E.T., the flop

Curio & Co. looks at German poster for the E.T. videogame by Atari. Curio and Co. www.curioandco.com 


Take one mega-blockbuster, put it in the hands of the leading video game manufacturer, and you’ll end up with a sure-fire winner, right?

E.T. opened in June 1982 to immediate success. By the end of its first theatrical run it had grossed over $600 million worldwide. A video game based on the film, timed for a Christmas release, should have been a no-brainer. So how did one of the biggest films in box office history turn into the biggest video game flop ever, forcing Atari out of business and ushering in a crash of the entire video game industry in North America?

Timing, it seems is everything.

Atari, then owned by Warner Communications, secured the rights to make a game based on E.T. in July of 1982. That left them only five weeks to produce the game if they wanted it out in time for Christmas – when video games were being produced no faster than six months.

Bafflingly, they found a game designer willing to accept this impossible timeline (plus $200,000 and a Hawaiian vacation). Howard Scott Warsaw had proven himself with Yars’ Revenge (one of Atari’s best-selling games at the time). If anyone could do it, Warsaw could.

Given the timeline, the game was understandably dull. Players guided E.T. around various screens to collect pieces of his telephone, all the while keeping his strength up with Reese’s Pieces.

It may not sound like much, but by December anticipation was high. Upon release, it topped video game sales lists and sold 1.5 million copies to become one of Atari’s best-selling titles. But 1.5 million wasn’t much when 3.5 million copies went unsold. Retailers found that sales figures weren’t meeting expectations, and they began to discount the price. One retailer discounted the price five times from $49.95 down to less than a dollar. The E.T. video game was in freefall.

Furthermore, dissatisfied customers were returning copies in large numbers, and the game was negatively received by critics for its disappointing story, monotonous and time-consuming gameplay, and its poor visuals. The E.T. video game was a critical and financial failure.

Atari had earned $25 million in sales on the game but had lost 100 million, and by 1983 the company had half a billion in losses. Atari was broken up and sold in 1984, but the effects of their crash quickly spread to competitors. E.T.’s high-profile disaster, along with a glut of poor quality games and competing consoles, competition from home computers, and the loss of publishing control nearly destroyed the video game industry in the US. It was time to phone home.

Fact continues to prove stranger than Science Fiction, however. In the most literal corporate cover up, Atari dumped the unsold E.T. cartridges, along with another 5 million unsold Pacman games. In September 1983, truckloads of Atari boxes, cartridges and systems were taken from a warehouse in Texas to a dump in Alamogordo, New Mexico. The games were crushed, buried and covered over with cement.

Poor E.T., all he wanted was to make it home. Instead he learned that even a “sure hit” can be driven into the ground.