Nintendo Pays Innovation Tax To Patent Holder

from the good-for-innovation? dept

A year ago, we noted that Hillcrest Labs was going after Nintendo, claiming that the Wii violated its patents. And, like so many other patent holders, Hillcrest got to take two separate cracks at Nintendo, suing in court and also filing with the ITC to block imports. Recognizing just how ridiculously costly it is to defend both the lawsuit and the ITC process, it looks like Nintendo has just agreed to pay up. The company still insists that the Wii doesn't infringe, but the system is stacked against companies who actually innovate. It's so costly to defend yourself, that it's usually just cheaper to settle. Consider it a tax on innovation... except the tax doesn't even go to anything useful.

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Nintendo Wii Doesn't Infringe On DVD Playing/Parental Control Patent

from the good-news dept

It's nice to see a patent lawsuit go in the right direction. A judge in LA has tossed out a patent infringement lawsuit against Nintendo concerning parental controls on DVD players. The only problem? The Wii doesn't play DVDs. Of course, Nintendo still faces a number of other patent infringement lawsuits, but at least this one was dealt with relatively quickly.

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Nintendo Boss: Used Video Games Aren't Good For Consumers

from the oh-really? dept

The folks over at GamePolitics are highlighting the most ridiculous part of a VentureBeat interview of Reggie Fils-Aime, the president of Nintendo of America:

VB: Used games are coming up as a big issue again. Why?

RFA: More and more retailers are experimenting with the used game model. We don't believe used games are in the best interest of the consumer. We have products that consumers want to hold onto. They want to play all of the levels of a Zelda game and unlock all of the levels. A game like Personal Trainer Cooking has a long life. We believe used games aren't in the consumer's best interest.

VB: Because?

RFA: Describe another form of entertainment that has a vibrant used goods market. Used books have never taken off. You don't see businesses selling used music CDs or used DVDs. Why? The consumer likes having a brand-new experience and reliving it over and over again. If you create the right type of experience, that also happens in video games.

First off, it's rather stunning to claim that a vibrant used market isn't in the best interest of consumers. As studies have shown repeatedly, healthy second-hand markets actually help both consumers and original producers because it adds more value to the product. That's rather obvious once you think about it. If someone knows they can resell the product at a decent price later, then it both lowers the risk and increases the value of the original product. On top of that, the used market also helps better differentiate on pricing, again benefiting both customers and producers.

Second, it's quite odd to claim that there's no used book, used CD or used DVD market. A few years back we noted that the used book market had become a multibillion dollar industry, and you just need to look on, say, Amazon or eBay to see thriving sales of used books, CDs and DVDs. To claim that there's no such market either shows ignorance of the market or is an outright lie -- neither of which is a good thing.

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Two And A Half Years Later, Wii Shortages Start To Let Up

from the still-no-wii-fit dept

The shortages that accompanied the launch of the Nintendo Wii weren't too surprising, since they seem to be par for the course for any new game console these days. What was a little surprising was just how long the shortages lasted after the Wii's late 2006 introduction. If you still haven't had a chance to find a Wii in-stock, your wait should soon be over, as an exec from the retailer GameStop says they "finally have enough inventory on the shelf" (via Engadget), and the shortage of Wiis should be letting up. Clearly the Wii has been a huge hit, but it would seem that Nintendo could have gotten a handle on its production output in less than, eh, two and a half years. There's also speculation that the weakness of the dollar was leading Nintendo to send Wiis to places like Europe with stronger currencies (and hence more profits when Nintendo converts foreign currencies back into yen). Or did Nintendo just leverage the scarcity so it would contribute to the Wii's appeal?

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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The Wii Might Not Be Much Exercise, But Suing Nintendo For Self-Promotion Is

from the and-1-and-2-and-file-and-sue dept

The Nintendo Wii has been the subject of class-action lawsuits before, but this could be a new low: some guy now claims he's preparing another one for the company to deal with, because he alleges Nintendo misrepresents the Wii as a fitness tool when it actually contributes to obesity. He equates Nintendo to tobacco companies misrepresenting the safety of their products, but as Engadget points out, he's not just some do-gooder concerned about the health of America, he's also somebody who makes his living from it, and apparently has a fitness radio show that's about to launch. Somehow it's hard to imagine this suit will get anywhere; but we also imagine it was never really meant to anyway.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Don't Say You Weren't Warned About How Dangerous The Wii Can Be

from the domestic-tranquility dept

When the Nintendo Wii first came out, there were lots of stories talking about how it was causing users physical pain, and it was blamed for an increasing number of ER visits. Further proof that the Wii can be harmful to your health comes out of Austin, Texas, where a guy has been accused of trying to choke his girlfriend with a Wiimote strap -- after she woke him up and accused him of eating all of her Girl Scout cookies. Nintendo's already been sued once for making the Wiimote's wrist strap too weak; we won't hang around to see if another lawyer alleges they've now made it too strong.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Nintendo Making Peripherals Impossible To Buy Used

