How much of a threat are mod chips to game publishers?

Quite a big one, according to U.K. newspaper The Independent. A lengthy article from today's edition deals primarily with a Nintendo DS mod chip known as the R4:

The R4 is a tiny Chinese-made device – costing around £14 – that for more than seven million owners of Nintendo's hand-held console, the DS, has blown wide open its capabilities. Combined with a small memory card and plugged into the back of the DS, it enables the console to play MP3s and videos, as well as store copies of games you already own.

 

Crucially, however, it also enables the user to play pirated games from the internet [which] can be downloaded for free. Add to this that it's simple to use, and available through retailers such as Amazon, and you can see why the R4 and devices similar to it are bringing video game console piracy to the mainstream.

Enabling a DS to play digital music and video is a wonderful thing. Obviously, playing pirated games is not.

In mentioning Amazon, the article is believed to be refering to Amazon UK. Mod chips are illegal in the United States under the terms of the Digital Millenium Copyright Act (DMCA). An English appeals court, however, held recently that the devices do not infringe on copyrights in and of themselves.

On the other side of the coin, British parent Nick Welsh explains why the R4 is attractive:

The trouble with kids is you pay £20 or £30 for a game, and they could only play it once. Let's say I sit down and download 10 new games, the way it ends up is they'll only really play one or two or those, and the others get replaced. I wouldn't be able to afford that number of games.

 

You can have 70 or 80 games on a 2GB card, and they're all on the back of the machine. There's no fiddling around with cartridges – it's all there to hand... If there was some sort of iTunes equivalent where it was relatively easy and you could try a game for a week for a quid, and pay another four quid to keep it, then I think it's likely I would use it.

In addition to publishers, some game retailers are concerned about the popularity of the R4, which they link to declining sales of DS game cartridges.

Is there a point in targeting an older game that, based on lukewarm reviews, probably wasn't a big seller even when it was new?

MTV Multiplayer reports that the Japanese Association of Psychiatric Hospitals is lobbying to have Nintendo DS title Dementium: The Ward removed from store shelves. The game is of the survival-horror genre and is played from a first-person aspect. From the MTV story:

...it seems that the organization was concerned that the game might “encourage discrimination and prejudice” against those with psychiatric disorders.

Gamecock Media Group distributes the game in Japan. CEO Mike Wilson told MTV:

Gamecock’s position is that this story, like many before it, boils down to a lack of understanding or appreciation (and therefore fear of) games outside our little sub-culture. I’m sure the people involved have only the best intentions.

 

The co-publisher/distributor for the game in Japan, Interchannel, will deal with the situation appropriately. In the meantime, we’re thrilled that this quick bout of paranoia has brought so much attention to our first lovechild with [developer] Renegade Kid… The game is groundbreaking on the platform and it deserves the attention and success it is seeing.

GP: Advocacy groups tend to be well-intentioned but are often ill-informed when it comes to games. In a similar vein, here in the U.S. the National Alliance on Mental Illness went after Manhunt 2 last year because the group felt that the game's asylum setting stereotyped psychiatric patients as violent.

As part of Scotland Yard's investigation into the stabbing death of a 20-year-old Nottingham man, police are probing the victim's connection with Nintendo's mildly-rated Advance Wars series.

The game, rated E-10 for players 10 and older by the ESRB, was a passion of Matthew Pyke, who was found dead on Friday evening. Pike apparently operated an Advance Wars fansite under the screen name "Shade."

U.K. newspaper the Telegraph describes detectives' interest in Pike's gaming connections:

Police said on Wednesday that they believe he may have known his attacker and are examining who he knew from playing internet-based games... Nottinghamshire Police said officers were investigating his links with other online gamers but stressed it was just one of a number of leads being pursued.

Later on in its report the Telegraph begins to give a fair account of Advance Wars...

Although it is a war game, it is not graphically violent and is more concerned with strategy than virtual killing. Players take turns to make moves and games can last for days. Gamers have praised it for its complexity, saying it can be “highly addictive”.

...and then proceeds to demonize the entire universe of online games:

Online games are frequently criticised for trivialising killing, but there is increasing concern that even non-violent games can harm young people by making them withdraw from the real world.

