At the beginning of the 1980s, Atari was at the pinnacle of success: the US firm dominated the video game market, with an 80% market share. The success story had started 10 years earlier, when electrical engineers Nolan Bushnell and Ted Dabney founded Atari. Building on the idea of a pinball machine, they connected up a display screen to a game console and a coin slot, and fitted the whole thing into a box. The result was the ever first video arcade game. Pong, a kind of digital table tennis in which two players had to hit a white dot back and forth, ran on this system from 1972 onwards.

Bushnell and Dabney set up the prototype of the Pong gaming machine in a bar in California. A few days later they got a call from the bar owner asking them to come and take the machine away, as it was broken. But it turned out that the game was so popular, the coin box was full. This prompted the developers to put their arcade game into serial production, marking the beginning of the company’s rise. The Atari 2600 home console was released a few years later. Into the 1990s, around 25 million of these devices were sold. Atari also developed affordable home computers, outstripping the competition.

The successful Atari 2600 console from 1979 with joystick.
Wikimedia

Rushed development…enormous flop

For the 1982 Christmas season, the company needed a blockbuster. In the summer of that year, Steven Spielberg’s family film E.T. – the Extra-Terrestrial was a smash hit in cinemas. Atari bought the licensing rights for around 25 million US dollars, and developed a game for the Atari 2600 in just five weeks. On the back of the film’s success, expectations were high, so five million copies were produced. But the game flopped, and only about a fifth of that figure was sold, despite some heavily discounted prices.

Even the worst video game of all time can be played online on the Internet Archive website. Clicking on the picture takes you to the Internet Archive website. Click on the screenshot to load the game. The ‘Ctrl’ key starts the game. E.T. can be moved using the arrows; the ‘Ctrl’ key corresponds to the red button on the joystick. To levitate E.T. out of the pit, you have to press the ‘Ctrl’ key and the up arrow.
Internet Archive

The instructions for E.T. If you wanted to master the game, you had to read these instructions.
Internet Archive

What happened? The game E.T. was, in a word, rubbish. The quality of the graphics is difficult to judge from today’s perspective, but it seems very crude. The biggest weakness, however, was the gameplay. Unlike other games of that period, you had to read through the game instructions to know what you needed to do. But it was also confusing, monotonous and irksome to play. The objective of the game is to navigate E.T., in as few moves as possible, to find the pieces of a telephone that the alien can use to ‘phone home’. The parts are hidden in various pits, into which the character falls with tedious regularity. Getting E.T. out of the pit is the gamer’s main activity.

A common sight, unfortunately: the game’s main character in a pit.
Internet Archive

With E.T., the entire Atari company manoeuvred itself into a hole it couldn’t get out of. The game exemplifies the collapse of the video game market in the early 1980s. Between 1983 and 1985, the video game industry was hit by a recession. The reason for this was the rise of the personal computer. In addition, the production forms oversaturated the market with hastily and poorly produced games such as E.T. Industry sales revenue fell from 3.2 billion to 100 million in two years. Atari was hit hard by the collapse, and lost millions. In 1984 the consoles and computer division was sold, and the business subsequently ceased trading. The arcade games division later went under. Today Atari exists only as a logo and a brand.

The legend of the ‘Atari video game burial’

In the gamer community, a rumour has circulated over the past 30 years that shortly after the sales debacle thousands of E.T. game cartridges were buried in a landfill in New Mexico, USA, together with other games and console components. For a long time the rumour was regarded as a modern legend, until in 2013 a film team was granted access to the landfill and an excavation permit. The E.T. cartridges, as well as original packaging and game instructions, were in fact unearthed. The legend turned out to be true! Some of the remains were taken from the landfill and sold to collectors or given to museums. The remaining cartridges disappeared back into the pit.

The irony of fate: unsold E.T. game cartridges in a landfill pit in Alamogordo, New Mexico, USA.
Wikimedia / taylorhatmaker