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Copyright 2004 by Northwestern University School of Law Northwestern Journal of Technology and Intellectual Property

Volume 2, Number 2 (Spring 2004)

¶1

For the past several years the music industry has waged a controversial and unyielding battle against what it calls “pirates.”1 Will the video game industry follow suit, or will it chart a new direction for intellectual property management in information goods?

¶2

A decade ago, video game emulators epitomized the cutting edge of programming technology. Ten years hence, they are the subject of a heated debate over copyrights and the video game industry’s future.2 Emulators, which provide conversion software that enables games to run on personal computers (“PC’s”) and other systems or platforms for which they were not originally designed, have become a staple among gaming enthusiasts. Several factors have contributed to the robust market for emulation: the continued growth of the internet, the emergence of peer-to-peer (“P2P”) file sharing technology, and the major console manufacturers’ persistent inattention to latent market demand for access to older games. Ignoring pent-up demand will drive the unsatisfied customer to alternative sources; in this case, peer-to-peer networks where emulation software is available for free. Today, game enthusiasts can download 298 Nintendo 64 (“N64”) games along with an emulator in less than one hour, an act that results in a potential US$10,920 loss per customer to the gaming industry.3 Sony’s litigation against emulator makers Connectix and Bleem! in 2000 signals that the gaming industry now recognizes that emulation threatens its business model, which is predicated on: planned obsolescence; a singular, controlled user experience on the console manufacturer’s hardware; and a profit model dependent on margins from software sales.

4

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* James Conley is a Clinical Professor of Technology at the Center for Research in Technology and Innovation, Kellogg School of Management, Northwestern University, Evanston, IL. Ed Andros is a 2003 Kellogg MMM Program graduate, currently serving as a value chain manager at Arvin Meritor. Priti Chinai is a 2003 Kellogg graduate working at Google. Elise Lipkowitz is a current Ph.D student at Northwestern University. David Perez is a 2003 graduate of the Kellogg School of Management and an entrepreneur. ** *** **** *****

http://www.salon.com/tech/feature/1999/06/04/emulators/print.html (last visited July 4, 2004).

3 This figure was calculated by tallying the number of N64 emulated games available on file-sharing services multiplied by the average retail price of $39 per game.

4

Sony Computer Entm’t v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000) (holding development and

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1

Charles C. Mann,

wired.com/wired/archive/11.02/dirge.html. Howard Wen, 2

WIRED, Feb. 2003, at 92,

, SALON, June 1999,

I. INTRODUCTION

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