Editing Activision (section)

=== The video game market crash (1983–1988) ===
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 the [[Intellivision]] and [[ColecoVision]] consoles, among other platforms.<ref>{{cite web |url=https://arstechnica.com/gaming/2014/08/the-rise-and-fall-and-rise-and-fall-of-gamings-third-party-exclusives/ |title=The rise and fall (and rise and fall) of gaming's third-party exclusives |first=Kyle |last=Orland |date=August 13, 2014 |access-date=February 12, 2019 |work=[[Ars Technica]] |archive-url=https://web.archive.org/web/20150708081756/http://arstechnica.com/gaming/2014/08/the-rise-and-fall-and-rise-and-fall-of-gamings-third-party-exclusives/ |archive-date=July 8, 2015 |url-status=live}}</ref> 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 the [[video game crash of 1983]].<ref name="Gamasutra" />

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 ({{USD|5|long=no}} compared to Activision's {{USD|40|long=no}} [[manufacturer'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.<ref name="Gamasutra" /> Their quarterly revenue dropped from {{USD|50 million|long=no}} in mid-1983 to about {{USD|6–7 million|long=no}} by 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.<ref name="high score activision crash">{{cite book|last1=DeMaria|first1=Rusel|last2=Wilson|first2=Johnny L.|title=High Score!: The Illustrated History of Electronic Games|date=2003|publisher=McGraw-Hill/Osborne|location=New York|isbn=0-07-223172-6|pages=103–105|edition=2}}</ref> Because of this, Activision decided that they needed to diversify their games onto home computers such as the [[Commodore 64]], [[Apple Inc.|Apple]], and [[Atari 8-bit computers]] to avoid completely going out of business like other third-party developers.<ref name="Gamasutra" /> 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 form [[Accolade, Inc.|Accolade]].<ref name="Gamasutra" /><ref name="edge history" />

With the video game crash making console game development a risky proposition, the company focused on developing for home computers with games like ''[[Little Computer People]]'' and ''[[Hacker (video game)|Hacker]]'', while Levy tried to keep expenditures in check as they recovered.<ref name="Gamasutra" /> Looking to expand further, Activision acquired, through a corporate merger, the struggling [[text adventure]] pioneer [[Infocom]] in 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.<ref name="edge history" /> About six months after the "Infocom Wedding", Activision's board decided to replace Levy with [[Bruce Davis (video game industry)|Bruce Davis]]. Davis was against the purchase of Infocom from the start and was heavy-handed in its management,<ref name="mit infocom">{{cite web |url=https://web.mit.edu/6.933/www/Fall2000/infocom/infocom-paper.pdf |title=Down From the Top of Its Game: The Story of Infocom, Inc. |date=December 15, 2000 |access-date=February 12, 2016 |publisher=[[Massachusetts Institute of Technology|MIT]] |url-status=live |archive-url=https://web.archive.org/web/20151105111124/http://web.mit.edu/6.933/www/Fall2000/infocom/infocom-paper.pdf |archive-date=November 5, 2015}}</ref> and even attempted to seek a lawsuit to recover their purchase from Infocom's shareholders.<ref name="Gamasutra" /> Crane also found Davis difficult to work with and was concerned with how Davis managed the closure of [[Imagic]], one of the third-party development studios formed after Activision's success in 1981.<ref name="Gamasutra" /> Crane left Activision in 1986 and helped [[Garry Kitchen]] found [[Absolute Entertainment]].<ref name="Gamasutra" /> In late 1986, Activision adopted the Electric Dreams brand, usually used for British software, for titles outside of English for the American market.<ref>{{Cite news |date=September 1986 |title=Electric Dreams Imported Software |pages=3 |work=[[Computer Entertainer]]}}</ref>