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Thanks in part to the E.T. debacle, Atari lost $536 million in 1983 and dumped their home gaming division in '84. But, E.T. wasn't the catalyst, so much as the logical conclusion of policies that had been in place for years. Freedom to get high and party aside, Atari's programmers began to feel stifled by increasing influence from management and marketing. Their instructions shifted from "Make a game that's fun" to "Make what we tell you, fun optional."

Atari

"Eh, good enough. Now, back to work; time is money."

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"You have to understand the disconnect between management and technology. Atari was one of the first video game companies. So, it was full of programmers who were making entertainment products, a position they had never been in before. And, in management, you had people who were either used to classic formal management or people from the entertainment industry who have no concept of technology. They didn't understand that [games were] a whole new beast. To a classical manager, a programmer looks like any other blue-collar worker on a production line. But, they're not -- they have to do a lot more of the design. And they never really got that; they treated us like what their idea of a blue-collar worker was. And we resented that. It wasn't a great setup."

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That resentment led to a mass exodus of programmers (some of whom went on to form a little company called Activision). Meanwhile, E.T. wasn't the only bad game Atari vomited out. They got the rights to make the home version of some game called Pac-Man. Pac-Man was another pop culture phenomenon, so Atari followed the same logic -- Popular Game plus Popular Brand equals Mega Hit, quality optional. They printed a staggering 12 million copies, even though they had only sold 10 million consoles. The rushed game was buggy, and "only" sold 7 million copies. That was considered a failure. Gamers felt burned by Atari, and they learned the valuable lesson that games could be bad.

Ralston Purina

And they were going to get a lot worse before they got better.

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E.T. was just the biggest and most disastrous product of that mindset, so it gets all the blame. But, Howard doesn't mind. If you're going to be famous in your industry for making a failure, it might as well be the biggest damn failure in that industry's history.

Check out Howard's Atari documentary, Once Upon Atari, right here, or try playing E.T. in your browser. Mark has a story collection and a Twitter.

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