The player can rotate the module and burn fuel to fire a thruster, attempting to gently land on marked areas.

Engine co-designer Wendi Allen (credited as Howard Delman) proposed using it to create a Lunar Lander game, a genre which dates to 1969.

The game is displayed using black and white vector graphics and depicts a side-on view of the terrain and the landing module.

At the top of the screen, the player is given information on the module's speed, altitude, and fuel, along with the score and time spent in the game.

If the module crashes—which happens if it is moving too fast, or rotated too far from vertical when it touches the ground, or landed on a not-flat area—then a small number of points is awarded.

[1] The game features four levels of difficulty which adjust the landing areas and module controls.

[5] Unlike other arcade games, Lunar Lander does not feature a time limit; instead, the game starts with a set amount of fuel and inserting additional coins purchases more fuel, allowing indefinite gameplay.

The initial hardware design work was done by Cyan Engineering, Atari's research and development subsidiary.

[10] Once it built an initial hardware concept, the project was passed on to Atari employee Wendi Allen,[11][12] (née Howard Delman) who enhanced the prototype engine into one that could be used by game designers.

One point of contention in the development process was the difficulty of the game; Allen initially wanted the module to move as realistically as possible, but they determined that the result was almost impossible to play.

[10] Allen chose the large handle used to control the thruster: Atari initially planned to use a standard joystick, but he wanted a control with more physicality, including adding a rubber pad at the bottom to give players the impression that they could pull harder for a little more thrust.

Allen has stated that chief among these was retaining a crater where the player's previous spaceships had crashed; it was cut as the new hardware could not draw enough lines fast enough to handle the detail.

[10] Over a year after development started, Lunar Lander was released in August 1979, just after the tenth anniversary of the first human Moon landing, though Atari did not link this connection in its marketing of the game.

[1][2] Atari developed a two-player version of the game, but only two prototypes were ever made and it did not enter production.