Nintendo vs The Pirates

The DS is the most successful games machine of all time.
It has sold over 132 million units since its 2004 debut and has housed some of the most successful video games ever released.

But there’s a problem.

Since 2007, DS piracy cards – such as the infamous R4 – have plagued the handheld.

Software sales have fallen, developers and publishers have reduced their DS output and the console sales have slowed. Even big-name titles, such as Take-Two’s Grand Theft Auto: Chinatown Wars, have suffered.

Chinatown Wars is the highest-rated DS title, as well as the best-selling M-rated title by a long way,” Take-Two CEO Ben Feder told MCV earlier this year. At the same time, the handheld market is currently challenged by weak demand and by piracy. Piracy is a real and present danger for our industry and must be addressed, especially in the handheld market. The commercial performance of Chinatown Wars has certainly suffered at the hands of piracy.”

It’s not known exactly how many DS copier cards are on the market. However, the fact that Nintendo has seized half a million of these devices between January 2009 and July 31st 2010 shows the scale of the problem.

But Nintendo isn’t a company to be rolled-over by IP thieves. The platform holder recruited the best anti-piracy experts, liaised with the Governments of the world and took the biggest offenders to court. Nintendo fought back.

The half a million figure gives you an idea of the potential pirate market place,” says Nintendo’s anti-piracy counsel Neil Boyd.

And you can store more than just one game on these cards, they can hold lots of games. It’s a big problem.

The number of games being downloaded is increasing. But fortunately we are nowhere near the scale of music and movies.

We are faced with different arguments as to why people think this is legal and not legal. But we know it is causing the games industry substantial damage. The overwhelming majority of people who use this card are using them to download games.”

Over the past 18 months Nintendo has made significant in-roads. The company has persuaded retailers – including Amazon and eBay – to delist DS piracy cards. And it has won some cases against sellers. But the biggest turning point came last month when Nintendo took Playables Limited to a specialist UK IP court. And won.

Playables was a big player in DS piracy. Trading Standards and HMRC seized 165,000 of R4-style devices from the supplier. And the fact that an IP court upheld the judgement against the retailer has set a precedent. There’s no arguing against it. The R4 card and its siblings are now illegal in the UK.

And Nintendo hopes this will get the development community back on board in supporting the console.

To get this judgement from a UK specialist IP civil court is an important step in the right direction,” adds Boyd.

It is important to Nintendo but also for the developers. Hopefully it will give them the encouragement and confidence to continue to develop the best games for Nintendo platforms.

By being analysed by an IP court you get a very detailed assessment. The judges in these courts are more familiar with intellectual property cases. And this sort of decision will help guide Magistrates and criminal judges, who on a day-to-day basis deal with an array of different cases.”

The knock-on effect from this case is a lot greater than just taking down Playables. Already, two defendants in similar cases in the UK have pleaded guilty, whereas previously they may not have. And Boyd hopes that rest of Europe will follow UK’s lead.

This decision has persuasive value in Commonwealth jurisdictions, like Hong Kong and Australia,” he continues.

Where this case focused on the UK, the law it was based on has come from international conventions and European directives. And because this is how a UK judge has interpreted it, one could argue this should be persuasive in other parts of Europe, as well. If you are working from the same law, it should apply in a global or international level. The UK is also a well-regarded division of judges in intellectual property.”

But already Nintendo is enjoying success across Europe, as Boyd explains: We’ve had over 16 judgements in our favour in Germany recently. We’ve just won a case against 11 web shops in the Netherlands. There’s a civil case we’ve won in Italy. I do feel the tide is turning.”

However, with millions of these devices already in consumers’ hands, has this judgement arrived too late? As one commentator said on, ‘Isn’t this a case of shutting the barn door after the horse has bolted?’

I don’t think so, no,” says Boyd. Cases like this do take time to come before a judge. The popularity of the DS family continues. The consoles are still seeing fairly strong sales. Yes, there are people who already possess these devices and we don’t target individuals or potential customers. But the commercial pirates, those who were profiteering from our IP and third-party publishers’ content, we will continue to target those companies and those individuals. They are making easy money off the back of creative talent.”

But perhaps the console that will benefit most from the Playables judgement is Nintendo’s next handheld, the 3DS. The 3DS will adopt advanced anti-piracy measures, but should the unthinkable happen and the console is cracked, Nintendo will be on solid legal grounds to challenge the pirates from the beginning.

Only time will tell if or how the 3DS will be hacked,” says Boyd.

In terms of security, and preventing people from getting around those security measures, I think this case gives us a good, solid legal foundation. What comes ahead of us is pure speculation, but it gives us a good basis for future security threats,” the counsel continues.

Indeed, pirates are no longer able to use the defence that these devices are used to play homebrew games, which has helped protect these suppliers over the past two years.

Boyd explains: You might well download homebrew software. But you still have to circumvent the security on the machine and on the card to play it.

At Nintendo we have WiiWare and DSiWare to encourage the garage developers to distribute at a low cost, the similar type of software.”

So what’s next for Nintendo’s anti-piracy unit? How can the firm further protect itself, publishers and developers from IP thieves?

Like all the anti-piracy specialists you are not going to change the behaviour of a hardened downloader,” Boyd concludes.

If someone has been used to paying nothing for content for the last ten years, it is very difficult to turn them round. But the majority of people aren’t doing that. So we have to make those focused on buying legitimate products.

We will be leveraging this decision against sellers of copier cards and we have already seen tens of sites come down.

These cards are made so cheaply in China and they are imported into Europe. People are attracted to making money, and compared to other offences where people trafficking more serious substances, this sort of criminality is an attractive business proposition for some people. So we will press ahead and try and take down as many of these sellers as possible.”

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