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	Title: ACTIVISION BUYS INFOCOM!
	Source: QuestBusters, v3(4)
	Date: April 1986
	Transcription by Steve Derby
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If you can't beat 'em, buy 'em. That seems to be the strategy of Activision, which
entered the adventure industry only last year with the release of *Mindshadow*, a graphics
game. Activision Chairman and CEO James H. Levy recently announced plans to
purchase Infocom, whose all-text adventures virtually created the adventure game market for
home computers and have dominated it throughout the Eighties.

Levy says Activision has signed a letter of agreement to trade two million shares of their
publicly-traded common stock for all the outstanding shares of Infocom's common stock, a
transaction valued at $7.5 million. The deal won't be finalized until details are agreed
upon by the board of directors of both firms and Infocom shareholders, expected to happen
by the end of June. Negotiations have been underway since last December.

Plans are for Infocom to function as a subsidiary of Activision, retaining its
marketing and product development in Cambridge, Massachusetts. Activision,
based in Mountain View, California, will take over global distribution. Levy commented.
"We look forward to working with Infocom to build their position in the worldwide home
computer software market."

Activision's action is part of what he calls a "long-term strategy to broaden our product
line." So far this has included purchasing Gamestar, under whose logo all sports games
will now be marketed, and Creative Software for their line of productivity software. One
of the companies that raked in big bucks during the videogame craze, Activision ran into
trouble when that market vanished -- along with hundreds of programmers, designers, and
several game magazines. The company faltered during the early days of its transition into
computer games, before extensive reorganization.

The main benefit to Infocom will be Activision's European marketing organization, Electric
Dreams. Infocom games have been available in England for some time, but may now see
distribution in Germany and some of the 40 other countries reached by Activision.

Asked to comment, Infocom President and CEO Joel Berez said, "We have a high regard for
Activision's achievements and capabilities, especially their worldwide distribution strength,
and believe that the combination of Infocom and Activision will have significant
influence in the software market." But would Infocom sell out simply to gain wider
distribution? Most industry watchers think not. Syndicated columnist Dan Gutman
observed that Infocom "lost a pile on *Cornerstone* trying to crack the productivity market"
An IBM database, *Cornerstone* was initially priced at $495, but a week after the Activision deal
was announced Infocom cut the price to $95, effective May 1. (Next thing you know they'll be
offering a free *Cornerstone* with every copy of *Zork*.) Infocom will now focus exclusively on
entertainment software.

That includes more in their Interactive Fiction Plus series, for computers with a minimum
of 128K. The next title in the line, *Trinity*, is scheduled for a June release and set in an
alternative reality where "magic and science co-exist."
