Inspired by the great success Activision is enjoying in its early years producing games for the Atari VCS/2600, Los Gatos-based Imagic becomes the second third-party software manufacturer. Former Atari vice president of marketing Bill Grubb forms the company under a $2 million business plan, founded on July 17 1981. He is joined by Dennis Koble, who in 1976 was one of the first programmers hired by Atari. Also part of the founding team is ex-Mattel Electronics alums, Jim Goldberger and Brian Dougherty. Dougherty asks Pat Ransil, a classmate of his from U.C. Berkeley, to come along for the ride. Imagic Corporation’s staff is initially made up of 10 employees, consisting mostly of former Atari and Mattel crew. The list of programmers includes Rob Fulop, who at the tender age of 21 had been hired by Atari in 1979. While toiling in obscurity at the company, in 1980 Fulop created a VCS version of the 1978 arcade hit Night Driver. He also pumped out a version of Space Invaders for Atari’s 400/800 computers the same year. Next came his masterful adaptation of Missile Command to the VCS in 1981, into which he also hid his initials as an easter egg for astute gamers to find.
That same year Fulup leaves Atari to join Imagic, and there he designs Demon Attack over a five-month period. It debuts at the 1982 Winter CES in Las Vegas as one of the three initial cartridge offerings from the company, along with Star Raiders knock-off Star Voyager and pool game Trick Shot. Demon Attack becomes the best-selling Imagic cartridge, moving over one million units and ported to numerous video game and computer platforms. It also plucks the 1983 Videogame of the Year award from the pack, awarded in the pages of Electronic Games magazine. Out of the “gamestorming” sessions held to create new game ideas, Fulop also creates hit Cosmic Ark for Imagic, along with the idea of linking the game with Koble’s Atlantis; when the player loses at the end of Atlantis they’ll notice a ship taking off amid the destruction. This is the Ark from Cosmic Ark, charged with collecting species from new planets to help the Atlanteans repopulate. Fulup also populates the Imagic catalog with the lesser-known Fathom and a very rare Rubik’s Cube game called Cubicolor. Also on board at Imagic is VCS Video Pinball creator Bob Smith, whose output for the company includes Riddle of the Sphinx and Dragonfire.
The company expands to a staff of 250, with sales eventually surpassing 125 million dollars. An extensive advertising campaign attempts to differentiate the company from the competition, with an aggressive (some might say, passive aggressive) series of ads insulting casual gamers and sneeringly daring hardcore players to defeat the increased difficulty of Imagic cartridges. Not one to be outdone by “the other” third-party game maker, Imagic moves into an ambitious 123,000 sq. ft. office and manufacturing plant in 1982. Part of their plan from the beginning, Imagic expands their roster of games from just the Atari 2600, to include cartridges for the Intellivision and the Odyssey² as well as Atari’s 8-bit computer line.
The Imagic’s Over
Although their formation as a third-party video game manufacturer had been inspired by Activision, Imagic doesn’t have quite as successful a transition through the great video game crash, a result of overreaching, underperforming and just plain bad timing. Looking to raise capital to maintain their ambitious game release schedule, in late 1982 the company files with the SEC to make a public offering of stock in the company. The problem is that during the review period for the IPO, Warner Communications makes its fateful announcement that Atari has underperformed in the fourth quarter of the year. This sends a shockwave through the markets and Warner shares plummeting. This has such a detrimental effect on Imagic’s financial footing that the IPO filing has to be pulled.
As high-profile Atari games such as E.T. and Raiders of the Lost Ark languish on store shelves, buyers and distributors begin demanding that video game companies like Imagic buy back unsold inventory. The company capitulates in order to keep preferred positioning on store shelves but must burn up $12 million worth of their privately held stock to pay for it all. An announcement in the later part of 1983 indicates their intention of adding home computer software to their library of games, including ports of their more popular games like Demon Attack and Microsurgeon for the Texas Instruments TI 99/4A computer. Another announcement in October, however, reveals that Imagic has laid off most of its staff. The intention of the company is to drop the manufacturing and distribution part of their business and become a video game design house only. In the end, after having produced 25 games for various home consoles, Imagic folds up shop in 1986, one of the more high-profile victims of the big video game crash.