Many factors caused the Video Game Crash starting in 1983, but one of the most significant was Atari’s overconfidence. Atari was the leader in home video game consoles throughout the early ‘80s, and took their nearly indomitable lead and squandered it with a string of disappointing games coupled with over-optimistic sales projections.
Pac-Man, Namco’s 1980 arcade hit, was incredibly popular, and Atari acquired the license to make the game for their home console. Once they decided to make it, development was fast. It took four months, but the Atari system was not up to the task. The game was a poor copy of the arcade original. Despite this, Atari knew demand would be high and made 12 million copies - even though they had only sold 10 million consoles. Sales were initially fantastic. However, after the first few months, they tapered off dramatically, leaving Atari with over 5 million unsold copies, not including tens of thousands of returned copies from unsatisfied gamers.
In December of ‘82, Atari released another highly anticipated game that was similarly rushed into sales. The video game for the movie E.T. the Extra-Terrestrial was a big deal for Atari - they paid $25 million for the license to make the game. Then they gave the programmer only 5 weeks to complete it. What resulted is infamous for being one of the worst video games of all time. Atari produced 4 million copies, and 3.5 million of them were either unsold or returned.
With millions of cartridges lying around unsold and worthless, Atari decided to get rid of them. In 1983, they reportedly took 10 to 20 semi trucks to Alamogordo, New Mexico, and dumped the games at a landfill there, where they were crushed, buried, and covered with concrete.
This dumping became something of a legend, with many doubting that it ever actually happened. However, in 2013, a movie crew filmed a documentary there, uncovering the site of the burial. Only about 1,300 cartridges were uncovered, as the remains were deeper than had been anticipated.
Atari was effectively done as the dominant company in video games, leaving a vacuum that would soon be filled by a name that would become synonymous with video games: Nintendo.