a ROM chip mounted on a circuit board within a hard casing that can withstand the physical insertion into the console and potential static electricity buildup. Atari's own programmable console, the Atari Video Computer System (Atari VCS or later known as the Atari 2600), was released in 1977 and based on the MOS Technology 6507 microprocessor, with a cartridge design influenced in part by the Channel F system. Other console manufacturers soon followed suit with the production of their own programmable consoles. At the start of the second generation, all games were developed and produced in-house. Four former Atari programmers, having left from conflicts in management style after Atari was purchased by Warner Communications in 1976, established Activision in 1979 to develop their own VCS games, which included Kaboom! and Pitfall!. Atari sued Activision on the basis of theft of trade secrets and violation of their non-disclosure agreements, but the two companies settled out of court in 1982, with Activision agreeing to pay a small license fee to Atari for every game of theirs they sold. This established Activision as the first third-party developer for a console. This also established a working model for licensing other third-party developers, which several companies followed in Activision's wake, partially contributing to the video game crash of 1983 due to oversaturation. As the second generation of consoles coincided with the golden age of arcade video games, a common trend that emerged during the generation was licensing arcade video games for consoles. Many of them were increasingly licensed from Japanese video game companies by 1980, which led to Jonathan Greenberg of Forbes predicting in early 1981 that Japanese companies would eventually dominate the North American video game industry later in the decade. At this stage, both consoles and game cartridges were intended to be sold for profit by manufacturers. However, by segregating games from the console, this approach established the use of the razorblade business model in future console generations, where consoles would be sold at or below cost while licensing fees from third-party games would bring in profits. Home systems Fairchild Channel F The Fairchild Channel F, also known early in its life as the Fairchild Video Entertainment System (VES), was released by Fairchild Semiconductor in November 1976 and was the first console of the second generation. It was the world's first CPU-based video game console, introducing the cartridge-based game-code storage format. The console