Some great responses on this thread (and a very minimal amount of unhelpful ones, surprisingly enough).
As a fellow teen back when this was released, though, I can clear up a couple of issues that pop up repeatedly on this thread throughout the years:
(1) COMPETITION: Not an issue. Ticket prices were WAAAAAAY lower then than they are now, and it was common for moviegoers to see EVERY summer blockbuster, even when they opened too close to one another.
Lines around the block were common back then, for every theater on every Thursday, Friday and Saturday night.
Now, back in the same town, the last packed house I attended was "Endgame" on opening night.
(2) RACISM/REVERSE-RACISM: Also not an issue. "Political correctness" was barely a blip on the radar (and really only exploded into the national zeitgeist in 1987 with Allan Bloom's "The Closing of the American Mind").
(3) MARKETING: The real culprit.
The only racism this movie suffered from was the racism of the studio execs who couldn't accept a non-white hero (Dennis Dun) and a bumbling white protagonist (Kurt Russell). Whether they, themselves, were racist is less important than the fact that they ASSUMED the movie-going public WOULD be racist.
That's why "whitewashing" was and still is a thing.
Studio execs are notorious for this. As I mentioned in this thread years ago, "21" featured a mostly-white cast whose real-life counterparts were exclusively Asian-American.
And ... most importantly, I can confirm from experience that there was almost zero marketing for this film.
Actually, I'd only read about it much earlier in a Fangoria magazine, and knew to expect it. But I never saw any commercials, trailers, or pretty much ANYTHING other than the poster on the theater when it actually opened.
Some posters have very aptly compared this film in tone and appeal to "Ghostbusters." Aside from featuring SNL alumni with proven box-office draw, THAT film had a TON of marketing, starting with an early viral campaign months before release consisting of Ghostbusters logo posters (just the logo, no words) popping up all over Manhattan and L.A.
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