The business was founded in 1977 by Atari founder Nolan Bushnell as the Chuck E. Cheese's Pizza Time Theatre; "E" stands for "entertainment", with its first restaurant in the East Side of San Jose, California.[1] The theatre featured singing animatronic characters. The original Pizza Time Players main show lineup featured Crusty the Cat, Jasper T. Jowls, Pasqually, and the Warblettes performing with Chuck E. in a "theater" where customers could eat their pizza. Other Pizza Time Players cast members added in later years included Mr. Munch, Dolli Dimples, The Mopsey Sisters, Foxy Colleen Flannigan, Sally Sashay, Madame Oink, Harmony Howlette, and Helen Henny.
In 1984, the company's parent, Pizza Time Theatre, Inc, filed for Chapter 11 bankruptcy and was purchased by competitor ShowBiz Pizza, which also featured pizza, video games, and singing animatronic characters. It was at this time that Richard M. Frank became the CEO and decided to change the target audience from the 10 to 17 years age group to the 0 to 12 years range they have today. Both the Chuck E. Cheese's and ShowBiz names continued to be used until 1992, when Chuck E. Cheese's Pizza became the name for all of the restaurants.
In 1999, CEC Entertainment, Inc., the owners of Chuck E. Cheese's, bought out their own primary competitor, Discovery Zone.
There was another restaurant called Showbiz Pizza but they were a competitor.