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Activision

From Alfawiki
Activision Publishing, Inc.
Company typeSubsidiary
IndustryVideo games
PredecessorComputer Arts, Inc.
FoundedOctober 1, 1979; 47 years ago (1979-10-01) in Sunnyvale, California, U.S.
FounderDavid Crane, Larry Kaplan, Alan Miller, Bob Whitehead
Headquarters
Santa Monica, California
,
United States
Area served
Worldwide
Key people
Bobby Kotick (CEO of parent company)
ProductsVideo games, publishing
ParentActivision Blizzard (subsidiary of Microsoft Gaming)

Activision Publishing, Inc. is a prominent American video game publisher based in Santa Monica, California. Operating as the publishing division of its parent company, Activision Blizzard, it supervises a variety of subsidiary development studios. Activision is recognized as one of the largest independent video game publishers worldwide and held the top position in the U.S. market during 2016.

The company was established on October 1, 1979, in Sunnyvale, California by ex-developers from Atari who sought improved working conditions. Activision became the pioneering independent third-party developer for console games. The video game crash of 1983, partly triggered by inexperienced rivals imitating Activision’s model, compelled the firm to diversify into home computer gaming and to acquire Infocom. Following a leadership change that replaced CEO Jim Levy with Bruce Davis, the company rebranded as Mediagenic, ventured into business software, but soon encountered financial difficulties.

In approximately 1991, Bobby Kotick and a group of investors purchased the company for around . Kotick implemented significant restructuring—reducing personnel, relocating headquarters to Los Angeles, and reinstating the Activision brand. Utilizing existing assets, Activision broadened its publishing scope and regained financial stability by acquiring various studios and intellectual properties through the 1990s and 2000s, including notable franchises such as Call of Duty and Guitar Hero. A holding company was formed to oversee both internal teams and acquired entities.

In 2008, this holding entity merged with Vivendi Games, the owner of Blizzard Entertainment, resulting in the creation of Activision Blizzard with Kotick as CEO. Within this framework, Activision manages third-party development studios and publishes all titles except those produced by Blizzard. In October 2023, Microsoft completed its acquisition of Activision Blizzard but preserved its operational independence; Activision continues to publish games for its studios under the broader umbrella of Microsoft Gaming.

Origins (1979)

In 1976, Warner Communications acquired Atari, Inc. to expedite the release of the Atari 2600 console. Atari employed programmers to create games but did not offer them bonuses or public acknowledgment, aiming to retain talent internally. Following Warner's takeover, management shifted focus from creative autonomy to treating developers as engineers. CEO Ray Kassar, appointed post-acquisition, emphasized strict cost management.

By early 1979, programmer David Crane observed that his games had generated over in revenue while his salary remained at . Four programmers—Crane, Larry Kaplan, Alan Miller, and Bob Whitehead—were responsible for approximately 60% of Atari’s sales. Known collectively as the "Gang of Four," they sought royalties and public credit comparable to musicians signed by record labels. Kassar rejected their requests, disparaging them as "towel designers" and minimizing their contributions.

Due to inadequate recognition and compensation, these four developers chose to leave Atari and create an independent game development company—a groundbreaking approach at a time when console manufacturers exclusively published software titles. With legal counsel from Jim Levy, who was seeking venture capital for software startups, they secured roughly from Sutter Hill Ventures, which also covered potential legal expenses.

By August 1979, Crane, Miller, and Whitehead had departed Atari; Kaplan followed later that year. The company was officially founded on October 1, 1979, initially under the name "Computer Arts, Inc." before adopting "Activision," a name proposed by Levy that combined "active" and "television." Levy assumed the role of CEO, steering the new firm toward third-party game development for the Atari 2600 system.

Early years (1980–1982)

Activision originated in late 1979 within Crane's garage, where each co-founder developed a game slated for release in mid-1980: Dragster, Fishing Derby, Checkers, and Boxing. Their extensive expertise with the Atari 2600 allowed them to produce games with distinctive visual styles. Activision set itself apart by packaging games in vivid boxes showcasing screenshots and including manuals that credited the developers by name. These manuals also encouraged players to submit high scores in exchange for reward patches, thereby enhancing customer interaction.

