Landrum worked for Arcadia/Starpath from March 1981 to November 1983, creating games like Communist Mutants From Space and a port of Frogger as well as completing the code for Suicide Mission. Dragonstomper was developed under the name Excalibur. Landrum stated that the game took several months to develop and chose to make it a role-playing game, as he felt nobody had yet made a "real" fantasy role-playing game on the Atari 2600. Like all the Supercharger games made by the company, they were developed on Apple II computers. By 1982, the Atari 2600 use of music was primarily functional in nature and was mostly for intros to games and in-game events. Dragonstomper features music such as "Rule, Britannia" when completing the game, "Taps" when the player dies, and "The Gold Diggers' Song (We're in the Money)" when gold is found.
Contemporary reviews of the game praised the game's sophistication for a console game, comparing it to the quality of home computer games of the period. The Electronic Games 1983 Software Encyclopedia praised the games graphics and sound as "excellent" and its gameplay as "outstanding", noting that "clever design makes it possible to enter all necessary commands through the joystick" and that the game's on-screen menu cut memorization of instructions "to a blessed minimum". The same review was published in the 1984 version but lowering the score to a seven. "B.H." of Games stated that the game was "the most sophisticated adventure game we've seen from any home video system" and that, along with Escape from the Mindmaster, it raised the Atari 2600 to "virtually the level of a home computer".
Other reviews focused on its quality and hailed it as among the best games using the Supercharger, while a few disliked the slower pace and graphics. Mike Meyers of the video game magazine Blip declared that although the game was difficult to master, he ultimately declared Dragonstomper to be best of the supercharger games and "probably the best "swords and sorcery" game yet produced for a home video game system." An anonymous author in Computer and Video Games also proclaimed it the best of the current Supercharger games in July 1983 and that the game "should be enough to keep even the most skilled adventurer occupied for a very long time". In the UK publication TV Gamer noted that text in the game made it "one of the most striking things about it" and that with Dragonstomper the "supercharger definitely comes into its own". One reviewer in Videogaming and Computer Gaming Illustrated declared it superior to Intellivision's Advanced Dungeons & Dragons and properly captured the spirit of Dungeons & Dragons while noting that the complexity and slow pace may be off-putting to some gamers. A second reviewer declared that "no one on this planet can be more bored with this video game than I was", finding it annoying to let the game choose the player's fate, noting they had preferred the fantasy-themed game Adventure (1980). Both reviewers negatively commented on the game's graphics. Dan Persons wrote in Video Games stated that graphics and sound in Dragonstomper were merely "ordinary" but that it "happens to be one of the best adventure games released for the 2600". Persons complimented the controls, finding that the system was well laid out for navigating the menus and almost as good as using a keyboard. He concluded his review stating that "the booby traps in the dragon's cave are sprung with such a suddenness that I literally jumped from my seat. A nicely wicked touch."
Later reviews continued to praise the game, again comparing its quality to home computer titles of the era and the variety of gameplay. Joe Santulli and Liz Santulli of the Digital Press declared it "one of the greatest games ever for the 2600" and that it "really shows off the Atari 2600's potential", respectively. Chris Cavanaugh, writing for the online database AllGame, gave the game a five-star rating (out of five) opining that Dragonstomper was a "woefully overlooked" and "surprisingly deep and ambitious RPG" and that the "wonder of Dragonstomper lies in the magnitude and variety of its environments, which provide a depth of gameplay usually reserved for home computer titles of this genre".
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