Gaming's Biggest Disasters: E.T. the Game
The Edsel. The Hindenburg. "Plan 9 From Outer Space." Pink Lady and Jeff. Van Halen with Gary Cherone. E.T. the game. All these things are synonymous with disaster, and as Atari's adaptation of the '80's blockbuster proved, the gaming world certainly wasn't immune from it.
"E.T.: The Extra-Terrestrial" and Atari came together at a great time in history. In 1982, "E.T." was the biggest money maker in cinema history, and with video games at their peak, there was no company hotter than Atari. The number one game company making a game based on the number one film in cinema history seemed like a surefire bet.
Yet Atari's adaptation of the movie "E.T." became an ironic disaster in several ways. For one, the blockbuster movie didn't translate into a hit game (after all, it was about an ugly but friendly little alien). It was also ironic that the movie, like many blockbusters, sold a lot of merchandise like Reeses Pieces and tan leather E.T. dolls. But the video game based on the movie was a huge flop, and perhaps the biggest commercial failure in the video game industry. So in essence, the most successful film in history (at that time) led to one of the least successful video games of all time.
For those who are curious to see how bad a game E.T. is, there are still plenty of cartridges floating around, and even at rock bottom prices on EBay you don't have to worry about fighting another collector for a copy, or having to pay a ridiculous collector's item price for it. But as with most bad movies, TV shows, and games, learning about the drama behind the scenes is certainly a lot more entertaining.
So what went wrong with such a seemingly sure thing? Some answers can be found in Master of the Game: Steve Ross and the Creation of Time Warner by Connie Bruck, the biography of Steve Ross, the late chairman of Warner Brothers who masterminded the Time/Warner merger. Long before the first big video game boom, Warner was in talks to acquire Atari, which was founded under its original name, Syzygy, by Nolan Bushnell in 1972. Their first games, Pong and Tank, were hits, and the company was doing well on its own with sales of $39 million in 1976. Ross' schmoozing powers were legendary, and once Bushnell fell under his charm, the deal was closed; Atari was sold to Warner Communications in 1976.
But the first couple of years under Warner, Atari wasn't making money. Once Bushnell was replaced by Raymond Kassar in 1978, the company finally paid off for Warner. In 1979, Atari showed a profit of $6 million, thanks to the success of Space Invaders, and the Atari 2600 system. Then Atari jumped to a $70 million profit in 1980; by 1981, the company made a haul of nearly $300 million and was the titan of the video game industry.
As Bruck writes in Master of the Game, Steven Spielberg and Ross became good friends in the summer of 1982, when E.T. cemented Spielberg's status as the hottest director in the known universe. Many of Spielberg's mentors were older men like Ross, who became father figures to the director. Spielberg had strong ties with Universal, the company that started his career, but Ross was determined to bring him over to Warner Bros. The pawn in the game was E.T. the game, and it ultimately brought Spielberg into the Warner family.
Both Spielberg and Ross were big gamers, and Ross loved to play Space Invaders late into the night. Spielberg promised Ross he could take the first crack at acquiring the rights to turn E.T. into a game. Atari offered Universal Studios owner MCA $1 million, and a 7 percent royalty. Sid Sheinberg, who was then head of Universal and was another mentor to Spielberg, told Atari to get lost. But before anyone knew it, Ross and Spielberg got together that July, and made a deal for $23 million.
Rushed into production, E.T. for the Atari 2600 had poor, unispired gameplay that failed to match the movie's greatness.
As if that weren't enough to send the Atari execs into shock, Ross then announced the game had to be ready by Christmas. The usual development period Atari needed for games was six months lead time to make delivery. Now they had four or five weeks to get things moving. Atari exec Kassar also realized E.T. wasn't suited to be turned into a video game. As he recalled in Master of the Game, it was a "lovely sweet movie," but kids playing video games "like to kill things." Still, Atari pressed on. Four million games were going to roll off production lines, but then focus group reports came in predicting Atari would only sell a third of that.
E.T. the game hit stores in time for Thanksgiving in 1982, but out of the four million copies shipped, 3.5 million were returned back to the company. The game was poorly designed and featured boring gameplay that involved E.T. falling into wells and searching for Reeses Pieces (nice marketing tie-in) to restore his health. No one could have predicted that Atari would have gone down so drastically and quickly after the company had its biggest year, but Atari now had challengers with several competing consoles like the ColecoVision and Intellivision systems, as well as the rise of personal computers.
By the summer of 1983, the video game industry had officially crashed. As former Atari executive Charles Paul recalled to Bruck, he believed the E.T. game was "a terrible mistake. I knew it hadn't caused the downfall of Atari but it did throw gasoline on the fire." Still, Paul admired the gamble Ross took, because it brought Steven Spielberg to Warner Brothers. "He succeeded in breaking MCA's hold on Spielberg. Steve's viewpoint was, so what if I overpay by $22 million? How can you compare that to the value of a relationship with Spielberg? And I think he was dead right."
Spielberg would go on to direct and/or produce several films in the 1980s for Warner Bros., from "The Color Purple" to "Goonies." Still, E.T. the game has an overwhelmingly negative effect on Atari itself. Along with spurring the Video Game Crash of 1983, the game left Atari financially wounded and as a result, Warner sold the home and game divisions of Atari in 1984 to Commodore founder Jack Tramiel (Warner kept the arcade division of Atari and later sold that business in 1985 to Namco). While Warner was able to use E.T. the game to secure Spielberg, Atari never truly recovered from the disastrous effort.
As it stands today, Atari's E.T. is a historical milestone that symbolized the end of the first generation of video games. Amazingly, the urban legend about millions of E.T. game cartridges being buried in a landfill is true; in fact, it has been immortalized over the years by various pop culture references, from G4's "Code Monkeys" to rock band Wintergreen's music video for "When I Wake Up." The millions of copies of E.T. the game that were returned, along with millions of other Atari games that sold poorly, were indeed buried in a New Mexico landfill. About 10 million game cartridges were reportedly shipped back to the company's warehouse in El Paso. Once a landfill location was picked in New Mexico, the cartridges were steamrollered and buried in concrete.
Currently, a small group of students from Auburn University in Alabama are working on a documentary, titled "E.T.'s March," that will "unearth" the story behind E.T. the game and the cartridge graveyard in New Mexico. As the group's Web site states, "E.T.'s fate stands as a reminder of what can happen when video games go wrong." Indeed.
Stay tuned for more installments of Gaming's Biggest Disasters.
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