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Six companies used to rule gaming. Only two of them still exist.

Photo Credit: Jason from The Wasteland

Titans in Gaming Part 1: The Old Titans

I found a series of articles in Computer Gaming World from the late eighties talking about the “Titans of Gaming.” They covered what they considered to be the five most important game producers. Of the five, two names may be familiar: Electronic Arts and Activision. And the things that are said about them are telling. On Activision:

“Activision’s forte is raw talent and rampant creativity. For optimum effect, this must be harnessed and channeled, not just sprayed around indiscriminately, and the only way to do so is under pressure from the consumer.” Computer Gaming World 38, June 87 (emphasis added).

On EA:

“Some of EA’s games are based on premises which have already been explored by other companies, but even when this is the case, EA’s distinctive style brings new life to the most over-exploited of ideas.” Computer Gaming World 37, May 1987 (emphasis added).

These do not sound like the companies of today. One does not think of “rampant creativity” when they think of Activision. EA still makes games based on premises that have already been explored, but would you say that they have a distinctive style? I would argue that both companies are natural evolutions of their 1980s versions, and that they outlived their competition because of changes they made during the video game crash.

The video game crash

Gaming went through a rough period in the early eighties. The video game crash happened in 1983, and many companies active at the time didn’t make it. The crash primarily affected console makers and console game studios in the US, but it had ripple effects throughout the rest of the industry. Most of the companies we’ll be looking at today made PC games during the 80s, which did not take as much of a hit as console games. Still, you will see how the turbulence caused a need for change that some could weather, and others could not.

The Casualties

Epyx

Epyx is one of the failed titans of the gaming industry. They had their heyday during the video game crash. They specialized in action games. One of their most popular games was called California Games. It was a different time. During this era, action games did not dominate the landscape like they do today. Most AAA games today would be considered action games then. During that era, adventure games had a larger foothold in the PC marketplace, and action games did better in the arcade and on consoles. Unfortunately for Epyx, the console market crashed for a few years.

Epyx’s California Games is one of the few Epyx titles still being sold

Epyx failed the way many of the companies in that era did: they failed to adapt. They made most of their money on the Commodore 64, and they refused to make games for Nintendo systems because they didn’t want to pay the licensing fees. They ended up in a situation where they wasted money on old systems, and when they did move forward, they made a deal to make games for the Atari Lynx. They ended up being overextended, and they had to file for bankruptcy. They sold off their properties piecemeal and have left virtually no footprint on the gaming landscape.

Infocom

Infocom specialized in a type of game that doesn’t exist anymore: text-based adventures. They created Zork, which you may have heard of, and many others you haven’t. They relied on text-based games for their entire lifespan. They dominated in the PC market in the 70s. They survived the video game crash initially because they didn’t rely on the console market. In the 80s, though, their limited range started to hurt them. Graphical games were growing in popularity. Infocom’s solution? Marketing. They argued that graphics were overrated compared to the power of human imagination. For a while, people believed them.

Infocom’s campaign against graphics in games.

Their lack of range hurt Infocom, but their non-game efforts forced them to sell the company. Infocom tried to expand into business software while continuing in games. This meant that they dropped a huge amount of money into a database product called Cornerstone. Unfortunately, Cornerstone flopped, and they didn’t have enough money to keep the doors open long-term. They laid off half of their staff and sold the company to Activision. Activision would close the studio entirely not long after. Overall, the value of the Infocom library was not as high as it could have been. Zork remained a valuable property for years, but the rest of their adventures faded into obscurity. Their inability to adapt to the graphical era ended up ruining the brand in the long run.

MicroProse

MicroProse formed right before the video game crash. They specialized in PC games, though, so the crash didn’t force them out of business right away. They made simulation games and started a number of game series that are ongoing today. Sid Meier was one of three founders. MicroProse released XCOM and Civilization.

MicroProse’s most successful franchise, Civilization, outlived the company by decades.

Of the three dead titans, MicroProse’s library would transfer the best to modern day. They made many vehicle simulation games, like Solo Flight and F15 Strike. Vehicle simulation games thrive now as a niche market. Their other specialization, strategy games, has grown into a larger niche now than it was at the time. XCOM and Civilization, two strategy games MicroProse invented, have both gone on to be top games in the strategy genre. In fact, both titles are produced by Firaxis Games, a studio formed by former MicroProse members.

Ultimately, MicroProse fell prey to two major problems. The first is talent drain, a common theme among all these fallen companies. The most well-known man to leave MicroProse was Sid Meier. However, when Sid Meier left, he also left with other talented leaders and developers. The other thing that MicroProse failed in was diversification. Their niches weren’t large enough in the 80s and 90s to support their business, so they looked for other options. Bill Stealey, one of the founders, insisted on investing in arcade games. Sid Meier disagreed and ended up leaving over that disagreement. MicroProse’s arcade games failed, and they went public to pay back the debts that they had accrued in the arcade business. They limped along for a few decades as the team shrank and they produced fewer and fewer games. Firaxis, the company formed from former MicroProse talent, is alive and thriving to this day.

