Editor’s note: The Trivia Geek is on extended leave, but he did get off his slacker butt long enough to pull this Classic Geek, which originally ran on Jan. 4, 2005, from the archives.

As retailers obsess over the last few days of their life-and-death
holiday shopping season—one that will owe much of its success or failure to
today’s more-popular-than-every-other-toy-available video game systems—it’s
worth taking a look back at an equally crucial December. That would be 24 years
ago, when the first—and perhaps greatest—market bubble burst for video game

On Dec. 7, 1982, Warner Communications’ Atari division
reported a respectable 10 to 15 percent increase in expected earnings. That
would have been fine, except for the fact that stock analysts had been
predicting a 50-percent bump in earnings for what was then the world’s most
powerful video game console manufacturer.

The fallout was not pretty.

A year later, Warner stock had bottomed out due to a
half-billion-dollar loss for Atari, and within a year after that, Warner had
divested itself of the withered Atari home console division (keeping the still
viable arcade division in-house). Warner had managed to decimate what was and
could have remained the first great home video game console empire, instead
acting out a cautionary tale that every modern game developer should heed.

The first of many mistakes the Warner-Atari partnership made
was believing its own hype. At the end of 1981, Atari
required distributors to place orders for the entire 1982 year all at once, all
in advance. So certain of its market dominance, Atari effectively forced
retailers to overbuy returnable Atari game products, never dreaming that the
market might shift over the next year, and those products might not sell, which
would leave Atari holding a multimillion-dollar bag.

The market did shift, mostly due to Atari’s second major
mistake. The company had bet heavily that two games would be sure-fire hits in
1982: Pac-Man and E.T., the latter based on the hit movie of the same name.

Atari manufactured millions of cartridges for both games,
but Atari’s Pac-Man was a hideous imitation of the extraordinarily popular
arcade version, and Atari’s E.T. ranks as one of the most unplayable games in
console history. Distributors returned the games to Atari in record numbers,
not only denying the company its expected profits, but forcing it to deal with
literal tons of non-sellable merchandise that could only devalue its existing
products if ever returned to the market.

Atari’s solution to that problem was legendary, if only to
illustrate the depth of the company’s miscalculations.


What legendary method did Atari chose to deal with the
massive returns of its Pac-Man and E.T. game cartridges in 1982?

It’s a tale sure to send a shiver down the spine of any
old-school video game fanatic. In September 1983, Atari dumped a significant
portion of its deadweight 1982 inventory—including a good number of E.T. and
Pac-Man cartridges—in a landfill in Alamogordo, NM.

The company considered the landfill shipment, which
reportedly numbered 14 truckloads when it left Atari’s El Paso, Texas plant, so
impossible to resell that it instead chose to simply dispose of the very same
inventory originally intended to buoy the game maker to record profits.

Now, before you begin formulating plans to excavate the
Alamogordo landfill in hopes of finding priceless Atari collectibles, you
should know that Atari already thought of this possibility. Rather than let
contemporary looters scavenge merchandise from the landfill and flood the
market with hyper-discounted games, Atari took the extra step of crushing all the
merchandise with a steamroller before dumping it.

And as if that wasn’t enough, Atari went the extra mile. The
game maker poured a concrete slab over the dump site after depositing the
crushed game contents.

Essentially, Atari had to admit that its own products were
garbage and therefore deserved such treatment. To be fair, however, the entire
video game industry was about to enter a painful downturn, though perhaps no
single company did more to injure itself than Atari.

As a console video game entity, Atari never fully recovered
from the disastrous Christmas of 1982, despite the release of several successor
video game systems throughout the 1980s and early ’90s. Its last-gasp attempt
at a viable game console was the 1993 release of the Jaguar console, which
simply never amounted to much more than a blip on the consumer radar screen.

In a strange twist of fate, the plastic moldings for the
Jaguar’s case have since found a new purpose as use for a high-priced digital
dental camera, which is about as close to success as any Atari console has seen
in the last 20 years.

Today, Atari is enjoying a retro-popular resurgence, thanks
to collections of classic Atari games on single CD-ROMs, which are playable on
modern non-Atari game consoles. Now that’s some ironic Geek Trivia.

Get ready for the Geekend

The Trivia Geek‘s blog has been reborn as the Geekend, an online archive of all things obscure, obtuse, and irrelevant—unless you’re a hardcore geek with a penchant for science fiction, technology, and snark. Get a daily dose of subcultural illumination by joining the seven-day Geekend.

The Quibble of the Week

If you uncover a questionable fact or debatable aspect of this week’s Geek Trivia, just post it in the discussion area of the article. Every week, yours truly will choose the best post from the assembled masses and discuss it in a future edition of Geek Trivia—namely, when the Trivia Geek gets back from his extended leave. (To read the original quibble from this article, see Listing A.)

Falling behind on your weekly Geek fix?

Check out the Geek Trivia Archive, and catch up on the most recent editions of Geek Trivia.

Test your command of useless knowledge by subscribing to TechRepublic’s Geek Trivia newsletter. Automatically sign up today!

The Trivia Geek, also known as Jay Garmon, is a former advertising copywriter and Web developer who’s duped TechRepublic into underwriting his affinity for movies, sci-fi, comic books, technology, and all things geekish or subcultural.