After leaving his position as a video game developer and designer at Activision, Garry Kitchen founded the company in 1986 with his brother Dan Kitchen, along with Alex DeMeo and John Van Ryzin.[1] The company's headquarters was in Glen Rock, New Jersey, but later moved to another New Jerseyborough, Upper Saddle River. In 1988, after his brief stint at Hasbro, David Crane had joined the company.[2][3] While the company was based in New Jersey, David Crane worked out of his home on the West Coast.[4] The company's name was chosen because it was alphabetically above Activision, implying that Absolute Entertainment was superior to Activision. It was the same strategy that Activision chose when the programmers left Atari.
In the third quarter of 1995, Absolute Entertainment went bankrupt and suspended operations and laid off most of its staff.[5] Since Kitchen had already formed a new company with David Crane called Skyworks Technologies, some of the employees transitioned to the new company.