Hollywood Under Threat…

As videogame sales increased, movies looked like they were under threat. Disney tapped into the zeitgeist with Tron yet other Hollywood studios felt under siege from a new business model.

“There isn’t a company in the US at the moment that isn’t hoping to get into videogames,” said Tron helmer Steven Lisberger in the autumn of 1982.

“You hear it the whole time: ‘We’re in the meat-packing business, but my son’s hoping to start a videogames division.’ Yes there is a danger that movies are going to end up being expensive commercials for videogames. The whole thing is moving so fast it’s crazy.” Oh, those heady days...

When Atari signed a deal worth around $22m with Spielberg and Universal to create a video game based on E.T. it looked like a licence to print money.

Spielberg agreed on condition that the “certifiable genius” Warshaw would be in charge of it. Warshaw agreed but faced one huge hurdle.

While most videogames took six months to design and create, deadline chaos meant E.T. had to be turned around in just six weeks.

Few programmers could have got a finished game completed in that time. Warshaw did but there was just one problem. The game proved too frustrating; E.T.’s quest to find the missing pieces of his intergalactic phone forcing players into spending most of their time falling into pits that had to be slowly levitated out of.

In his own inimitable style Warshaw had trumpeted the Atari E.T. as “the game that would make the movie famous”. It didn’t quite pan out like that.

Atari actually sold a million-odd copies on hype alone, yet the company had overstretched itself, paying too much for the licence and producing too many cartridges. Bad word of mouth killed sales and the glut helped fuel the videogame bust of ’83.

Left with a mountain of unsellable cartridges and recording a $564m loss, Atari decided to bury E.T. – literally. Hollywood 1, Videogames 0.

Next: Into The Lair...