from the sneaky,-sneaky,-sneaky dept

An anonymous reader points us to some news concerning the latest skirmish in the battle over used goods in the video game industry. As we've noted, various execs have been freaking out over secondhand sales, despite tons of economic evidence that a robust secondhand market increases the value of the original offerings. In this case, it appears that Nintendo is selling a "Wii Speak" microphone that can be used with certain games, but in order to use it, you need to download the "Wii Speak Channel" which can only be downloaded with a code supplied with the Wii Speak (Update: as noted in the comments, this description isn't quite accurate. You can still use the Wii Speak in the game, but the Wii Channel is needed to use it outside of the game). And here's the sneaky part: that code can only be used once. Effectively, it's impossible to resell the Wii Speak, because you can't use it unless it's been purchased new. This is pretty dumb, as it certainly decreases the value of the device, and will make plenty of folks think twice before committing to it, knowing that it can't be resold.

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How To Do Advertising On YouTube: Make It Awesome

from the content-equals-advertising dept

In the past, as we've talked about how advertising is content and content is advertising, we've pointed out that many folks who worry about "advertising" on YouTube are missing out on the fact that the YouTube videos are advertising themselves. But, of course, with millions and millions of videos on YouTube, it helps to do something special. Our own Tim Lee sent over this example of a YouTube video about a Nintendo Wii game that's worth watching in its entirety, just to see what happens. Can't say much more about it, other than that you should watch the whole thing. It acts as fantastic content and fantastic advertising in a single shot -- without "overlays" or "prerolls" or anything like that. It's yet another example of how a YouTube video fits in when people recognizes that content is advertising... and advertising is content.

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And Of Course: Nintendo Sued For Patent Infringement Over Wii Devices

from the only-a-matter-of-time dept

These days it's almost guaranteed: if you do something innovative in the tech world, bringing a new type of product to market successfully, get ready for that lawsuit. If anything, it's almost surprising that this lawsuit wasn't filed earlier, but research firm HillCrest Labs has sued Nintendo for patent infringement over its Wii controller. And, of course, HillCrest gets two cracks at it, since the company is using the popular loophole to both file a lawsuit in court and ask the International Trade Commission (ITC) for an injunction against Nintendo.

At this point, plenty of companies are recognizing that it's just too expensive to actually innovate. If you do something well, you're only going to get sued by someone else who hasn't been able to innovate as well as you. While we can point to the various examples of companies getting sued, it's also worth thinking about all the companies who don't even bother to innovate, recognizing it's just not worth the expense of these lawsuits. The patent system is functioning in exactly the opposite manner from its constitutional purpose. It's not promoting the progress, it's hindering it by making sure that "progress" has a toll booth attached to it.

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Nintendo Freaks Out That People Can Use Memory Card To Pirate Games

from the give-them-a-reason-to-buy dept

You would think by now that companies might start to realize that they're never going to put a damper on any kind of piracy by lawsuit -- but that they need to actually give people a reason to buy. Apparently that message has not yet gotten through to the suits at Nintendo, who are looking into lawsuits to make it difficult to buy products that let you use unauthorized versions of DS handheld console games. There's a device called the R4 Revolution, that can be used by DS owners to store all their games on a single memory card, so they don't have to carry around all those cartridges. That's a big advantage and a huge value.

Of course, it also lets owners play unauthorized games. And, that, has Nintendo execs freaked out and suing.

But considering the very real legitimate use of the device, it's hard to see what's "illegal" about the device itself. In trying to stop the sale of the device, of course, Nintendo is also providing a lot more attention for the device and the fact that it can be used for unauthorized games as well. You would think that a device that made the actual DS console more valuable would be something that Nintendo execs would get excited about rather than trying to sue it out of existence.

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Nintendo Loses Patent Suit In East Texas, Of Course

from the prior-art,-anyone? dept

The latest in a long line of patent lawsuits in every patent hoarders favorite district of East Texas involves the game controllers used by Nintendo. A company holds a patent on a 3D controller and sued Nintendo (and Microsoft) for supposedly violating the patent. Not surprisingly, the jury found in favor of the patent holder. Juries quite often side with the patent holder, no matter how questionable the patent may be. In this case, there would seem to be a ton of prior art raising validity questions. The patent itself was filed in November of 2000, at which point there were already numerous game controllers that seem to meet most of the criteria outlined in the claims. Whatever minor differences there may have been between what was on the market and what's in the claims should be seen as an obvious iteration of game controllers. As for Microsoft's involvement, it paid up to settle last month, once again showing how it's often cheaper to just pay up rather than to fight questionable patents. And, that, of course, is why we will keep seeing more and more questionable patents being filed. It's just so lucrative.