Prior to launching these titles, Activision presented them at the 1980 Consumer Electronics Show, receiving positive media attention that alarmed Atari. Initially, Atari attempted to undermine Activision’s reputation and later intimidated retailers who stocked Activision products. By the close of 1980, Atari filed a lawsuit against Activision alleging theft of trade secrets and breach of nondisclosure agreements. This legal dispute concluded in 1982 with Activision agreeing to pay royalties but establishing the precedent for legitimate third-party game development.

After their initial releases, each founder continued producing new titles on an annual basis. While early games achieved moderate success, 1981’s Kaboom! became Activision’s first title to surpass one million units sold. The company’s major breakthrough came in 1982 with Crane’s creation Pitfall!, which exceeded four million copies sold. Toward the end of 1982, Kaplan departed to focus on hardware innovation with the Amiga personal computer.

By June 1983, just before its initial public offering, Activision reported estimated sales reaching $157 million and revenues totaling $60 million, with a workforce of approximately 60 employees. Industry analysts observed that nearly every Atari 2600 owner possessed at least one Activision game. The company went public on NASDAQ in June 1983 under the ticker symbol AVSN.

The video game market crash (1983–1988)

The early achievements of Activision on the Atari 2600 inspired numerous third-party developers and prompted the introduction of new consoles such as Intellivision and ColecoVision. However, many newcomers—often venture-backed and staffed by inexperienced programmers—produced a glut of low-quality games. This oversupply played a major role in triggering the video game crash of 1983.

Although Activision managed to endure the crash, its financial health deteriorated significantly. Retailers were inundated with discounted inventory from failing developers (selling for about $5 compared to Activision’s $40 list price), which diverted consumer spending away from Activision’s offerings. Quarterly revenue declined sharply from $50 million in mid-1983 to roughly $6–7 million by late 1984, resulting in workforce reductions from 400 employees down to 95.

To reduce exposure, Activision redirected its focus toward home computer markets including Commodore 64, Apple, and Atari 8-bit platforms. Founders Miller and Whitehead exited in 1984 amid stock price declines and subsequently founded Accolade.

During this challenging era, Activision concentrated on titles such as Little Computer People and Hacker, while maintaining strict cost control under CEO Levy. In June 1986, the company expanded through a merger acquiring Infocom, a leader in text adventure games—a strategic decision championed by Levy who recognized synergies between the two firms.

However, six months after the acquisition, Levy was replaced by Bruce Davis as CEO; Davis opposed the Infocom deal and took an aggressive stance toward managing it, including initiating legal proceedings against Infocom shareholders. His leadership style also generated internal tensions; co-founder Crane left in 1986 to establish Absolute Entertainment.

In late 1986, Activision launched the Electric Dreams label to distribute British software titles outside English-speaking markets, marking an effort to extend its international presence during a turbulent period for the industry.

Mediagenic Era (1988–1991)

In 1988, Activision broadened its scope beyond gaming software to include business applications, leading to a corporate name change to Mediagenic to better represent its diversified offerings.

Mediagenic was structured into four main divisions:

By 1989, ongoing financial difficulties forced Mediagenic to close Infocom’s development studios, transferring only 11 out of 26 employees to its Silicon Valley base; five accepted the relocation offer.

During this timeframe, Mediagenic created an early football game prototype that eventually evolved into Joe Montana Football. Around 1990, Sega of America contracted Mediagenic to develop this title; however, internal challenges prevented completion. As a result, Sega turned to Electronic Arts, renowned for its John Madden Football series, to finalize the game.

Mediagenic also obtained publishing rights from Cyan Worlds, releasing The Manhole on CD-ROM—the first major title distributed via this medium—signifying a strategic entry into emerging digital formats.

Acquisition by Bobby Kotick (1991–1997)

Under Davis’s leadership, Mediagenic faced significant financial setbacks, reporting losses on revenue in 1991 and accumulating substantial debt, including penalties from patent infringement cases brought by Magnavox. Consequently, Cyan terminated its publishing agreement with Activision and partnered with Broderbund for titles like Myst.