Atari

Atari wasn’t mentioned in the Titans of Gaming series, but it definitely fit the bill. Atari used to be synonymous with console gaming, and they also played a core role in the video game crash. They made the most successful gaming console of their generation: the Atari 2600. They popularized the gaming console. They started out as a game studio, making arcade ports and a few original games. Nolan Bushnell, Atari’s founder, wanted to build a console, but knew the company couldn’t afford to bring it to market. So, he sold the company to Warner Communications. The 2600 succeeded, but Bushnell and Warner had a falling out, so Warner let him go. Just five years later, they became to the main cause of the video game crash.

The Atari 2600 was synonymous with gaming for years.

They failed in many ways, but ultimately, they overextended and produced too many games that they couldn’t sell. They produced a poor port of Pac-Man for the 2600, and they printed more copies of the game than existing 2600s, expecting it to sell the console. They failed to sell all those copies, and so had to eat the manufacturing costs of printing all of those cartridges. Then they made what is widely cited as the worst game of all time: E.T. Atari rushed E.T. out the door with six weeks of development time. They failed to sell many of the two million copies they shipped.

All these things come back to a company that had become bloated, and who thought they could sell video games regardless of their quality. When the games market flooded, they had too many failed titles and excess stock to stay afloat. Warner Communications sold the company, and it looked like the end of gaming.

Fall of the Titans

Each of those companies was a titan in their heyday. Some still exist as brand names, like Atari and MicroProse, without any of the people or properties they used to have. Others are gone completely. What do they have in common?

1. Failure to adapt to the shifting market: Although Epyx, Atari, MicroProse and Infocom all made different types of games/consoles, they all fell apart within ten years of each other. The 80s and 90s were a period of rapid change in gaming, and these companies didn’t follow along with it.

2. Loss of original leadership: Most of these companies lost prominent members around this era. Atari lost its founder and MicroProse lost Sid Meier. The talent drain crippled their ability to adapt.

Now, let’s look at some of the survivors.

The survivors

Gaming had a lot of growing to do, and it bounced back better after the video games crash. However, most of the existing market was replaced. Most, but not all. I want to highlight some of the survivors of the video game crash and show why they are still winners today.

Activision

Activision is an old game company. They were, in fact, the first company to make third-party console games. Former Atari employees started the company in 1979. They made Atari 2600 games. And just a few years after they opened, the console market crashed. They pivoted a few times, first to PC games, then to PC software. They even acquired Infocom. None of it worked. However, a young businessman saw potential in the company, and you might recognize his name: Bobby Kotick.

Bobby Kotick has owned Activision for over 30 years 

Kotick saw the value of Activision for its brand name, so he bought it. Kotick led the company through bankruptcy and moved them back to basics. He focused on IP. He went through Activision’s back catalog and republished what he could, and he released sequels to things that worked, like Zork. Business trended back up.

They used their success to go on an acquisition spree. They bought many well-known companies, some of which they still hold. Raven Software, Infinity Ward and Treyarch are all acquisitions that Activision made in the late 90s/early 2000s and now all three work on Call of Duty. They expanded out across genre and platform, and succeeded as a business first, and a producer of games second.

Bobby Kotick saved Activision, and he is still at the helm. In many ways, they are still the same company. They use their IP and back-catalog on a level rivaled only by Nintendo. They do not hesitate to gut companies under them when they underperform. They are not the company they were pre-Kotick, known for “raw talent and rampant creativity.” Often, raw talent leaves Activision to form their own studios. However, they are a true titan of gaming.

EA

EA was a company formed on the eve of the video game crash. They started in 1982, and they focused on home computer games, not console games. Unlike Activision, or Infocom, or Epyx, EA was not formed by a passionate group of game developers. It was the brainchild of Trip Hawkins, a former Marketing Director at Apple. He saw the business of games as being profitable, and so he formed a game publisher, not a developer. The EA formed then was not too dissimilar from the one today.

Sports games have been a cornerstone of EA’s business since the 80s

EA got its big break making sports games. To this day, sports games make up a large portion of their revenue. Sports games were competitive at the time, and EA gained an advantage through smart partnerships. First, they partnered with NBA players Dr. J and Larry Bird to make a one-on-one basketball game. The game succeeded, but not on the level of their next major sports title, Madden. They partnered with John Madden and worked closely with him to hone the gameplay. In both cases, EA used its partnerships to improve gameplay and to advertise the game. EA’s success throughout the video game crash came down to smart business decisions. They were ahead of their time, behaving more like a big tech company than an old-school game developer.

Nintendo

Nintendo wasn’t listed as a Titan in Gaming in the 80s, but they would definitely qualify. I won’t go into much detail about them here, because I already wrote another article on their president during this era. They succeeded by making an affordable console, and by having strong game IP for decades. Their president had a strong hand in both.

The new titans

How would the titans in gaming list look today? Well, we already know two of the names. To keep with the spirit of the CGW list, we will ignore the console makers. These are the five most important game publishers today.

1. Tencent

2. NetEase

3. EA

4. Activision

5. Bandai Namco

Soon, I’ll cover what makes these the new titans in gaming.

References:

The Ultimate History Of Video Games Revisited (retrieved from https://archive.org/details/ultimatehistoryofvideogamesrevisited).

Computer Gaming World Issues 36–41

CGW Issue 53 (on Activision) https://archive.org/details/Computer_Gaming_World_Issue_53/page/n55/mode/2up

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