for a first-party company. As a balance to not being able to release their game for other platforms, second-party developers are usually offered higher royalty rates than third-party developers. These studios may have exclusive publishing agreements (or other business relationships) with the platform holder, but maintain independence so upon completion or termination of their contracts are able to continue developing games for other publishers if they choose to. For example, while HAL Laboratory initially began developing games on personal computers like the MSX, they became one of the earliest second-party developers for Nintendo, developing exclusively for Nintendo's consoles starting with the Famicom, though they would self-publish their mobile games. Third-party developers A third-party developer may also publish games, or work for a video game publisher to develop a title. Both publisher and developer have considerable input in the game's design and content. However, the publisher's wishes generally override those of the developer. The business arrangement between the developer and publisher is governed by a contract, which specifies a list of milestones intended to be delivered over a period of time. By updating its milestones, the publisher verifies that work is progressing quickly enough to meet its deadline and can direct the developer if the game is not meeting expectations. When each milestone is completed (and accepted), the publisher pays the developer an advance on royalties. Successful developers may maintain several teams working on different games for different publishers. Generally, however, third-party developers tend to be small, close-knit teams. Third-party game development is a volatile sector, since small developers may depend on income from a single publisher; one canceled game may devastate a small developer. Because of this, many small development companies are short-lived. A common exit strategy for a successful video-game developer is to sell the company to a publisher, becoming an in-house developer. In-house development teams tend to have more freedom in game design and content than third-party developers. One reason is that since the developers are the publisher's employees, their interests align with those of the publisher; the publisher may spend less effort ensuring that the developer's decisions do not enrich the developer at the publisher's expense. Activision in 1979 became the first third-party video game developer. When four Atari, Inc. programmers left the company following its sale to Warner Communications, partially over the lack of respect that the new management gave to programmers, they used their knowledge