Entrepreneur Bobby Kotick identified potential in the Activision brand despite Mediagenic's struggles. Following an unsuccessful bid to acquire Commodore International, Kotick and his investors executed a hostile takeover of Mediagenic for approximately in 1991. Notable investors included real estate magnate Steve Wynn and Philips Electronics.

Upon assuming the CEO role, Kotick immediately restructured the company by reducing staff from 150 to just 8 employees, relocating headquarters to Los Angeles, and initiating bankruptcy proceedings. He capitalized on valuable assets such as the Infocom catalog, development tools, distribution channels, and console licenses by converting creditor claims into equity—including Philips’s conversion of legal debts into stock. Kotick also rejuvenated classic franchises by re-releasing established titles and producing sequels like Return to Zork. By late 1992, the company reverted its name back to Activision.

Activision went public in October 1993, securing approximately in funding and listing on NASDAQ under the ticker symbol ATVI. By 1995, Kotick had fulfilled his commitment of achieving four consecutive years of 50% revenue growth while maintaining break-even financial results. He then shifted focus toward profitability through developing highly demanded games.

The company’s portfolio featured the MechWarrior franchise based on FASA’s BattleTech. Although Activision lost the license following MechWarrior 2 (1995), it expanded the brand with spin-offs such as NetMech and MechWarrior 2: Mercenaries, collectively generating sales exceeding .

In 1997, Activision obtained the license for Heavy Gear, producing a critically praised game utilizing the same engine as MechWarrior 2. This technology also supported other titles like Interstate '76 (1997) and Battlezone (1998), strengthening Activision's position within mech-based gaming markets.

Expansion and acquisitions (1997–2008)

Under the direction of Kotick, Activision strategically expanded its portfolio through targeted acquisitions informed by thorough market research. From 1997 to 2008, the company integrated around 25 development studios, often taking advantage of undervalued assets during the Dot-com crash. On June 16, 2000, Activision restructured itself into a holding company named Activision Holdings to streamline subsidiary oversight. The original corporate name "Activision, Inc." was changed to "Activision Publishing, Inc.," with Activision Holdings adopting the former name, and Activision Publishing becoming a fully owned subsidiary.

Notable acquisitions during this timeframe include:

  • Raven Software: Established in 1990 and recognized for its collaboration with id Software, Raven was purchased by Activision in 1997 for $12 million. This acquisition bolstered Activision's relationship with id Software and enhanced its development resources.
  • Neversoft: Initially collaborating with Activision on the highly successful Tony Hawk's Pro Skater franchise, Neversoft was acquired in April 2000. The series went on to generate revenues exceeding $1.6 billion.
  • Infinity Ward: Created by former developers from 2015, Inc. with initial funding from Kotick, Infinity Ward was acquired in January 2003 for $5 million. Its Call of Duty franchise has sold over 250 million copies and earned upwards of $12 billion by 2016.
  • Treyarch: Founded in 1996 and acquired around 2001 for approximately $20 million, Treyarch contributed to the Tony Hawk series and later collaborated with Infinity Ward on the Call of Duty franchise.
  • Gray Matter Studios: Originating as Xatrix Entertainment in 1993, Gray Matter was partially acquired during the development of Return to Castle Wolfenstein and fully acquired in 2002 for $3.2 million. It merged with Treyarch in 2005 to assist with Call of Duty 3 development.
  • RedOctane: Known for co-developing the Guitar Hero series, RedOctane was purchased for nearly $100 million in June 2006 following the franchise’s significant commercial success, which has generated over $2 billion in revenue.
  • Toys for Bob: Founded in 1989 and famed for the Star Control games, Toys for Bob was acquired in 2005. After merging with Vivendi, Activision tasked them with evolving the Spyro intellectual property into the highly lucrative toys-to-life Skylanders franchise.

These acquisitions played a crucial role in expanding Activision’s market presence and broadening its portfolio across major gaming genres, significantly boosting its financial outcomes and strengthening its competitive position.

