Answer: Activision

In the current age of abundant and widely developed video games, the idea that there would be a significant separation between those who make the hardware and those that make the games is so standard as to be assumed unless otherwise indicated. We buy our computers, consoles, smartphones, and handheld gaming devices from one company and then we buy all (or nearly all) the games we’ll ever play on those devices from an entirely different company.

In the early days of video game development, however, that wasn’t the case. Video game hardware developers, like Fairchild, Magnavox, and Atari all had to not only prove the value of their system to a public largely unfamiliar with video games, but they employed their own software developers to build killer titles that drew that same public in. That might have been a necessary evil, but it didn’t sit well with early developers as they had no financial incentive to create a blockbuster game (whether a title sold 1,000 copies or 1,000,000 copies made no difference to their pocketbooks).

As such, it wasn’t long before game developers jumped ship and headed out on their own. In 1979, Atari programmers David Crane, Larry Kaplan, Alan Miller, and Bob Whitehead met with the then-CEO of Atari Ray Kassar to discuss compensation and the premise that game developers should be rewarded like musicians (more sales would lead to more compensation). According to Kaplan, Kassar suggested that anyone could do their job and refused to entertain the idea of further compensating the programmers.

Three of the four men, Crane, Miller, and Whitehead, promptly left the company and founded Activision (Kaplan soon joined them). Their departure not only created the first third-party development house for video game consoles, but it also gutted the Atari design department (which in turn led to a legal battle that dragged on until 1982).

Decades on Activision (now Activision Blizzard) is valued at over 14 billion dollars, has over a dozen subsidiaries, and is responsible for popular modern titles like the Call of Duty and Guitar Hero series. Atari, on the other hand, folded and split in 1984 after the North American Video Game Crash of 1983 and now exists largely as a licensing entity for the titles that put it on the map back in the 80s. While avoiding the Video Game Crash would have been tricky, perhaps Mr. Kassar should have kept his star programmers and diversified his portfolio.