Do I remember it? Vaguely.
My family owned an Atari 2600 back then, but I wasn’t into video games at the time. I remember playing Fireworld, because of the falling knives mini-game. It was really… weird… Didn’t know there was a video game contest associated to it though. Game seemed rather pointless. Now I know why.
As for the sword thing. I’ve read that Jack Tramiel had a gold sword in his house before: I distinctly recalling reading about it, in an economist magazine that talked about him. Again, didn’t know it was associated to a contest or Atari ¬ñ thought it was something he made because he was rich. I’ll see if I can probe around Google and find the issue.
There have been lots of video contests through the decades. With prizes totaling $150,000 or more? Absolutely. There have been contests offering prizes of cars and trips around the world. Anything involving jewel studded golden artifacts? Naw. Not like that.