By Clark Collis
July 01, 2013 at 02:00 PM EDT

We may never find out if Big Foot exists, who Carly Simon wrote “You’re So Vain” about, or whether Leonardo DiCaprio is dreaming at the end of Inception. But there is one pop culture mystery which might be cleared up in the near future. For decades, it has been rumored that Atari buried millions of copies of its E.T. videogame at a landfill site in Alamogordo, New Mexico. Now, the Alamogordo city council has given the Los Angeles-based Fuel Entertainment permission to search the site for a film project and find out if one of the videogame industry’s most enduring myths is fact or fiction. “The dumping of the E.T. cartridges has always been one of the biggest urban legends in videogame history,” says Mike Burns, cofounder and CEO of Fuel Entertainment’s parent company, Fuel Industries. “We wanted to find out what’s really in there and put an end to the rumors.”

This particular tall tale could be true. In the summer of 1982, Atari’s parent company Warner Communications (which would later merge with Time Inc. to become the Entertainment Weekly-owning Time Warner) reportedly paid $23m for the rights to make a videogame from Steven Spielberg’s movie E.T. the Extra-Terrestrial for its then wildly popular 2600 console. The film, of course, was a box office sensation when it hit screens in June, 1982, and Spielberg’s tale of a boy named Elliott and the adorable alien he befriends ultimately overtook Star Wars to become the most commercially successful film of all-time. But Atari’s E.T., which came out in the Fall following the film’s debut, was one of the most financially disastrous releases of all-time and is now widely regarded as among the worst.

On September 28, 1983, the New York Times reported that Atari had dumped “14 truckloads of discarded game cartridges and other computer equipment at the city landfill in Alamogordo, N.M.” and then poured a layer of concrete on top. An Atari spokesman told the newspaper the cartridges came from the company’s plant in El Paso, Tx., which had formerly made games but which had now been converted to recycling scrap. In time, the legend grew that the landfill site was now the subterranean home to a vast cache of E.T. games. In 2006, the Los Angeles band Wintergreen even shot a video for their song “When I Wake Up”, which found them searching for the stash of cartridges. Meanwhile, the plot of a forthcoming film called Angry Video Game Nerd: The Movie hinges around the titular character’s attempt to prove that the games are not buried in the landfill so that “maybe then everyone can forget about this game.”

Howard Scott Warshaw, the man who designed the E.T. videogame is actually happy for it to be remembered, even if those recollections are not always positive. “You know, 30 years after doing that piece of work, people are still talking about it,” he says. “And if you go with the Hollywood slogan of, ‘There’s no such thing as bad press,’ the fact is, I did a piece of software 30 years ago, that is still getting press notoriety. So when you do something that lives that long…Well, there’s something there.”

The Sunnyvale, CA.-based Atari was a notoriously work-hard-and-play hard company which encouraged creativity and individuality and turned a blind eye to, say, some creative individuals smoking weed in the office. In the mid-aughts, Warshaw would produce a documentary about the company called Once Upon Atari. Interviewees included game engineer Carla Meninsky who recalled, “Atari was a really crazy place. You had to look where you were going because otherwise you might be hit by a flying lemon—people were playing bocce lemons in the hallway. My first or second day there I saw all these men coming out of the women’s bathroom. I thought this was kind of odd. I found out that there was a little lounge room that was off the main bathroom, that they would all get in there to get stoned. That was Atari.”

