The system was based on vector hardware designed by Wendi Allen[Note 1] which was introduced in Lunar Lander and saw success with Asteroids.

[10] Gameplay takes place on a flat plane with a mountainous horizon featuring an erupting volcano, a distant crescent moon, and various geometric solids (in vector outline) like pyramids and blocks.

As the game continues, missiles begin to appear in place of the enemy tanks; these move much faster and are more difficult to hit.

Periodically saucer-shaped UFOs will appear while making a distinctive sound to announce their presence; these do not show up on the radar and do not attack the user, but can be shot for bonus points.

While Allen worked on the driver hardware and Moncrief on the display system, Rich Moore wrote the software for the game.

[16] Lunar Lander was released in August 1979, Atari's first vector game, but was not a great success with only 4,830 units manufactured.

[15] Another team at Atari consisting of Lyle Rains, Ed Logg, and Steve Callfee was working on a raster graphics game called Planet Grab.

[15] With the system now proving a huge success in the arcades, Morgan Hoff organized a brainstorming session at Atari to consider additional uses for the hardware.

While Battlezone also has similarities to a first-person tank simulation for the PLATO system, Panther, Rotberg said he had never played that game before, but had heard of it; he stated that it "may have inspired whoever originally suggested the idea at the brainstorming meeting where it was proposed, but I seriously doubt it".

[17] Owen Rubin, who shared an office with Ed Rotberg, had the idea of making the volcano in the background erupt, and coded the animation for it.

[15] Battlezone was well received, earning an Honorable Mention for "Best Commercial Arcade Game" in 1982 at the Third Annual Arkie Awards.

[21]: 76  David and Sandy Small called it "addictive" and mentioned the Battlezone Tunnel Vision, which makes the players drive strangely during rush hour.

[25] Computer and Video Games magazine awarded the Spectrum version of Battlezone 30 out of 40 points, praising its technical achievements such as the implementation of hidden line removal.

[28] Only two were produced; one was delivered to the Army and is presumed lost, and the other is in the private collection of Scott Evans,[32][33] who found it by a dumpster in the rear parking lot at Midway Games.

The gunner yoke was based on the Bradley Fighting Vehicle control and was later re-used in the popular Star Wars game.

Due to its use of first-person pseudo 3D graphics combined with a "viewing goggle" that the player puts his or her face into, Battlezone is sometimes considered the first virtual reality arcade video game.