The game experienced great sales at first, but due to most players not understanding how to play the game, which is explained in the manual, many were returned. Atari didn't earn as much money as they expected, and consequently this game is considered to be one of several factors to Atari's downfall. Alongside the Atari 2600 port of Pac-Man, it is also a huge contributing factor to the North American video game crash of 1983.

Warner and Atari were so confident that they would have the biggest game of 1982, they ended up paying somewhere in the region of $20-25 million dollars for the license. They then assigned the project to Howard Scott Warshaw (who programmed Yars' Revenge amongst other games for Atari), and gave him a strict deadline of five and a half weeks to make the game in time for the 1982 holiday season. This was because the game adaptation rights were only secured by Atari in late July, weeks after the film's release, and development had to be completed by September to allow for the time needed to manufacture and distribute cartridges in time for the Holiday season. Warshaw developed most of the game by himself, with about 1.5K of graphics provided by Jerome Domurat. Atari felt confident that the game would sell well based off of the name recognition alone. They produced 5 million copies of E.T. the Extra-Terrestrial (more games than there were Atari 2600 consoles in homes), and only managed to sell 1-2 million.

For a long time it was rumoured that Atari buried its inventory of unsold E.T. cartridges in the New Mexico desert. More than 30 years later in 2014, the E.T. cartridges were found, along with other buried games and even Atari consoles themselves.

It's possible to find a secret flower in a pit, which when collected, gives E.T. an extra life. However, collecting 7 Recess Pieces, giving them to Elliot, collecting all three phone pieces, then finally locating and reviving the flower will cause it to transform into Yars from Yars' Revenge who will then fly away. Completing the game and then completing this process again will cause the flower to transform into Indiana Jones from Indiana Jones and the Raiders of the Lost Ark. Completing the game for a third time and completing the process will cause the initials of Howard Scott Warshaw, who programmed all 3 of the games, to appear at the bottom of the screen.

The pieces of the phone can be read cryptically as the letters "HSW", the initials of the game's designer Howard Scott Warshaw.