by giving stock in the company to its distributors as to keep them vested in the company's success; this included convincingPhilips Electronics,Magnavox's parent company, to convert their legal debt into stock in Activision.[34][33]Kotick also had the company reissue several of its past console and Infocom titles as compilations for personal computers. Kotick had also recognized the value of theZorkproperty from Infocom, and had the company develop a sequel,Return to Zork.Combined, these steps allowed Mediagenic to fulfill on the bankruptcy plan, and by the end of 1992, Kotick renamed Mediagenic to the original Activision name.[33]The new Activision went public in October 1993, raising about$40 million,[19]and was listed on NASDAQ under its new ticker symbolATVI.[37]

By 1995, Kotick's approach had met one promise he made to investors: that he would give them four years of 50% growth in revenues while remaining break-even. Reaching this goal, Kotick then set Activision on his second promise to investors, to develop high-demand games and make the company profitable by 1997.[33]

Activision published the first-person perspectiveMechWarriorin 1989, based onFASA's pen-and-paper gameBattleTech.A sequel,MechWarrior 2,was released in 1995 after two years of delays and internal struggles, prompting FASA not to renew their licensing deal with Activision. To counter, Activision released several more games bearing theMechWarrior 2name, which did not violate their licensing agreement. These includedNetMech,MechWarrior 2: Ghost Bear's Legacy,andMechWarrior 2: Mercenaries.The entireMechWarrior 2game series accounted for more thanUS$70 millionin sales.

Activision procured the license to another pen-and-paper-basedwar game,Heavy Gear,in 1997.The video game versionwas well received by critics, with an 81.46% average rating onGameRankingsand being considered the best game of the genre at the time byGameSpot.TheMechwarrior 2engine was also used in other Activision games, including 1997'sInterstate '76and 1998'sBattlezone.

Growth and acquisitions (1997–2008)

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With several of its own successfully developed games helping to turn a profit, Kotick led Activision to start seeking acquisitions of video game development studios, guided by market surveys to determine what areas of content to focus on.[35]It is estimated that between 1997 and 2008, Activision made 25 acquisitions, several for undisclosed amounts. Several of these came prior to 2001, in the midst of theDot-com bubble,enabling the company to acquire studios at a lower valuation.[35]On June 16, 2000, Activision reorganized as aholding company,Activision Holdings, to manage Activision and its subsidiaries more effectively.[38]Activision changed its corporate name from "Activision, Inc." to "Activision Publishing, Inc.", while Activision Holdings took Activision's former "Activision, Inc." name.[38]Activision Publishing became a wholly owned subsidiary of Activision, which in turn became the publicly traded company, with all outstanding shares of capital stock converted.[38][39]

Some of the key acquisitions and investments made by Activision in this period include:

  • Raven Software:Raven was founded in 1990; because of their close proximity, Raven frequently collaborated withid Software,and one of the studio's early successes was theHereticseries using id'sDoom engine.Around 1997, Raven's founders Brian and Steve Raffel felt the need to seek a parent company. They arranged a publishing deal with Activision in 1997, which not only served to provide Raven additional financial support, but also gave Activision the opportunity to work closely with id Software and gain business relationships with them.[40]By the end of 1997, Activision acquired Raven as one of its first subsidiaries under Kotick.[41]The acquisition price was $12 million.[42]
  • Neversoft:Prior to its acquisition in 2000, Activision had arranged a development deal with Neversoft to re-developApocalypse,a title that failed to be completed within Activision. Subsequently, Activision had Neversoft work on a prototype for askateboardinggame, which would end up becoming the first in theTony Hawk'sseries of skateboarding video games.Tony Hawk's Pro Skaterwas a critical success, leading Activision to acquire Neversoft in April 2000.[43]After eight games, the series has brought in$1.6 billion.[19]
  • Infinity Ward:AfterElectronic ArtsreleasedMedal of Honor: Allied Assaultin 2002, several of the developers from2015, Inc.,disenchanted with their current contracts, left to form a new studio, Infinity Ward. Kotick himself provided the group with startup funding, as they were seeking to develop a similar title toMedal of Honor.Activision acquired the studio for$5 millionin January 2003, and later publish their first title,Call of Duty,directly competing with Electronic Arts.[19]TheCall of Dutyseries has since seen nearly yearly releases and as of 2016 had sold more than 250 million units and brought in more than$12 billionin revenue.[44]
  • Treyarch:The Santa Monica, California studio was founded in 1996. With the success of the firstTony Hawkgame from Neversoft, Activision used Treyarch to assist in furtherTony Hawkgames as well as to develop titles using Activision's license ofMarvel'sSpider-Man.Activision acquired the studio in 2001 for about$20 million.[45]Following the success ofCall of Dutyfrom Infinity Ward, Activision moved Treyarch to assist in the series' development, trading off each year' major release between the two studios.
  • Gray Matter Studios:While Gray Matter was originally founded in 1993 as Xatrix Entertainment, it was rebranded to Gray Matter in 1999 as they began work onReturn to Castle Wolfenstein,in conjunction withNerve Softwareand oversight by id Software who owned theCastle WolfensteinIP. Activision, the game's publisher, acquired a portion of Gray Matter's stock during this time.Return to Castle Wolfensteinwas a critical and financial success, and led Activision to acquire the remaining shares of Gray Matter in 2002 for about$3.2 million,[46]with the intent to help Infinity Ward expand out theCall of Dutyfranchise. In 2005, Activision made the decision to merge the smaller Gray Matter into the larger Treyarch to put their combined talents towardsCall of Duty 3.[47]
  • RedOctane:Around 2005, Red Octane was co-developingGuitar Hero,a console game based on the arcade gameGuitarFreaks,withHarmonix;Harmonix was developing the software while RedOctane developed the instrument controllers.Guitar Herowas a major success. Activision purchased RedOctane for nearly$100 millionin June 2006. The series has since earned more than$2 billionin revenues.[19]
  • Toys for Bob:Toys for Bob was founded byPaul Reiche III,Fred Ford,and Terry Falls in 1989 and gained success in developing the first twoStar Controlgames, and later made film-to-video game adaptions. Activision purchased the studio in 2005, and had given them work on some of theTony Hawk'sgames as well as other licensed properties.[48]Following Activision's merger with Vivendi, Activision gained theSpyrointellectual property and assigned Toys for Bob to develop the series in a new direction, leading to thetoys-to-lifeSkylandersseries.[49]

Merger with Vivendi Games (2008)

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While Activision was highly successful with its range of developers and successful series, Kotick was concerned that they did not have a title for the growingmassively multiplayer onlinemarket, which presented the opportunity for continued revenues from subscription models and microtransactions instead of the revenue from a single sale. Around 2006, Kotick contactedJean-Bernard Lévy,the new CEO ofVivendi,a French media conglomerate. Vivendi had a games division,Vivendi Games,that was struggling to be viable at the time, but its principal feature was that it ownedBlizzard Entertainmentand its highly successfulWorld of Warcraftgame, which was drawing in$1.1 billiona year in subscription fees. Vivendi Games also ownedSierra Entertainment.[19]

Lévy recognized Kotick wanted control ofWorld of Warcraft,and offered to allow the companies to merge, but only if Lévy held the majority shares in the merged group, forcing Kotick to cede control. Kotick fretted about this decision for a while, according to friends and investors. During this time in 2006–2007, some of Activision's former successful properties began to wane, such asTony Hawk's,so Activision boughtRedOctane,the publisher of theGuitar Herofranchise.[19]Kotick met with Blizzard's presidentMike Morhaime,and learned that Blizzard also had a successful inroad into getting their games into China, a potentially lucrative market. Given this potential opportunity, Kotick agreed to the merger.[19]

Activision's board signed on to the merger by December 2007.[50]The merger was completed in July 2008. The new company was calledActivision Blizzardand was headed by Kotick, while Vivendi maintained a 52% share in the company.[19][51]The new company was estimated to be worthUS$18.9 billion,ahead ofElectronic Arts,which was valued atUS$14.1 billion.[52]

