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Litigate Litigate Litigate

Im this blog I briefly discussing why the early console wars were embroiled in litigations.

Litigate, Litigate, Litigate

 

From the onset the console wars were defined by countless litigations. This process of ‘I sue you –you sue me’ mentality hindered the development of games and the hardware those games played on. Some companies would be able to excel under this internal conflict, others would fail, but all of the consumers were hurt by this childlike determination to destroy one another.

 

            So Chris, why did these litigations happen and what was the underlying goal? These litigations happened for one reason, money. They were not to give better games, as Nintendo wants to claim. They were not about playing fair, as Nintendo’s competitors would want everyone to believe either. These litigations allowed companies to gain control over the market or prevent others from fairly entering the market. This gave the controlling companies the ability to generate more revenue without competition or allowed competing companies to use hardware they had not gotten license to.

 

From Nintendo’s standpoint, the more market share they were able to control the more consoles and games they would be able to sell. This is a perfect example of a company trying to monopolize a market, which for the most part is a standard theory of business, get as many customers as possible buying only your product. Not hard to understand that. What baffles me is how they started out by controlling every aspect of the hardware to prevent companies from building on their system. They claim that these hardware restrictions were put in place to prevent bad games from being made outside of their control. The problem with this is the licensing agreement they made with developers gave Nintendo the only manufacturing rights. Not only were they profiting from the licensing program but also being the only manufacturing structure for their games they making profits off the manufacturing of the game cartridges. In hindsight they may as well have stuck a big sign on their head that said, reverse engineer us or pay us twice.

 

From the competitions standpoint, the litigations were to give them a ‘fair’ chance of entering the market. Atari Games was a good example of how this wasn’t the case at all. During their attempts to obtain licensing they intentionally were reverse engineering the Nintendo game console. From the very onset of their interaction with Nintendo, they intended to break their agreement and distribute unlicensed cartridges. This shows that they had not intention of following the agreement and invited Nintendo to litigate them.

 

Even granting that Nintendo’s license program was unfair to developers doesn’t give the developers the right to intentionally perform illegal acts. They were just as capable of using the agreement like very other company but chose to act like children and take all the money for themselves. This ‘I want it all or I’ll sue you’ mentality became the standard for many companies and still can be seen in the oligopolies of consoles and PC games today.

 

Kent, S. (2001). The ultimate history of video games. New York, New York: Three Rivers Press.

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