Co-founded in 1980 by Ken Grant and Ihor Wolosenko in California, the company got its start as the software developer of FileManager 800 and FileManager+. They had a mutual interest in the Atari 800 and, wanting to get into games, brought on Rob Re to help develop Dodge Racer. The company later brought on talent who were working on games elsewhere including Mike Potter, Steve Hales, William Mataga, and Russ Segal.
In 1982, the company moved into a larger office where they employed 35 people while working on Atari 8-bit and Commodore 64 games. In 1984 the company was bought by Brøderbund, who shifted its focus to text adventures. With little success in this part of the market, Brøderbund closed Synapse in 1986.
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