In October 1976, Atari’s larger-than-life cofounder Nolan Bushnell sold the company to Warner Communications for $28m, but stayed on to oversee the launch of the company’s new game console, the VCS 2600, which was released a year later. Initially, the console sold poorly and Warners hired Ray Kassar, formerly an executive with the fabric manufacturer Burlington Industries, to consult at the company. For his first day at Atari, Kassar wore a suit and tie while Bushnell met him clad in a t-shirt emblazoned with the slogan “I love to f—.’ In January 1979, Bushnell left the company to concentrate on developing the Chuck E. Cheese chain of restaurants — a division of Atari whose rights he had bought back from Warner —  and Kassar was made chief executive. A year later, Atari released Space Invaders to the 2600, a game which would propel the company into the stratosphere. In 1982, the success of Space Invaders would be trumped by that of Pac-Man, whose sales would ultimately top 12 million worldwide. Virtually from nowhere, videogames had become a pop culture phenomenon and Atari a commercial juggernaut. Incredibly, the company was now contributing 70% of the profits of Warner whose sales, just as incredibly, had grown from $775m in 1976 to $4bn just half a decade later, despite the many economic problems affecting the country at the time. On November 8, 1981, the Washington Post published a story about Kassar’s golden goose which declared, “In the fun and games empire of Warner Communications, there’s no recession and no prospect of any because the company owns the surest antidote to economic hard times: a money machine. It’s name is Atari.”

Among those reaping the rewards of Atari’s phenomenal success was Warner Communications CEO Steve Ross. The Brooklyn-raised Ross was a legendary dealmaker who, as a child growing up in Flatbush, would borrow money from his father, buy cut-price cartons of cigarettes at the local supermarket, and then sell individual packs to his dad at a profit. In the ‘50s and 60s he merged together an array of diverse businesses, including a car rental firm and an office cleaning company. In 1969 he bought the Warner Brothers-Seven Arts film studio and record company for $400m and three years later renamed them Warner Communications. By 1982 Ross was keen to get into another business — the Steven Spielberg business. The director had started his career at Universal for whom he made the 1968 short film Amblin’ and many of his subsequent films, including Duel, Jaws, and E.T were also produced under the company’s auspices. Warner Bros., the film arm of Warner Communications, had a lean time of it in the preceding couple of years and Ross, a huge movie fan, was keen to lure Spielberg to the company. That desire would only have increased with the success of E.T., which opened at number one at the box office when it was released on June 11, 1982 and remained in pole position for the next five weeks.

According to author Connie Bruck’s 1995 biography of Ross, Master of the Game, he and Spielberg met in 1981 and developed a relationship. The director would later describe it as being “without agenda,” explaining that Ross never tried to persuade him to work for the studio. But it seems that by the time of the release of E.T. Spielberg had promised Ross that his company would have the first opportunity to get the rights to the film’s spin-off game. However, when Charles “Skip” Paul, the head of Atari’s coin-operated games division, offered MCA/Universal chief Sid Sheinberg $1m plus 7% of the game’s royalties he was turned down. “Then I was told that the deal had been done over a weekend, at East Hampton, between Steve and Steven—and that it was for $23m,” Paul is quoted as saying in Master of the Game.

Over the next few years, Spielberg directed and/or produced a large number of movies for Warner Bros., including Gremlins, Goonies, The Color Purple, and Empire of the Sun. But the timing of the deal would prove disastrous for Atari. In order for the game to be in stores for the all-important run-up to Christmas market it had to be finished by September 1. As the deal was not done until almost the end of July that left just five weeks for the game’s code to be written, a process which at the time usually took in the region of six months. To some at Atari, this seemed like not merely a difficult mission but an impossible one. “No one had really ever done a game in less than six months or so,” says Howard Scott Warshaw. “So, to do a game in five weeks was absurd. They called the head of the department and he just told them that five weeks is not enough time. Then Ray Kassar, the CEO of the company, called me, the only time he ever called me, and said, ‘Can you do a game in five weeks?’ And of course, I had the hubris to say, ‘Well, sure I can do it!’”

Next: “I’ve read articles saying E.T. is solely responsible for the crash of the videogame market. I would love to believe that I have that kind of power.”

Warshaw had joined Atari in early 1981 at the age of 23. He spent the previous couple of years at Hewlett-Packard where he had worked on the software for the Advanced Research Projects Agency Network, or ARPANET, in effect an early iteration of the Internet. “Al Gore invented the Internet but I actually worked on it,” he laughs.

