From what I have read/seen it seems that Warner's approach drove lots of the talent away and that is why Activision (among others) were started. The suits didn't like paying the developers bonuses, etc., for delivering the big selling titles.
I have also read this too. Activision was created by former Atari employees. From Activision wikipedia entry:
"Before the formation of Activision, software for
video game consoles were published exclusively by makers of the systems for which the games were designed. For example,
Atari was the only publisher of games for the
Atari 2600. This was particularly galling to the developers of the games, as they received no financial rewards for games that sold well, and did not receive credit for their games. This caused several programmers to resign from their jobs. Activision became the first third-party game publisher for game consoles.
The company was founded by former music industry executive
Jim Levy and former Atari
programmers David Crane,
Larry Kaplan,
Alan Miller and
Bob Whitehead. Atari's company policy at the time was not to credit game creators for their individual contributions; Levy took the approach of crediting and promoting game creators along with the games themselves. The steps taken for this included devoting a page to the developer in their instruction manuals and challenging players to send in a high score (usually as a photograph, but sometimes as a letter) in order to receive a patch. These draws helped the newly formed company attract experienced talent. Crane, Kaplan, Levy, Miller, and Whitehead received the
Game Developers Choice "First Penguin" award in 2003, in recognition of this step.
The departure of the four programmers, whose titles made up more than half of Atari's cartridge sales at the time, caused legal action between the two companies which were not settled until 1982. As the market for game consoles started to decline, Activision branched out, producing game titles for home computers and acquiring smaller publishers."