It came from the desert: the legend of Atari’s E.T.

The naked Lara Crofthack. Cursed John Madden videogame covers. Polybius. All these videogame-related legends are as nothing compared to the mystical aura that has long surrounded Atari’s E.T.: The Extra-Terrestrial.

As a news story it almost seemed too good to be true: Atari, left with a surplus of millions of copies of the critically-panned adaptation of Steven Spielberg’s blockbuster film, was forced to bury its worthless stock in a New Mexico landfill.

Stories of the burial began to be circulated in September 1983, when the US videogames industry was in the midst of a sudden and sharp decline: a period when a medium once valued at around $3bn would eventually fall to just $100m over the next 18 months. In the wake of the crash, the burial of E.T. cartridges became a striking symbol of how quickly and damagingly the games industry landscape had changed.

On the 26th April 2014, it was revealed that the legend really was true. As part of a Microsoft-funded documentary being made by screenwriter Zak Penn, the burial site in Alamogordo, New Mexico was exhumed. While news cameras rolled, the scene looked, ironically enough, like a scene from another Spielberg film, Close Encounters Of The Third Kind: mechanical diggers probed at the ground while the desert wind whipped and flicked sand in the faces of the press and videogame fans, who’d gathered around the site in the hopes of catching the first glimpse of E.T.

Thankfully, the assembled crowd was rewarded for standing in the dust and stench. Among the mould and detritus, there they were:  scratched, dented E.T. cartridges still in their distinctive packaging. “It’s safe to say there are thousands of copies in that landfill,” said a newsreader on KOAT Action News.

Nearly 32 years after its original release, the legend of E.T. has come full circle. But as those battered copies of the game were revealed to the desert sun, one question is likely to spring to mind: what on earth went so disastrously wrong in the game’s development?

“It’s just like a movie”

In early 1981, systems engineer turned game designer Howard Scott Warshaw got a job at Atari. At that time, the company’s Atari 2600 console was nearing the height of its popularity, with ports of games such as Space Invaders rapidly pushing sales of the system towards the 10 million unit mark.

Just over a year later, Warshaw created what is widely considered to be the best game ever made for the 2600: Yars’ Revenge. Unlike so many other games for the console, Yars’ Revenge wasn’t a port of an existing arcade game; although it began life as an adaptation of the coin-op Star Castle, Warshaw tailored it for the system’s more limited hardware, added new ideas of his own, and created one of the 2600’s biggest hits.

Six months later, Warshaw’s next game arrived: Raiders Of The Lost Ark, the first game-to-film adaptation ever made, and another critical and financial success. Warshaw’s game even got the seal of approval from Spielberg himself, who saw a tape of Raiders before its release and said to the designer, “Wow, that was really great. It’s just like a movie.”

Spielberg liked the handling of Raiders so much, in fact, that he personally asked Warshaw to adapt his next film, E.T.: The Extra-Terrestrial. There was one small problem, though: where Warshaw had been given around seven months to complete Raiders Of The Lost Ark, he was given less than six weeks to complete E.T.

“The problem was the negotiations for the licensing took a long time,” Warshaw told Digital Press.  “The deal was completed in late July and Atari wanted the game out by September 1st in time for the Christmas shopping season. This allowed about five-and-a-half weeks for development time!”

Atari’s parent company, Warner Bros, had spent months working out the deal to make E.T., and by the end of it, had spent approximately $22m on the licence. In order to make that money back, the resulting game would have to be a colossal hit – meaning the pressure was on Warshaw to not only create a great piece of software, but also to have it ready for the production deadline on the 1st September 1982.

In the face of a tight timescale, Warshaw worked at a frantic pace, and ultimately managed to squeeze a top-down adventure into the Atari 2600’s tiny memory. It’s fair to say, however, that the lack of development time took its toll on E.T.

Although there was the germ of a decent game in Warshaw’s concept – where the player guides E.T. on his quest to find the missing pieces of his spaceship-dialling phone while avoiding members of the FBI – it was hobbled by some frustrating design choices and hideous collision detection (you can play the game for yourself here, if you dare). A longer lead-time could have resulted in a polished game, but Atari’s race to get E.T. into production meant that it wasn’t even play-tested.

Confident that it had a sure-fire hit on its hands, Atari produced around five million E.T. cartridges, which it assumed would fly off the shelves when the game launched in December 1982, and duly spent further millions on expensive magazine and television adverts.

Unfortunately for Atari, their predictions were wide of the mark: of those five million units, only 1.5 million were sold.

Although not a terrible figure by the era’s standards (E.T. remains the ninth best-selling game on the Atari 2600), Atari would reportedly needed to have sold four million copies in order to recoup the $22m spent on purchasing the E.T. license in the first place. But instead of another Raiders-style videogame hit, Atari were faced with box after box of E.T cartridges, all sent back to the company by disgruntled retailers.

The collapse

E.T. became the unwitting face of Atari’s downfall, but it was actually one of several ill-advised business decisions which all conspired to bring the company to its knees. Earlier in 1982, Atari made the mystifying decision to produce 12 million copies of Pac-Man, expecting the public to gobble them up as hungrily as its title character swallowed pills and ghosts. The game was a massive hit, selling seven million copies, yet Atari was still left with a huge surplus of unsold cartridges.

The 2600 port of Pac-Man was also infamously botched, leading to murmurs of discontent among critics and gamers alike. This, coupled with the huge numbers of low-quality, third-party games crowding onto shelves left consumers more cautious about what they spent their money on. All this, plus the slow sales of the Atari 5200 console (launched in November 1982), led to a collapse in Atari’s share prices on the 7th December 1982.

With Atari in serious financial trouble by the following year, it was forced to find a way to dispose of the tonnes of unsold and returned stock it had left over – including the millions of now worthless E.T. cartridges it still had wrapped in cellophane. In September 1983, it was reported that trucks were carrying unsold games from Atari’s plant in El Paso, and depositing it in the city dump in Alamogordo, New Mexico. Embarrassed at the huge surplus of games in its possession, Atari decided to bury the truth as quietly as it could.

When stories began to circulate that videogame-obsessed kids were plundering the site for abandoned copies of titles such as Ms Pac-Man, Bezerk and E.T., the site was steamrollered and concreted over. And thus, one of the biggest urban legends in gaming was born.

The legend uncovered

Ultimately, E.T. was but a single crack in Atari’s crumbling empire. As Warshaw himself points out, the company’s business practices were as much to blame as the uneven quality of its products.

“Atari, for years, was using the leverage that they had to just screw distributors everywhere,” Warshaw told The AV Club in 2005. “When they had a hot game, they would force distributors to buy copies of the old games that weren’t selling anymore, just to get copies of the new game. This is the kind of stuff they were doing. So when things started to turn on them, everyone in the industry was waiting to jump on them with both feet. That’s what killed Atari, was the ill will that they had generated through their cutthroat business practices on their way up.”

More than three decades after he made E.T., Warshaw remains philosophical about his experiences. The designer was among the crowds as the diggers exhumed the thousands of copies of his game and others on the 26th April, and he seemed genuinely emotional about the event.

“I’m just so excited to be here,” Warshaw said, his voice cracking. “This is intense. This is just fabulous. Look at all the excitement that’s been generated today, over something I did 32 years ago.”

E.T. may not have been exactly the game Warshaw wanted to make, and it certainly wasn’t the hit Atari so desperately wanted. But in its own way, E.T. was still an industry landmark, and even though its final resting place has finally been confirmed, it’s a game that is sure to be whispered about for many more years to come.

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