Penn & Teller designed the game alongside Barry Marx, while Eddie Gorodetsky provided the concept for Desert Bus.

Although the Sega CD version was finished on time and review copies were soon sent out, the financially stricken Absolute Entertainment could not afford to ship the game.

Absolute Entertainment ceased operations in late 1995, such that Penn & Teller's Smoke and Mirrors, including planned PC and 3DO versions, was canceled.

[4][7][8] In a planned competition, the highest-scoring player would have joined Penn & Teller on a real trip from Tucson to Las Vegas in a party bus and a subsequent visit to the Rio hotel and casino.

[3] The two players control Barry and Marshall and must shoot approaching animals to gain points, while hitting larvae incurs a score penalty.

[2][5] During gameplay, the owner can choose to covertly give either player a disadvantage, resulting in increased appearances of larvae and enemy projectiles on their side of the screen.

When the owner activates the scam, the third defeat of the mothership causes the game to play the sound of electric arcing and show static.

[4] The player controls Penn & Teller on their quest to take down the magician duo of Stinkbomb & Rot (a parody of Siegfried & Roy), who have convinced the population that magic is real.

[7][14] Some time later, Penn & Teller recorded their full-motion video sequences in a temporary blue screen studio at Absolute Entertainment's New Jersey headquarters.

[17] Morris was a vocal supporter of the company's adoption of Windows 95 and believed the PC user base to better represent the target audience for a Penn & Teller product.

[6] As Absolute Entertainment ceased operations and laid off most employees in late 1995, all versions of Penn & Teller's Smoke and Mirrors were put on indefinite hold.

Captain Squideo, reviewing it for GamePro, noted that the controls needed to efficiently play tricks were complicated, although their correct use was satisfying once learned.

[2] Ken Badziak of Electronic Gaming Monthly shared this sentiment, while Dan Vebber of VideoGames faulted the graphics in general.

[5] Zach Meston wrote for VideoGame Advisor that Desert Bus was "hysterical", whereas Vebber called it "brilliant in concept", even if boring.

[3][25] Vebber and Entertainment Weekly's Bob Strauss found little replay value in the compilation, while the reviewer for Mean Machines Sega labeled it a "crap idea" that should be avoided.

[23] Because Penn & Teller's Smoke and Mirrors was never officially released, press copies became valuable collector's items, even if they were empty boxes.

Paul Saunders, the group's co-founder, wanted LoadingReadyRun to use Desert Bus as part of a sketch, while another member, James Turner, sought to use their online presence to raise money for the charity Child's Play.

[36] A free homebrew version of Desert Bus exists for the Wii, while commercial ones were released for the long-discontinued Atari 2600 and Intellivision consoles in 2013 and 2016, respectively.