The decline of Atari and their disastrous E.T. video game
Mar 14, 2025
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The rise and fall of Atari takes center stage, spotlighting the infamous E.T. video game that marked a catastrophic shift in the company's fortunes. Rushed development and poor design decisions turned a promising concept into a monumental failure. The podcast also delves into how Atari's struggles paved the way for Japanese gaming giants like Nintendo and Sega. And, of course, there's the legendary tale of buried E.T. cartridges, a somber reminder of hasty choices in game production. Evolution in gaming is explored, contrasting the complexity of modern titles with the simplicity of the past.
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Quick takeaways
Atari's decline was primarily triggered by the rushed production of the E.T. video game, leading to poor sales and financial losses.
The gaming market's shift towards personal computers and foreign competitors in the early 1980s highlighted the changing consumer preferences, further challenging Atari's dominance.
Deep dives
The Impact of the E.T. Game on Atari
Atari faced significant challenges following the release of the E.T. game in 1982, which is often cited as a major factor in the company's decline. The game's production was rushed, with the designer given only five weeks to create it to meet the holiday season demand, resulting in poor gameplay and high production costs. Despite the immense popularity of the E.T. movie, the game failed to resonate with players and only sold 2.6 million copies, far short of the 4 million needed to break even. This failure, combined with other missteps like a poorly received Pac-Man release, drove Atari into substantial financial loss and marked the beginning of its downward trajectory in the gaming industry.
Market Changes and Decline of Console Dominance
Atari's struggles exemplified a broader shift in the gaming market during the early 1980s, characterized by an oversaturation of console games and the rising popularity of personal computers for gaming. As consumer preferences evolved, titles from foreign companies like Nintendo and Sega began to dominate the market, leading to Atari's near absence in the subsequent years. By 1983, Atari reported losses of approximately $310 million, highlighting how the combination of rushed product launches and changing consumer interests contributed to its decline. This paved the way for foreign competitors to establish themselves, marking a significant period of transition and struggle for American gaming companies.
Lessons from a Failed Launch and Modern Gaming Dynamics
The story of the E.T. game serves as a cautionary tale about the importance of taking time to develop quality products and avoiding rushed releases. In today's gaming industry, successful titles typically require years of development and extensive testing, contrasting sharply with the hasty production era of the 1980s. As modern games can receive patches and updates post-launch, the stakes are considerably lower for studios compared to the fixed nature of physical media releases from Atari's time. Ultimately, the E.T. game's legacy continues to remind developers of the critical importance of quality and consumer engagement in creating successful gaming experiences.
Gaming company Atari had a great start to the 1980s with ‘Raiders of the Lost Ark,” but they soon blundered in 1982 with an E.T. themed game. This would signal the end of Atari’s Golden Age, but how did E.T. put them in such a ditch? Plus: Intel gets a new CEO and 3D printed homes are here.
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