It was real and it made it into the arcades. There was one at arcade I used to frequent as a kid. They wanted something like $5 for 3 minutes of play which was outrageous back in the 80's. So I didn't play it.
A couple of years back, a friend ran into the old owner of the arcade and he still has it and it is still working. Apparently it uses an Atari 2600 on a UPS for the game part and the movement was just wired into the joystick.