Post-merger developments (2009–2022)

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Activision Publishing remains a subsidiary of Activision Blizzard following the merger, and is responsible for developing, producing, and distributing games from its internal and subsidiary studios. Eric Hirshberg was announced as Activision Publishing's CEO in 2010.[39]

Activision Publishing establishedSledgehammer Gamesin November 2009. Formed earlier in 2009 byGlen SchofieldandMichael Condrey,formerVisceral Gamesleads that had worked onDead Space,Sledgehammer intended to develop aCall of Dutyspin-off title fashioned after the gameplay inDead Space.However, in early 2010,legal issues between Infinity Ward and Activision Blizzardled to several members of Infinity Ward leaving, and Activision assigned Sledgehammer to assist Infinity Ward in the next majorCall of Dutytitle,Modern Warfare 3.[53]Since then, Sledgehammer, Infinity Ward, and Treyarch share development duties for the flagship series, with support from Raven and other studios as necessary.

In February 2010, Activision Blizzard reported significant losses in revenue stemming from a slow down inGuitar Herosales and from its more casual games. Subsequently, Activision Publishing shuttered Red Octane,LuxofluxandUnderground Developmentas well as laid off about 25% of the staff at Neversoft.[54][55]Within the same year, Activision shutteredBudcat Creationsin November 2010, andBizarre Creationsin February 2011.[56][57]

Hirshberg left the CEO position in March 2018.[58]

Into the 2020s, Activision put more focus on theCall of Dutyfranchise, including the release of the free-to-playCall of Duty: Warzonein 2020. By April 2021, the company had assigned all of its internal studios to work on some part of theCall of Dutyfranchise.[59]This includes a new studio, Activision Mobile, devoted to theCall of Duty Mobiletitle as reported in August 2021.[60][61]

In 2021, while all their employees wereworking remotelyduring theCOVID-19 pandemic,Activision and its parent Activision Blizzard vacated their longtime headquarters building in Santa Monica and ended their lease withBoston Properties.In September 2021, they subleased a much smaller office space in Santa Monica at the Pen Factory (a formerPaper Matefactory) fromKite Pharma,which had leased the space from Lincoln Property Company.[62]

Purchase by Microsoft (2023–present)

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With theacquisition of Activision BlizzardbyMicrosoftin October 2023, Activision Blizzard as a whole, including the Activision Publishing subdivision, became a separate division under theMicrosoft Gamingarm of Microsoft.[63]

On March 8, 2024, 600 ActivisionQAworkers in Texas, Minnesota and California unionized under theCommunication Workers of America(CWA), marking it as the largest union in the United Statesvideo game industry.[64]

On May 16, 2024, Activision announced the establishment ofWarsaw-based studio Elsewhere Entertainment, assembled for the development of a new narrative-basedAAAIP not associated with other Activision series likeCall of Duty.The studio comprises various developers associated with other narrative-driven gaming franchises such asThe Last of Us,Uncharted,The WitcherandFar Cryamong others; at the time of announcement they were recruiting more staff to create a "state-of-the-artand next-generation gaming experience ", as well as a franchise with" an enduring legacy that goes far beyond games. "[65]

In July 2024, theScreen Actors Guild-American Federation of Television and Radio Artists(SAG-AFTRA) actor labor union, which provides numerous video game voice actors, would initiate alabor strikeagainst a number of video publishers, including Activision, over concerns about lack ofA.I.protections which concern not only video game actors, but also the use of A.I to replicate an actor’s voice, or create a digital replica of their likeness.[66][67]

Studios

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Former studios

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Notable games published

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Awards

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In 2003, the company was awarded theGame Developers Choice"First Penguin" award in recognition of its place as the first third-party developer.[85]

See also

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References

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  • Schreier, Jason (2024).Play Nice: The Rise, Fall and Future of Blizzard Entertainment.Grand Central Publishing.ISBN9781538725429.
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