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The Wii Is Popular, But Wii Users Aren't Buying Many Games

from the wii-sports-is-plenty dept

The traditional economics of the video game console market are fairly well known. You sell the console itself at either cut rate margins or even at a loss, and then make it up in selling very expensive games for the console. That's worked in the past for the various version of the Sony Playstation and the Microsoft Xbox. But, apparently things are a bit different with the Nintendo Wii. While the Wii has been a huge success, opening up a tremendous new market of console buyers and users thanks to its unique input mechanism and gameplay, it turns out that Wii owners are buying noticeably fewer games than owners of competing consoles. In fact, it appears that many Wii owners haven't bought any games and are satisfied with the Wii Sports package that comes with the Wii. At this point, I should admit that I'm in this group as well, though part of the reason is simply not knowing which types of games are likely to work well with the Wii controller. As such, it's not worth spending a huge amount to find a game that's simply disappointing. The article suggests, also, that since Wii buyers tend to be very different than other console buyers, the marketing and advertising strategy for Wii games is all wrong. The real question, though, is whether or not this is really a long term problem. The Wii itself (unlike the PS3 and the Xbox) is sold at a profit, according to most assumptions. So, while selling more games is important, it's not as important as with the other consoles.

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Latest Pointless Patent Claims: Who Invented The Wii Controller?

from the you-need-to-own-a-patent-to-enforce-it dept

One of the problems we have in the various discussions about patent and copyright law is that people falsely assume that both systems are designed to give "credit" to the original creator and to somehow enforce "fairness" in making sure that original creator receives recognition. That has never been the case. Both are designed to create monopolies, to provide incentives to create. That has nothing to do with credit -- and, that's especially clear in patent situations where the actual people named on the patent are rarely parties to a case, as it's more often owned by a firm (such as the company the person worked for). Most companies require that their employees assign any patents to the company. So it seems fairly ridiculous to find out that a guy who doesn't actually own the patents he received is pissed off at Nintendo for using his idea in their Wii controllers. The guy worked for Midway Games, a popular videogame maker, who now owns the patents in question. It's difficult to see what his complaint is, since the patents are no longer his and Midway does not appear to have any problem with what Nintendo has done. In the video itself, a patent attorney suggests that the Wii seems to go well beyond the patents in question and it seems unlikely that Nintendo is infringing -- but since the few second demo looks similar, it makes for a nice news cast claiming someone "stole" an idea.

The likely situation is probably a lot less interesting. Lots of folks have been working on motion sensing videogame controllers for quite some time. This wasn't a new concept that sprung up overnight. There are also many different ways to create such a tool and just because the end results look similar, don't mean that a patent was infringed. However, an even bigger point is one that we've been trying to drive home for a while. The invention part is only one small part of the equation. Innovating and actually bringing the product to market is more important -- and that's what Nintendo did successfully. This guy worked for a gaming company and came up with a prototype six years ago and didn't do anything with it. While lots of folks were trying to come up with motion sensing gaming devices, Nintendo successfully brought one to market.

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Nintendo's Own Study Show Wii Not So Great As Exercise

from the honest-results! dept

There's been a little buzz around the news of a new study in the UK pointing out that playing games on the Nintendo Wii really isn't a particularly good substitute for real exercise, as some Wii-players would like to believe (and I'll admit that I'm guilty of playing some Wii boxing in lieu of real exercise). However, what may be even more interesting is the fact that the study was actually paid for by Nintendo. Perhaps we've just become so cynical about corporate "studies" like this in the past, that it's relatively shocking to find one paid for by a company that shows the opposite of what the company probably hoped to see -- and then to still see that study actually published somewhere.

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Nintendo Moves Into The Educational Market

from the whatever-happened-to-burgertime? dept

While Sony and Microsoft duke it out with price cuts on the Playstation 3 and the Xbox 360, Nintendo keeps chugging along in the background, with the Wii continuing to sell well despite still being hard to find at many retailers. A big part of the success of the Wii, and Nintendo overall, has been the company's focus on creating products and games that appeal to a wide audience, and don't rely on sheer processing and graphics power, but rather innovative and creative game play. This is the sort of strategy that EA's new CEO recently alluded to, when he said his company has become stagnant and caught in an endless loop of franchise title updates, and isn't doing enough to court casual gamers and other non-traditional market segments. Even more so than the Wii, Nintendo's DS portable console reflects its strength in this area. It started with things like Brain Age, which attracted an older demographic by blurring the line between learning and gaming, but now the DS is becoming a platform for reference materials and educational programs in Japanese schools. The DS is an attractive device for the schools because it's relatively inexpensive (compared to laptops), and it's easy to use, while its touchscreen and voice-recognition functionality provide a useful platform. Nintendo trumpets the fact that 60% of DS buyers don't consider themselves videogamers -- and it's by catering to this market that Nintendo is finding a lot of success, rather than by rolling out expensive, yet powerful, consoles that focus on complex, involved games.

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