Battleblock Theater is a game made by the Behemoth prior to Pit People. Hatty Hattington being the victim of a possessed hat and later turning on his previous friends. However, after the events of Battleblock Theater, he is assumed dead. Before sinking to the bottom of the ocean however, he blasts a green laser from his hat, and the laser goes on to hit the Bear. This event and hat may have started the events of Pit People.
For more information, visit the Battleblock Theater Wiki.