Merger with Vivendi Games (2008)

Seeking entry into the rapidly expanding massively multiplayer online segment—which offered steady revenue through subscriptions and microtransactions—Kotick pursued a strategic consolidation. Around 2006, he initiated discussions with Jean-Bernard Lévy, CEO of French media giant Vivendi, whose underperforming games division Vivendi Games owned Blizzard Entertainment and its highly profitable World of Warcraft franchise, generating over annually from subscriptions. Vivendi Games also included Sierra Entertainment.

Lévy proposed a merger but required majority ownership control, compelling Kotick to relinquish some authority. After assessing Activision’s waning franchises such as Tony Hawk's, alongside acquiring RedOctane (publisher of Guitar Hero), Kotick recognized value in Blizzard’s expansion into China and accepted the terms.

By December 2007, Activision’s board had approved the merger which was completed in July 2008, forming Activision Blizzard with Kotick as CEO and Vivendi holding a controlling 52% stake. The newly combined company was valued at approximately , surpassing Electronic Arts’ , solidifying its leadership within the global video game industry.

Developments after the Merger (2009–2022)

Following the merger, Activision Publishing continued as a vital subsidiary of Activision Blizzard, managing the creation, production, and distribution processes through its own and affiliated studios. In 2010, Eric Hirshberg was named CEO of the division.

In November 2009, Activision launched Sledgehammer Games, established by former Visceral Games executives Glen Schofield and Michael Condrey. Initially tasked with developing a Call of Duty spin-off influenced by Dead Space, Sledgehammer later pivoted to support Infinity Ward on Call of Duty: Modern Warfare 3 after internal legal conflicts arose. Since that time, the development duties for the flagship series have been shared among Sledgehammer, Infinity Ward, and Treyarch, with additional assistance from Raven and other affiliated studios.

By early 2010, Activision Blizzard experienced revenue drops attributed to declining sales in the Guitar Hero franchise and weaker performance in casual gaming sectors. This downturn resulted in the closure of studios such as Red Octane, Luxoflux, and Underground Development, alongside a 25% workforce reduction at Neversoft. Later that year, Activision also closed Budcat Creations, followed by the shutdown of Bizarre Creations in early 2011 as part of resource consolidation efforts responding to changing market conditions.

After an eight-year tenure, Hirshberg stepped down as CEO in March 2018.

As the 2020s began, Activision sharpened its emphasis on the Call of Duty brand, debuting the free-to-play title Call of Duty: Warzone in 2020. By April 2021, every internal studio was engaged with some element of this franchise. This period also saw the creation of Activision Mobile in August 2021 to focus on developing Call of Duty Mobile, marking a strategic move into mobile gaming markets.

During the COVID-19 pandemic year of 2021, both Activision and its parent company departed their long-standing Santa Monica headquarters by ending their lease with Boston Properties. They transitioned to a smaller office space within the Pen Factory building in Santa Monica, subleasing from Kite Pharma to reduce operational expenses amid a shift toward remote work.

Acquisition by Microsoft (2023–Present)

After Microsoft's purchase of Activision Blizzard in October 2023, the company—including its Activision Publishing branch—was integrated as a separate entity within Microsoft's Gaming division.

On March 8, 2024, approximately 600 quality assurance employees at Activision locations in Texas, Minnesota, and California unionized under the Communication Workers of America (CWA), creating the largest union within the United States video game sector.

In May 2024, Activision established Elsewhere Entertainment based in Warsaw to develop a new AAA narrative-driven intellectual property unrelated to existing franchises like Call of Duty. The studio's team includes veterans from acclaimed series such as The Last of Us, Uncharted, and The Witcher, aiming to create a cutting-edge gaming experience and build a lasting franchise.

In July 2024, SAG-AFTRA initiated a strike involving video game voice actors against multiple publishers including Activision. The strike focuses on securing protections against AI technologies concerning AI-generated voice replication and digital likenesses of performers.