Despite the ultimately world-reshaping nature of his job, Warshaw says Hewlett-Packard was a less than thrilling place to work. “It was like a software pasture where programmers go to die,” he recalls. “I was just bored there. I lost all my passion and excitement. I used to do some wacky stuff and one of my coworkers used to go home and tell ‘Howard stories.’ His wife said, ‘You know, that’s just sort of de rigueur for the things that go on here.’ My coworker told me about that and I said, ‘Where does she work? And he goes, ‘It’s a place called Atari.’”

Warshaw liked videogames fine, but wasn’t as big an enthusiast as some of this friends. What he did love was microprocessors. “I was nuts for microprocessors, like really intense microprocessor applications,” he says. “That’s what videogames were for me. So I interviewed with Atari. They didn’t offer me a job because they felt I would be too straight and wouldn’t fit into their environment, which turned out to be a very funny joke in retrospect. But I begged them — I literally begged and pleaded with them and took a cut in pay and they let me take a try. And I went on to have quite a career.”

Warshaw’s time at Atari certainly began auspiciously enough. His first game, a sci-fi shoot-em-up about mutant house flies called Yars’ Revenge, shifted over a million copies and became Atari’s bestselling original title for the 2600 console. Following that, he was tasked with designing a game based on Spielberg’s 1981 hit movie Raiders of the Lost Ark, which would in the end hit shelves around the same time as the E.T. cartridges. “I flew down to LA to have a meeting with Steven Spielberg, so he could check me out and see if he wanted me to do Raiders of the Lost Ark,” recalls Warshaw. “I showed him my first game and he really enjoyed that and we hung out for a little while and chatted enjoyably. I told him I had a theory about how he himself is an alien. I explained to him this whole story about how I felt that aliens are going to come to meet us but they’re not going to just show up in a spaceship and go, ‘Here we are!’ What they would do is send an advance team out to culturalize the planet, to prepare us to meet them, so you wouldn’t have any of the horror stories we typically depict in movies. Spielberg was one of the first people who was creating movies with sympathetic aliens and I figured he was the production arm of the advance team. He thought that was really charming.”

Given Warshaw’s history with Spielberg, it is unsurprising he subsequently got the gig designing the E.T. game, although this caused some disgruntlement amongst his peers at Atari.  “It was announced internally in our department that I got to do E.T. after I had just done Raiders of the Lost Ark and everybody goes, ‘Oh, well, Howard gets to do all the good movies titles,’” he says. “We’re having a department meeting at that time. I stood up and I said, ‘I’m going to finish this game by September 1.’ And this is like July 30 or 31. I said, ‘Anybody else in this room who’d like to do this game, just say so, I’ll give it to you. Anybody? Anybody wants to sign up for this?’ And no one did.”

Despite the extremely limited time frame, Warshaw determined that the game would echo the emotional drama of Spielberg’s film. “I wanted to do something innovative and revolutionary,” he says. “You’re doing a game from a movie, right? [I thought] when people purchase this game, what they’re going to be looking for is the emotional experience they had with the movie. They don’t expect you to replicate the movie. But they expect you to replicate the fun and the feeling they had from the movie. So, with Raiders of the Lost Ark, that’s an action movie and so it’s very clear what you do with something like that. Making a game from an action movie is easy. E.T. was an emotional film. It’s very much a tearjerker, it’s find-the-child-inside, it’s an emotional tone picture. I tried to do that in a videogame — which I’m not sure was a great idea, but that’s what I tried to do.”

Warshaw conceived of a game in which the player would guide E.T. into, and out of, a series of pits, collecting pieces of an interplanetary phone whilst being pursued by a doctor and an FBI agent. After spending a couple of days roughing out his idea the designer met again with Spielberg. “The deal we had was that Atari marketing was not going to be the people that approved the game, that Spielberg was the one that was going to approve the game,” says Warshaw. “We flew down and I presented him my version: ‘Here’s our world, you’ve got to put the phone together, it kind of makes sense.’ He looked at it and he looked at me and he goes, ‘Couldn’t you do something a little more like Pac-Man?’ I was so shocked to hear him say that. My impulse was to say to him, ‘Jeez, Steven, couldn’t you do something a little more like The Day the Earth Stood Still?’ But I didn’t. I wasn’t that far gone. I said, ‘I don’t know whether we could really work that into the schedule.’ And he said, ‘Okay, well this sounds fine.’”

