In 1974, Atari released a driving game called Gran Trak 10. The development prototypes had used real car steering wheels and pedals, but it was realized these were too expensive, so they were changed for the production version.
Nonetheless, due to a dreadful miscalculation, it turned out (according to Atari, Inc: Business is fun, page 250), the game cost $1095 to produce, while it was being sold for $995, losing a hundred dollars on each unit. This was a large part of the reason Atari ended up with an annual loss of over half a million dollars, earning Gran Trak 10 the title of "the game that nearly put Atari out of business".
Clearly there was too much firewalling between different parts of the company, but I am also curious about the material causes. How did the game end up costing $1095 to produce? It doesn't look that much more complex than Pong - it's described as perhaps the first game to use a ROM chip, but one ROM chip surely cannot have been that expensive - and Pong has been said to have cost $300 to produce. Where did the extra cost come from?