 

In a move that is sure to spark controversy, the upcoming Grand Theft Auto: Chinatown Wars for Nintendo's handheld DS will feature a drug-dealing mini-game.

Although many grownups use the DS, it is widely regarded as a kid-friendly system. Citing a print story in Edge magazine, CVG reports:

Here's some news that's surely going to send mainstream newspapers (and Nintendo's PR department) mental. It's emerged that for DS features a full-on drug-dealing mini-game.

Revealed in the latest Edge magazine, the drug-dealing feature lets you flog heroine, cocaine, weed, ecstasy, acid and downers. Selling the six type of drugs makes you a ton of in-game cash and help you gain experience of market conditions, says the mag.
 

Rockstar exec Dan Houser is also quoted:

We wanted to have a drug-dealing minigame in lots of the GTA games. We played with it a little in Vice City Stories, because it worked really well juxtaposed with the main story. It works well with what GTA is, with driving around the map, and it gives you another thing to think about - another layer or piece of the puzzle to keep you motivated. It does intersect with the main story, and things you learn from it work with the story, but it mostly runs on its own.

GP: In the video at left (sorry for the poor sound quality) Nintendo exec Cammie Dunaway announces GTA Chinatown Wars at this year's E3.

The ESA Foundation has announced that legendary Nintendo game designer Shigeru Miyamoto will be honored with the 2009 ESA Champion Award at the charitable organization's annual Nite to Unite for Kids on October 22nd in San Francisco.

ESA CEO Michael Gallagher lauded Miyamoto in a press release:

Miyamoto-san truly has defined video games as we know them today. With his remarkable creativity and passion for fun, family entertainment, Miyamoto-san and his team at Nintendo have produced many iconic games that appeal to audiences of all ages.

Past champions include George Lucas, as well as GameStop’s Dan DeMatteo, Electronic Arts’ Bing Gordon, Toys ‘R Us’ Michael Goldstein, Nintendo's Howard Lincoln, Sega's Isao Ogawa, Sony Computer Entertainment’s Ken Kutaragi, and Electronic Boutique’s Jeffery Griffiths.

Last month GamePolitics reported that Maryland-based Hillcrest Labs sued Nintendo for alleged patent law violations in regard to the Wii's motion-sensitive controller.

Hillcrest has now upped the ante.

As Reuters reports, the firm, which claims that patents for its motion-senstive remote control The Loop were infringed upon by the Wiimote, has also lodged a complaint with the U.S. International Trade Commission, a government agency.

The ITC's enforcement powers enable it to block foreign-made products which are judged to infringe upon patents of U.S. firms. A posting on the agency's website reports that it has indeed launched an investigation which will require responses from Nintendo of Japan and Nintendo of America. An explanation of the investigative timeline is posted on the ITC website:

By instituting this investigation... the ITC has not yet made any decision on the merits of the case. The ITC's Chief Administrative Law Judge will assign the case to one of the ITC's five administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.

 

The ITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the ITC will set a target date for completing the investigation. ITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

Citing a report by the Financial Times, Edge Online notes that, on average, each employee of Nintendo will earn $1.6 million in profit for Mario & Co. in 2008.

On a per-worker basis, that figure beats leading Wall Street investment house Goldman Sachs' record-breaking $1.24 million figure from 2007.

From EO:

Nintendo employs less than 3,000 permanent staff, each of whom takes home an average annual salary of $90,900 a year. Assuming the platform holder achieves its net profit target of 410 billion yen ($3.9bn) in 2008, each employee will generate the company $1.6 million in profit, according to the paper’s calculations...

 

The report says that Nintendo is able to make so much money with so few staff because it relies on outsourcing for all hardware manufacturing and even a number of its high-profile games.

For its part, Nintendo said the Financial Times may have underestimated the Wii manufacturer's profitability.

Nintendo cozied up to the 50-and-older crowd last week at the AARP's Life at 50+ Expo in Washington, D.C.

Not unexpectedly, titles like Brain Age and Wii Bowling were on display.

Madworld trailer? Not so much...