Which just left Warshaw the task of having to physical design a videogame in a single month. “I don’t know that I had ever worked so hard in my life,” he says. “It was an incredible task of working mostly around the clock for five straight weeks. I designed a game that you could do in five weeks. What I didn’t allow for was enough [time for] tuning and tweaking and getting enough feedback. Because by the time you get the base code enough together that the game is essentially playable we’re already very close to release. So it was a gamble.”

And a huge gamble at that. By the late summer of 1982 audiences were still flocking to see E.T. on the big screen and Atari produced in the region of 4m copies of game. While both Raiders of the Lost Ark and E.T. would join Yars’ Revenge as million-sellers the latter never became the megahit the company had hoped. “I tried to get the emotional tone of the film in the videogame, where nobody’s dying and people are trying to work together,” says Warshaw. “I’m not sure that was a super concept for videogames. People like killing stuff. They like wiping stuff out.” Players also had a hard time retrieving E.T. from the game’s many pits. “The pits which turned out to be…the pits,” admits Warshaw. “I did not tune it well enough to make the interaction of entering and leaving the pits clear enough.”

The failure of the E.T. videogame marked the start of a grim chapter for Atari, Warner Communications, and the videogame industry. In December 1982, Atari announced that its expected growth figures for the fourth quarter of the year would be 10–15% rather than the expected 50%. Warner Communications’ share price fell by almost 50% and would ultimately collapse to a low of $19. In 1982, Atari had earned $323m, but in the first three-quarters of 1983 it bled a staggering $536m. In the summer of that year, Warner hired a new Atari CEO, former Philip Morris marketing executive James. J. Morgan, who laid off more than half of the company’s 7,000 workforce. In 1984, Warner sold Atari’s console division to Jack Tramiel, founder of the computer company Commodore International.

At least Atari still existed — indeed, it continues to exist today, although this past January the company’s U.S.-based operations filed for Chapter 11 bankruptcy. But many companies folded as the videogames market as a whole simply disintegrated in the mid-’80s. According to Tristan Donovan’s 2010 book Replay: The History of Video Games, sales from the home console market fell from $3,200m in 1983 to just $100m in 1986. The factors responsible for this crash were many and included the sheer volume of — often very poor quality — games being produced and the rise of the VCR. Not that this has prevented some people blaming Warshaw’s creation for the entire fiasco. “I’ve read articles where they go, ‘E.T. is solely responsible for the crash of the videogame market,’” laughs the designer. “I would love to believe I have that kind of power — with just 16K of assembly code I could trash a billion dollar industry. I just don’t think it’s true.” Warshaw also disagrees with the notion that E.T. is one of the worst, possibly the worst, videogame ever created. “It was a huge mountain to scale — I mean, what a challenge,” he says. “So I tried it and I did deliver the game. Not the greatest game by any means. Not the worst game, by any means.

Next: “We’ve had everybody from the sober to the insane contacting us. There are so many conflicting stories. The only way to find the truth is to dig it up.”

