In 1982, "E.T. the Extra-Terrestrial" was an unparalleled success: it was the highest grossing film of all time at $792 million, and it had 8 Oscar nominations. And yes, within days, the team began writing a sequel, but it was going to be a very different movie from the beloved original.
"E.T." writers Steven Spielberg and Melissa Mathison wrote a 9-page treatment (basically, a summary) of what the second film would entail. The treatment, now widely available online, set a very different tone from the first film.
Elliot and his friends, now on summer break from school, are left hoping that E.T. will someday return to Earth. Aliens do return, but they're a different kind: albino versions of the same species as E.T. who have been at war with E.T.'s civilization for years.
The new aliens are carnivorous and capable of paralyzing wildlife with a single hum - and they invade a defenseless Earth. Eventually, Elliot and his friends are kidnapped by the evil alien species, which sets in motion the adventure of the would-be sequel. In other words, it's much darker and less family friendly. It's no wonder the movie wasn't made.
Spielberg, in a recent interview with the American Film Institute, commented on the "E.T" sequel: "Sequels can be very dangerous because they compromise your truth as an artist. I think a sequel to E.T. would do nothing but rob the original of its virginity. People only remember the latest episode, while the pilot tarnishes." The general public has Spielberg to thank for his restraint, a rare quality in Hollywood, especially in a world of remakes, sequels, prequels, and reboots.