Are Nico Bellic and Liberty City coming to the Wii?

Take-Two CEO Ben Feder (left) wouldn't say yes and wouldn't say no during yesterday's conference call to discuss T2's third quarter financial results. As reported by MCVUK, here are Feder's comments:

With respect to GTA Chinatown I will tell you that we’ve spent an enormous amount of time and effort working with Nintendo and developing that partnership. We’re very proud of the partnership that we have to date.

 

We continue to build that relationship. We think we have significant value to add to that partnership and that’s not a one-way relationship in any way. GTA Chinatown Wars is not even the first step but certainly an important step in continuing to develop that relationship.

 

So without commenting on whether GTA specifically whether it is coming to the Wii or not, I will say that Nintendo and Take-Two work very well together. Nintendo and Rockstar are beginning to work well together and we intend to continue to grow that relationship.

GTA Chinatown, of course, is the DS title revealed by Nintendo at E3. No release date has been specified.

Any decision to move GTA to the Wii would likely be based on technology as opposed to residual queasiness over Nintendo's "family friendly" image. After all, the Wii has already been graced with Manhunt 2. The controversial Madworld is in the pipeline.

From a tech perspective, it would seem quite the challenged to get, say, GTA IV on the Wii, given the system's limited storage capacity. So perhaps if the GTA franchise does make it to the Wii, it will be a system-specific title.

Full transcript of T2 conference call graciously provided by Seeking Alpha.

A report released this week by the Archives of Pediatrics & Adolescent Medicine maintains that kids burn calories four times as fast when engaged in an active video game than a passive one.

According to Medical News Today:

...over 83% of children in the US between the ages of 8 and 18 have video game consoles in their bedrooms. The alarming increase in obesity rates that coincides with this trend may not be a coincidence, as seated video games may contribute to time spent sedentary rather than active. 

While you might expect that the authors looked at the Nintendo Wii or perhaps multi-platform aerobic games like Dance Dance Revolution, the report focuses on the XaviX gaming system (see video), manufactured by Japan's SSD Company, Ltd. Among the XaviX's offering are simulations of bowling, fishing, tennis, and golf. The study authors comment:

In addition to the exercise gaming modalities, the XaviX system includes a gaming mat (XaviX J-Mat) that allows participants to travel the streets of Hong Kong at a walk or a run, avoiding obstacles and stamping out ninjas.

The study was performed at the University of Hong Kong's Institute of Human Performance. Kids who played games while seated burned 39% more calories per minute than when they were at rest. During an active bowling game they burned 98% more calories and during an action/running game they burned 451% more. Of this, the researchers said:

This translates into a more than four-fold increase in energy expenditure for the XaviX J-Mat game. Preventing weight gain requires an energy adjustment of approximately 150 kilocalories [calories] per day. The four-fold increase in energy expenditure when playing on the XaviX J-Mat would fill the proposed energy gap, if this game were played for 35 minutes a day...

 

Our data demonstrate that the two active gaming formats result in meaningful increases in energy expenditure compared with the seated screen environment. The next step is to test whether active gaming interventions can provide sustainable increases in childhood physical activity.

 

Famed Nintendo designer Shigeru Miyamoto (#73) and Activision Blizzard Chairman Bobby Kotick (#72) are the only two video game luminaries to make the Vanity Fair 100, writes Newsweek's N'Gai Croal:

[Miyamoto & Kotick's] respective rankings...sandwiched between architect William McDonough and the aforementioned cybergossip Matt Drudge--are a full 40 spots below where [former CEO Larry] Probst and Electronic Arts placed just a few years ago. (For what it's worth, EA CEO John Riccitiello did not make the list, which may provide more incentive to close that deal with Take-Two.)

 

And this despite the videogame industry tracking to record revenues for the year. We're not sure what the solution is--it's difficult to picture Vanity Fair's silver-haired editor Graydon Carter raiding in WoW, rocking out with Guitar Hero or working out to Wii Fit--but videogame's top talents can't outrank on-their-last-legs performers like Robert De Niro (#59) and Mick Jagger (#61), something's rotten at [deal-making restaurant] Michael's.
 