If the myth that E.T. was solely responsible for the evisceration of the videogame industry is easy to debunk that of the Alamogordo landfill is much less so. On September 27, 1983—the day before the New York Times article reporting on Atari’s dumping of the cartridges—the Alamogordo Daily News ran a story detailing the city commissions’s decision to consider an ordinance which would limit out-of-area dumping at the landfill. The proposal, according to the newspaper, followed “the dumping of 11 semi-trailer truckloads of Atari computers, cartridges and assorted parts from an El Paso warehouse in the dump since last Thursday.” An Atari spokesman quoted in the article said that “the majority of the stuff is cartridges” but that the items deposited at Alamogordo were “by-and-large” inoperable. The piece did not specifically mention Warshaw’s game but was headlined “City to Atari: ‘E.T. trash go home.” It is unclear, however, whether that refers to the dumping of E.T. games or the fact that the materials originated from outside Alamogordo. Indeed the exact details of what Atari deposited at Alamogordo would soon become blurry. As early as December 1983, for example, the technology magazine Infoworld reported that the company had dumped 20 truckloads of games, consoles and computers in the landfill, rather than the 11 reported by the Alamorgodo Daily News (or, for that matter, the 14 truckloads mentioned in the New York Times). But the idea that the site had become the graveyard for one of the supposedly worst games would become firmly rooted in gaming mythology.

In 2006, a Philadelphia-based gaming enthusiast named James Rolfe started uploading videos to YouTube in which he reviewed games as his ticked-off, foul-mouthed alter-ego The Angry Video Game Nerd. The series proved popular and viewers began suggesting future targets, including the E.T. game, which Rolfe had not at that point played. “They said, it’s the worst game of all-time and they kept requesting it and requesting it,” he recalls. The E.T. episode involved some harsh words (“Just stay the f— away from this awful piece of s—“), although Rolfe says he actually quite likes the game. “It can be frustrating,” he admits. “But a lot of the most interesting games are frustrating because you can’t put them down until you beat it.”

Rolfe became fascinated by the legend of the Alamogordo landfill site—and by the gaming community’s fascination with it—and decided to make an Angry Video Game Nerd film hinged around the subject. “The ‘Nerd’ starts to feel that reviewing all these bad games is actually making the games become more well-known,” explains Rolfe of the film, which is currently in postproduction. “He’s starting to feel responsible for all these people playing these games that tormented him as a child. The E.T. game is the one that he has the worst phobia of and he feels that the story of the landfill is only making the game more infamous. So he decides to debunk the whole story of the landfill. Then he finds out that Alamogordo is only a couple hours away from Roswell, site of another ‘E.T.,’ and all kinds of crazy stuff happens after that.” In the fall of 2011, Rolf launched an Indiegogo financing campaign, hoping to raise $75,000. He actually received $335,000 in donations. “We shot in the Los Angeles area in April and May of 2012,” he says. “We were going for a desert look, to match the landscape of Alamogordo.”

The cast of Angry Video Game Nerd: The Movie includes Warshaw who plays himself in the film. The E.T. designer says he first started hearing that large quantities of his game had  been buried at Almogordo several years after it was released but that he personally doesn’t believe the legend is true. “That whole thing just never really made sense to me, on several levels,” says the designer, who left Atari in 1984. “First off, this is a company that is suddenly in real financial jeopardy. So they’re going to hire teamsters and truckers and cart millions of cartridges way out into the middle of the desert, bulldoze them over, and then cover them all with cement? That’s what you do with nuclear waste! That’s an expensive operation. Why not cannibalize the inventory for what you can recover and save some money that way? The other thing is, I was tied into the grapevine at Atari. I can’t help thinking someone [would have] said, ‘Hey Howard, they’re dumping your games in the desert.’ If I had heard that I would’ve grabbed a photographer and flown both of us out there to get a good picture of me standing on top of the pile. I just would have had to have that photo. That would have been a great keepsake for me. I never heard anything like that.”

While Rolfe was acting out the Nerd’s fictional mission to prove the E.T. cartridges weren’t buried in the fake New Mexico desert Fuel Entertainment production executive Daniel Schechter was questing for permission from the Alamogordo city council to prove the games are buried in the city’s landfill.  That mission came to a successful end on May 28 when the council granted Fuel access to the site for the next six months. “They’ve been super supportive,” says Schechter. “A lot of people in the city are as fascinated by the story as the rest of the world.”