Studios

Former studios

  • 7 Studios based in Los Angeles, US; founded in 1999, acquired April 2009, and closed February 2011.
  • Activision Value Publishing located in Minneapolis, US; created through a subsidiary merger in 2000 and ceased operations in 2016.
  • Beachhead Studio operating out of Santa Monica, California, US; established February 2011.
  • Bizarre Creations from Liverpool, England; originally Raising Hell Productions founded in 1987, acquired September 26, 2007, and closed February 18, 2011.
  • Budcat Creations based in Iowa City, Iowa, US; founded September 2000, acquired November 10, 2008, and shuttered November 2010.
  • FreeStyleGames located at Leamington Spa, England; founded in 2002, acquired September 12, 2008, and sold to Ubisoft on January 18, 2017 (renamed Ubisoft Leamington).
  • Gray Matter Studios based in Los Angeles, US; initially Xatrix Entertainment during the 1990s, acquired January 2002 and merged into Treyarch by 2005.
  • Infocom situated in Cambridge, Massachusetts, US; established June 22, 1979, acquired in 1986 and closed by 1989.
  • Luxoflux operating from Santa Monica, California, US; founded January 1997, acquired October 2002 and closed February 11, 2010.
  • Massive Entertainment located in Malmö, Sweden; founded in 1997, purchased by Vivendi Universal Games in 2002 and sold to Ubisoft on November 10, 2008.
  • Neversoft based at Woodland Hills, Los Angeles; founded July 1994, acquired October 1999, merged into Infinity Ward on May 3, 2014 and became defunct July10, 2014.
  • Radical Entertainment from Vancouver, Canada; established in1991 and acquired by Vivendi Games in 2005 with significant layoffs occurring in 2012.
  • RedOctane located in Mountain View, California; founded November 2005, acquired in 2006 and closed February 11 2010.
  • Shaba Games operating out of San Francisco; started September 1997, acquired in 2002 and closed October 8 2009.
  • Swordfish Studios based in Birmingham, England; launched September 2002, bought by Vivendi Universal Games June 2005 and later sold to Codemasters November14, 2008.
  • The Blast Furnace (previously Activision Leeds) located in Leeds England; established November 2011 and shut down March 2014.
  • Toys for Bob from Novato California; founded 1989 and acquired May 3 2005 before spinning off from Activision May 2024 to become independent.
  • Underground Development (formerly Z-Axis) based at Foster City California; founded 1994 and purchased May 2002 before closing February 11 2010.
  • Vicarious Visions headquartered Albany New York; started 1991 and acquired January 2005 before merging into Blizzard Entertainment January 2021 and rebranded Blizzard Albany April 12 2022.
  • Wanako Games based out of Santiago Chile; founded in 2002 and purchased by Vivendi Games February 20 2007 then sold to Behaviour Interactive November 20 2008.

1980s

1990s

  • Hunter (1991)
  • Zork series (1993–1997)
  • Dark Reign series (1997–2000)
  • Heavy Gear series (1997–1999)
  • Quake series (1997–2007)
  • Interstate series (1997–1999)
  • Battlezone series (1998–1999)
  • SiN (1998)
  • Heretic II (1998)
  • Vigilante 8 series (1998–2008)
  • Tenchu series (1998–2004)
  • Civilization: Call to Power series (1999–2000)
  • Star Trek series (1999–2003)
  • Tony Hawk's series (1999–2015, 2020, 2025)

2000s

  • Soldier of Fortune franchise (2000–2007)
  • X-Men franchise (2000–2011)
  • Spider-Man franchise (2000–2014)
  • Lost Kingdoms franchise (2002–2003)
  • Total War franchise (2002–2004)
  • Call of Duty franchise (2003–present)
  • True Crime franchise(2003–2005)
  • Wolfenstein franchise(2003–2009)
  • Shrek franchise(2004–2011)
  • Doom 3(2004)
  • Madagascar franchise(2005–2011)
  • The Movies(2005)
  • Gun(2005)
  • Guitar Hero franchise(2006–2015)
  • Marvel: Ultimate Alliance franchise(2006–2009)
  • Barbie franchise(2006–2009)
  • Little League World Series Baseball franchise(2008–2010)
  • James Bond franchise(2008–2012)
  • Crash Bandicoot franchise(2008–present)
  • Spyro the Dragon franchise(2008–2018)
  • Prototype franchise(2009–2015)
  • Ice Age franchise(2009–2012)

2010s

Awards

In 2003, the organization was honored with the Game Developers Choice "First Penguin" accolade, acknowledging its trailblazing contributions as a prominent third-party developer.

See also

References

External links

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