GP: On the other hand, Sony's Howard Stringer (#39) and Bono (#36), who owns a piece of Pandemic (Mercenaries 2) are also on the list. True, games may not be their primary focus, but still...

At #2 is Rupert Murdoch who owns the game-hatin' Fox News.

We've missed Perrin Kaplan ever since she left Nintendo last year.

But she's back, apparently, and made a bit of a splash at the just-completed PAX by remarking that:

Parents who use video games as a babysitter shouldn't have sex to begin with.

Perrin's comments came during a panel session on sex and violence in games. Her new company, Zebra Partners will ramp up later this year when her non-compete agreement expires with Nintendo.

Via: Spong

Nintendo once again finds itself the target of a patent infringement case.

As Cnet reports, Maryland-based Hillcrest Labs alleges that the Wii Remote infringes on Hillcrest's patents for a motion-sensitive remote control device known as The Loop. A Hillcrest press release says in part:

While Hillcrest Labs has a great deal of respect for Nintendo and the Wii, Hillcrest Labs believes that Nintendo is in clear violation of its patents and has taken this action to protect its intellectual property rights.

GamesLaw has court documents available.

The United States Attorney's Office has announed that a Florida man who dealt in pirated video games has been sentenced to 15 months in prison and fined $415,000.

According to a press release, Kifah Maswadi, 24, of Oakland, Florida had pleaded guilty in June to selling Power Player handheld units which were pre-loaded with more than 75 titles, mostly owned by Nintendo and Nintendo licensees. According to the feds, Maswadi earned more than $390,000 peddling the handhelds.

From the press release:

In addition to the 15 month prison term and restitution order, Maswadi was ordered to serve three years of supervised release and to perform 50 hours of community service, which includes educating the public on the perils of criminal copyright infringement.

That's what the press release says. But GamePolitics has probed court records and has many more details on the case:

According to Maswadi's indictment, he charged $23.99 for wired versions and $47.99 for wireless units. Both types connect to televisions.

The case began in 2006 when an FBI agent, acting undercover, placed an order with Maswadi for 100 Power Play units at an agreed-upon wholesale price of $10 each. The agent told Maswadi that he planned to sell them at a mall in Manassas, Virginia during the holiday shopping season. The agent eventually purchased 80 more units from Maswadi. In April, 2007, agents raided Maswadi's facilities in Florida. According to the indictment, he admitted to both selling the units and knowing that they infringed on game copyrights.

Court documents indicate that Nintendo reps found 18 unspecified first-party titles on the Power Play units as well as 58 unspecified titles owned by Nintendo licensees. More than 8,500 units were sold by Maswadi. The ESA, which represents game publishers, estimated that the retail value of the Power Play units at $50 each (although the indictment states that Maswadi sold them for $23.99 or $47.99). While admitting his guilt, Maswadi disputed the government's valuation of the loss caused to game publishers. His sentence was below the typical minimum range for the crimes charged.

A Wikipedia entry on the Power Player describes the system and lists a number of the games included (which appear to be old NES titles). The WikiScanner utility indicates that the ESA edited the "legal issues" section of the Wikipedia entry in April, 2007.

What’s black and white and read all over?

A newspaper, but if veteran games industry marketer Bruce Everiss has anything to say about it, that should not include the UK’s Daily Mail:

They really are just trying to sell newspapers with sensationalism because nobody with a brain can be stupid enough to believe what they have written.

Everiss took umbrage with an article concerning Madworld, Sega’s upcoming bloody brawler that’s being developed exclusively for the Wii. The Daily Mail suggested that the game would tarnish the Wii’s family-friendly image and quoted a UK watchdog group that is calling for a BBFC ban on the as-yet unreleased title.

For his part, Everiss offered a point-by-point counter to the Mail’s claims. 

• If a Wii is family friendly then presumably a DVD player is. And you can play totally execrably disgusting content on a DVD player.
• Game content is mild compared to film and book content. MadWorld just pales into insignificance compared to what is on these other media.
• Games are age rated with the excellent PEGI system. Every parent can clearly see this on the front of the packaging...
• There is plenty of equally violent content already available for the Wii. The Mail are just exposing their total ignorance with this...