According to Alamogordo mayor Susie Galea, opinion is divided locally as to what Fuel will find when the company begins to dig at the site. “Some do think it’s a rumor, a myth, an urban legend,” says Galea. “But then there are those residents who actually did loot through the landfill as children and recovered some E.T. games.” Galea hopes the publicity will encourage people to visit a town whose other main claim to fame is being close to the desert site where the first atomic bomb was detonated.  “Alamogordo is isolated geographically,” says Galea. “You don’t know about Alamogordo until you actually come upon it. But it’s really and truly an oasis in the desert. People are just excited to share the beautiful part of the country we live in.” So, if Fuel does find a vast cache of E.T. videogames to whom would they belong? “The city would own them,” says Galea. “Once you dump in the landfill it becomes the property of the landfill owner. We don’t like to claim our trash,” she laughs “but in this case we will.” Which begs another question: What would the city of Alamogordo do with a million E.T. videogames? “We have not discussed that just yet,” says Galea “I do know that the Atari E.T. videogames on eBay can go for as little as $3. So they’re not very valuable. But perhaps if they come from this urban-legend-E.T.-tomb and they’re specially packaged, perhaps they would have more value than that. I’m not sure.”

Galea reveals that Fuel was not the first corporation to investigate the possibility of digging up the landfill site. “There were other companies before Fuel that had a soft interest,” she says. “But Fuel sent a contract over to the city to approve and we discussed any ramifications as far as the environment and the commission approved it. We were excited to do so. It is such a large, well-known urban myth amongst the gaming community and we wanted to find out, fact or fiction, if the E.T. Atari games are truly there.”

Fuel CEO Mike Burns says he is a videogame fanatic who spent much of his childhood “glued in front of my s—-y 22-inch RCA color TV playing Pac Man and Space Invaders.” But quite why he is so determined to find out whether E.T. cartridges are buried in the New Mexico desert is itself something of mystery. Fuel Entertainment is described on its own website as creating “entertainment properties for today’s emerging audiences that spark imagination wherever viewers go.” More concretely, the company’s activities have included creating  Spark City World, a gaming and social media portal aimed at young girls. But the company has never before produced a film and the affable Burns becomes vague when asked about the exact nature of the project. He also says he is “not at liberty” to discuss whether he has been in contact with either Atari or Spielberg. (A spokesperson for the director told EW he “would not be associated with this excavation.”) “We are right at the beginning stages of this,” says Burns. “The project that we’re looking to develop, it has a number of different facets, and it can take shape in a lot of different ways. It wasn’t our intention to have media coverage so early in the game. But because this went to the Alamogordo city council, and that’s public, a little bit got leaked.” Indeed, news of the project has spread like wildfire around the blogosphere and beyond over the past few weeks. “We’ve had everybody from the sober to the insane [contacting us]” he says. “There are so many conflicting stories. The only way to find the truth is to dig it up.”

Howard Scott Warshaw, meanwhile, has found a new passion, one he finds even more satisfying than creating videogames. “I’m a marriage and family therapist,”says Warshaw, who is based in Cupertino, CA. “I’ve been on this about four, five years and I’m truly truly loving it. I think this is my calling. Before this, making videogames at Atari was truly the thing that I was made for. I mean, it was a brilliant match between me and the job. But this is actually better. I’m helping people actually improve their lives instead of just avoiding boredom. I’m very proud to be doing this work.”

Of course, even therapists get down from time to time. And when Warshaw feels like cheering himself up he plays an interview clip from the early ‘80s in which Steven Spielberg talks about the E.T. game. “He talks about [how] there’s a guy, Howard Warshaw, for Atari who did the game,” the designer explains. “And he refers to me as a certifiable genius. So that’s a pretty good thing to have in your pocket, right? If I’m having a bad day, if I’m feeling kind of down and things are kind of rough, I watch Steven Spielberg call me a certifiable genius. And I feel better.”

Read more:

The ‘Troll’ trilogy: Is this really the ‘Best Worst’ movie franchise of all time?

Fishy Business: The behind-the-scenes story of the ‘Piranha’ movies (Part I)

The 10 best Atari games

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