Orson Welles told it was a radio novel, he didn't had that thing of making it a prank as you say mit5005. He was an excellent actor and his deeeep voice made the perfect setting for the radio.
Yes, many ppl thought it was real because in that time radio was the most used way of communication, TV existed in limited numbers. Maybe some of us would believe an alien invasion if a famous TV network announced it, had live coverage and everything.
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