-Reporting from San Diego, GamePolitics correspondent Andrew Eisen...

The Daily Mail has published news of the first - but surely not the last - mainstream attack on Sega's upcoming Madworld for the Wii:

Players in the 'hack and slash' game, which is due for a UK release in early 2009, can impale enemies on road signs, rip out hearts and execute them with weapons including chainsaws and daggers.

 

The decision to release a violent game on a console which has based its reputation on family fun has shocked anti-violence pressure groups.
 

John Beyer, head of watchdog group Mediawatch-UK, called for a ban on Madworld:

This game sounds very unsavoury. I hope the British Board of Film Classification (BBFC) will view this with concern and decide it should not be granted a classification. Without that it cannot be marketed in Britain. What the rest of world does is up to them. We need to ensure that modern and civilized values take priority rather than killing and maiming people.

 

It seems a shame that the game's manufacturer have decided to exclusively release this game on the Wii. I believe it will spoil the family fun image of the Wii.

An unnamed Nintendo spokesperson told the Daily Mail:

Wii appeals to a wide range of audiences from children and teenagers to adult and senior citizens, anyone from 5 - 95, as such there is a wide range of content for all ages and tastes available. Mad World will be suitably age rated through the appropriate legal channels and thus only available to an audience above the age rating it is given. The game is not made by Nintendo but by Sega.

Famed game designer Shigeru Miyamoto has been barred from speaking about his outside interests, according to the Times Online.

If the story is to be taken at face value - and not as a Nintendo marketing stunt - the rationale is that Miyamoto's habit of converting his outside interests like puzzle solving, exercise and music into hit games is worth big money:

Having managed to lure millions to games with the inventiveness of characters such as Zelda and Mario, it became Mr Miyamoto's hobbies that shifted gears for Nintendo in the next-generation console era. And as Nintendo's Wii games console approaches its second year, even the most fleeting insight into how Mr Miyamoto is spending his work or play-time is creating huge interest.

 

In short, the gaming and investment communities are wondering which of his current pastimes will be translated into a virtual rendition that will attract millions of sales five years from now.

GP: It would be kind of amusing if it turned out that Shiggy's new hobby was something either unmarketably freaky or irretrievably boring.

Via: Destructoid

Unless they've been playing too much real-life beer pong, GamePolitics readers will likely recall the recent flap over the Wii-ware title formerly known as Beer Pong.

Released this week with an E rating, the renamed Pong Toss from JV Games sparked earlier protests from educators as well as a call from Connecticut Attorney General Richard Blumenthal (D) for the ESRB to re-rate the game as Adults Only.

Time has now bellied up to the bar to offer own examination of the Beer Pong controversy and finds that it was predictable given concerns over binge drinking:

Perhaps, in retrospect, JV Games should have seen this coming. After all, drinking games and video games may be two of college-kids' favorite pasttimes, but they are also a source of constant complaints from their middle-aged parents...

 

The controversy isn't entirely surprising. The point of beer pong is to get your friends drunk... Last fall, Georgetown University banned beer-pong... The University of Pennsylvania, Yale University, University of Massachusetts at Amherst and Tufts University have also banned drinking games.

 

The anti-pong activism strikes JV Games' [co-owner Jag] Jaegar as somewhat fruitless. As long as students "have access to alcohol, they will create drinking games out of any activity," he says. More to the point, if students have access to alcohol, they'll drink it — no games necessary.

Yesterday, GamePolitics reported on a small Florida manufacturer's claim that Wiimote, the common, yet unofficial nickname for Nintendo's motion-sensitive Wii controller, was negatively impacting sales of its Weemote, a small TV remote control designed to fit children's hands.

Fobis Technologies president John Stephen told Time:

These days, the little guy like us is wondering, What's the point of trademark protection?

We asked Nintendo for comment and received this from NOA spokesman Charlie Scibetta:

Because Nintendo does not use and does not plan to use the Weemote trademark, we declined Fobis' offer to purchase it.  We wish them success with their Weemote.
 

