Opened on the same weekend as A Nightmare on Elm Street (1984) and briefly out-grossed it by around $161,800 as this film was playing in more than twice as many theaters as "Nightmare." By the second weekend, sales dropped by about 45%.
The release of this film was picketed by angry parents who were not happy to see Santa Claus depicted as an ax murderer, despite the fact that Tales from the Crypt (1972) had done the exact same thing 12 years earlier, and Christmas Evil (1980) had done the exact same thing 4 years earlier. As a result, box office receipts plummeted once the film was pulled from theaters after barely two weeks. The film was then shelved for another year before it was released on VHS uncut (which has since gone out of print).
This film was known as "Slayride" throughout its production. Tri-Star decided to change the title to "Silent Night, Deadly Night" at the last minute.
In an interview from the documentary Going to Pieces: The Rise and Fall of the Slasher Film (2006), Lilyan Chauvin (Mother Superior) admitted it was a mistake to center the film's publicity campaign on Santa Claus and believed it would have generated far less controversy if the studio instead focused on Billy's psychological plight. Also, in a story by People Magazine from November 1984, Robert Brian Wilson (Billy age 18) said he felt so ashamed by the controversy that he told his friends and family to avoid seeing the film. Years later, after attending a 30th anniversary screening and meeting with fans, he reversed his stance. Wilson has since made appearances at horror conventions and given interviews about his work on the film.
The group formed to protest the film and lobby for it to be removed from theaters was called "Citizens Against Movie Madness."