Cloak & Dagger started out as a game called "Agent X". When Atari and the producers of the film Cloak & Dagger learned of each other's projects, they cooperated and the game became a critical part of the film. Dabney Coleman's character in the film, Jack Flack/Agent X, was named as a part of this collaboration.

The game saw a limited arcade release, and a conversion kit was used on various Williams' arcade cabinets to change them to Cloak & Dagger cabinets. The Cloak & Dagger game screens from the movie are mostly from this arcade version, and not the Atari 5200 game console as it would appear in the film. An Atari 5200 version of the game was actually in development, but was never completed due to the gaming crash of 1983. The cartridges in the film are simply other Atari 5200 games with a Cloak & Dagger label on them.