Stephen told GamePolitics that lawyers for his firm had contacted 100 retailers, large and small, requesting that they cease using the term Wiimote in their marketing. Indeed, GP correspondent Andrew Eisen, a major fan of the Wii, pointed out a post by importer NCSX:

Last week, we received a letter from a law firm representing a company which holds the "Weemote™" trademark. The letter stated that we were to stop using the term, "Wiimote" in our product descriptions and NCS Game Notes™ because our actions could possibly cause confusion in the marketplace. NCS respects trademarks and ©opyrights since we also own trademarks and copyrighted material so we're obliging even though we think it's a bit of a stretch... but whatever.

From this day forth, the word "Wiimote" has been banished from N©S' shopping sites and replaced with the word "Wii Remote™." We wasted spent about an hour on Friday making sure the term "Wiimote" was waxed from the NCS shopping experience.

Everyone who follows the video game scene knows that the Wiimote is the unofficial nickname for Nintendo's motion-sensitive Wii controller.

But have you ever heard of the Weemote?

As reported by Time, the Weemote (left) is a small TV remote control, specially designed for children by Fobis Technologies of Miami. The Weemote was trademarked in 2000, roughly six years before the launch of the Wii.

From the Time article:

Nintendo doesn't actually use the term Wiimote in its marketing, but then, it doesn't have to. The Internet takes care of that. Online retailers, from Amazon.com to used-video-game vendors operating out of their houses, advertise the "Wiimote" on their sites, openly or via more obscure means like customer product tags and posted comments.

 

As a result, says Fobis president John Stephen, since the Wii was released in 2006, the Weemote trademark has been so "diluted" that the Weemote's sales, which are mostly online and total fewer than half a million to date, have fallen considerably. In fact, many Wiimote fans believe it's the Weemote that's guilty of the trademark infringement. "These days," says Stephen, "the little guy like us is wondering, What's the point of trademark protection?"

What has been Nintendo's response? GamePolitics put the question to John Stephen, whose firm manufactures the Weemote:

GP: Is there any legal action pending against Nintendo, or planned?

Stephen: First of all, we are not currently engaged in a  legal action with Nintendo or any of their resellers.  Our lawyers have mailed approximately 100 letters to sellers of the Wii remote and related accessories who use the wiimote name to market or describe their products.  This list includes all the major big box retailers as well as most of the specialty retailers.  These requests for cease and desist are required of us by law.  If we do not police and enforce our trademark, it could actually be taken from us legally so this is our obligation.  This obligation is very costly financially as well as in our time.

GP: Have you had any talks with Nintendo about the issue?

Stephen: Our approach has always been to contact Nintendo on this through our attorneys to see about reaching a business settlement, i.e. they purchase our trademark and we set out to rebrand our company. Our argument is that the damage has been done here (whether intentional or not) and that Nintendo has more to gain now controlling this mark then we do. They asked us to give them an offer which we spent a few months pulling together and after submitting that initial offer, they promptly decided they were not interested anymore and basically closed the door.  Though the name weemote is very precious to Fobis Technologies, can you imagine CocaCola with out Coke, or VW without the Beetle or Federal Express with FedEX?

Unfortunately, the reality is we have no leverage and they are already getting a free ride. So I guess their position is why pay for something that is already free!

GP: How has this issue affected you and your business?

We have spent over a year trying to do this in a moral and ethical fashion by talking to them purely from a business standpoint, .i.e.  with no threats of any kind.  This process eats deeply into our profits and productivity. As a small business owner who has spent the last ten years of my life trying to do the right thing and being passionate about our products, this really unsettles me and makes me seriously question why any innovator in their right mind would want to go down this same road? 

When we started our company, we fully believed that our intellectual property would be protected given we did all the proper registrations and due diligence.  My wife and I are both entrepreneurs as were our parents.  How do we encourage the next generation if this is our legacy?

In my mind, Nintendo may not have done any of this intentionally but it seems one would expect them take some kind of moral high ground in the matter. The fact they have registered for the mark in the European Community, have a re-direct on the www.wiimote.ca domain name in Canada to Nintendo.ca,  in combination with freely using metatags on their own site would indicate to me a true slap in the face.

GP: We have a request in to Nintendo for comment.