In 1983, a pixel alien nearly sank the video game industry

By: Elora Bain

The excavators vomit a disparate mixture of scorched earth and trash. A few onlookers, hands in visors to protect themselves from the blinding light of the desert, let out a howl of surprise. Walking among the rubble, men in rubber gloves unearthed an object from another time. This April 26, 2014, in a landfill in Alamogordo, New Mexico (southwest of the United States), a relic has just been unearthed: a video game cartridge buried there three decades earlier. On the fleshless plastic, we read distinctly: ET the Extra-Terrestrial. How did we get here?

A not-so-extra alien

On paper, it was a good idea. Released theatrically in the United States in June 1982, AND the alien –the eponymous film directed by Steven Spielberg – sits at the top of the box office for sixteen weeks and brings its producers a whopping $900 million, for an initial budget of 11 million. In the process, stuffed animals, clothes and other by-products are sold like hot cakes. One company is biting its fingers: Mars, which markets M&M’s, refused to allow its sweets to appear in the film, for fear of bad publicity (the competing confectionery company Hershey’s, which accepted, will see its sales jump by 65%).

The feature film which would win multiple Oscars the following year therefore seemed, in the summer of 1982, a machine for transforming everything it touched into gold. So why not a video game adaptation? Architect of already cult games Space Invaders (1978), Asteroids (1979) and Pac-Man (1980), the American company Atari Inc. seems ideally suited to transform the essay. But when he was offered the rights to exploit the blockbuster, his boss was not convinced. “I think it’s a stupid ideaasserts Ray Kassar, general director of Atari between 1978 and 1983. We’ve never made an action game from a movie.”

After only five weeks of development, the game ET the Extra-Terrestrial is given to distributors. But this abnormally short development time is evident as soon as players turn on their Atari 2600 console.

Unfortunately for Ray Kassar, it is Warner, Atari’s parent company, which has the last word: the film’s exploitation rights are purchased at a high price for a sum estimated at 25 million dollars. However, to ride the success of the film, you have to act quickly. That is to say, release the game before Christmas. So imagine and code the game by 1er September 1982. Without further ado, the project was entrusted to a talented 25-year-old developer, Howard Scott Warshaw, who a few months earlier had produced the adaptation of another Steven Spielberg cartoon, Raiders of the Lost Ark (but then it took him ten months of effort).

Home phone…crazy

This is how, after only five weeks of development, the game ET the Extra-Terrestrial is handed over to distributors and will be released at the beginning of December 1982. But this abnormally short development time is obvious as soon as players turn on their Atari 2600 console: a mush of pixels, a gameplay incomprehensible and recurring bugs almost tear the controller out of their hands. We must face the facts: the game is a failure. However, the company had seen the big picture, producing 4 million cartridges. Less than a third have been sold.

This is how, with the greatest discretion, semi-trailers left the Atari depot in El Paso (Texas) in September 1983 and headed towards the Alamogordo landfill. The site was chosen for two reasons: it is forbidden to wander there and burials take place at night. Perfect. The trucks therefore dump their cargo of cartridges there, officially because they would be “unsaleable, defective, returned or unusable”. But the rumor spreads. So, to prevent kids from the neighboring town from coming to inspect the area with shovels, a concrete screed was poured there.

During excavations in the Alamogordo landfill (New Mexico), where video game cartridges developed by the American publisher Atari were found in 2013 and 2014. | taylorhatmaker via Wikimedia Commons

Case closed? Not really. Because the fiscal year ends disastrously for the American video game publisher. A year earlier, Atari had an 80% share in a booming video game market, but the colossal losses incurred over the period – estimated at $563 million – forced the company to let go of a third of its staff and carry out a major restructuring. Abandoned by its parent company, Atari Inc. was sold the following year, in 1984.

Cover of the video game ET the Extra-Terrestrial, released on the Atari 2600 console in December 1982. | Atari Inc. via Wikipedia
Video game cover ET the Extra-Terrestrialreleased for the Atari 2600 console in December 1982. | Atari Inc. via Wikipedia

“Game over” for the video game sector?

In 1983, the entire industry lost its footing and video games experienced their first crisis. The American video game market, which was worth 3.2 billion dollars in 1982, collapsed to 100 million in 1985 – a fall of 97% – so much so that some commentators announced the death of the sector. “The video game industry is coming back to earth”quips the New York Times, October 17, 1983. “Professionals in the sector say that many young people seem to have grown tired of Donkey Kong and of Chopper Command (two games released respectively in 1981 and 1982, editor’s note) and turned to personal computers or returned to traditional, non-electronic leisure activities.concludes the New York daily.

Howard Scott Warshaw, the developer of the “worst video game in history,” resigned from Atari in the wake of the fiasco. He is now a psychotherapist.

Of course, the resounding failure ofET the Extra-Terrestrial is not the only cause. “The video game AND did not cause the accidentsaid Howard Scott Warshaw, the game’s developer, in retrospect. Rather, he was a symptom, reflecting the thinking and actions that led to this accident. Market saturation, competition from personal computers and the release of poor quality games ultimately eroded buyer confidence. Moreover, a few weeks earlier, in October 1982, Atari released a controversial game, Custer’s Revengewhich challenged players to rape a Native American woman tied to a cactus.

Fortunately for the community gamingthe video game market eventually recovered at the end of the 1980s, now dominated by the Japanese firm Nintendo. Howard Scott Warshaw, the developer of the “worst video game in history,” resigned from Atari in the wake of the fiasco. He is now a psychotherapist.

Elora Bain

Elora Bain

I'm the editor-in-chief here at News Maven, and a proud Charlotte native with a deep love for local stories that carry national weight. I believe great journalism starts with listening — to people, to communities, to nuance. Whether I’m editing a political deep dive or writing about food culture in the South, I’m always chasing clarity, not clicks.