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February 4, 1999

EMULATOR WARS: SONY & NINTENDO CALL IN THE LAWYERS

By CBR Staff Writer

An emulator is a piece of software that permits users to run software written for one platform on a different machine. Harmless enough, you’d think; but emulators have landed two organizations in legal hot water just in the last week. At issue is the exploding market for computer games played on dedicated consoles, a market almost entirely owned by games giants, Sony and Nintendo.

By Rachel Chalmers

The first shots were fired by Sony Computer Entertainment America. Sony is facing down Connectix Corp, a San Mateo, California-based provider of software utilities to Apple’s Macintosh platform. Flagship Connectix products include Ram Doubler, Speed Doubler and Virtual PC, which permits Windows applications to run on a Mac. Buoyed by the success of Virtual PC, Connectix announced at MacWorld Expo that it would launch a Virtual Game Station to allow software for Sony’s PlayStation to run on a Macintosh G3. Sony slapped a lawsuit on Connectix, but Connectix went ahead and released Virtual Game Station anyway (see separate story). Roy McDonald, president and CEO of Connectix, believes that Sony’s suit rests on unsteady premises. The thing to sue for is infringement of intellectual property, he explained, and the emulator does not contain any Sony intellectual property. Sony’s real beef, however, is that Virtual Game Station may circumvent anti-piracy protection built into the PlayStation to protect its licensed software developers. There is a lot of piracy in the PlayStation business. It’s bad for the market as a whole, McDonald concedes, but we have put protection to prevent people from playing illegal copies. Sony may not believe it, but it’s true.

Follow the money

As if to rub salt in everyone else’s wounds, Sony announced on Wednesday that it enjoyed record-breaking holiday season sales for the third year in a row. Sony sold four million PlayStation games consoles in November and December 1998 – 961,000 of those in the Christmas week alone. There is now a PlayStation in one in every six American homes. Piracy or no piracy, the PlayStation business is buoyant. Word on the street is that Sony and Nintendo sell the consoles at or close to cost, and make their money on software sales. Given that the entire market is estimated at around $6bn, that dependence on software would be enough to make anyone jumpy about intellectual property theft. As McDonald puts it: What’s likely is that they have a higher profit margin on software than on hardware and a very high margin on royalty stream from third party software. If McDonald is right, the Connectix emulator shouldn’t damage Sony’s business at all, since it actually increases the potential market for licit – and hence profitable – games. If what McDonald says is wrong, and Sony does make some significant amount of money off its hardware, it’s understandable that the company would act to prevent Mac users from getting a free ride.

Blood, sweat and tears

Which is it to be? Weirdly enough, Sony won’t say. I’m not going to break out revenues, says spokesperson Molly Smith curtly, I get a zillion of these calls and it’s very clear that this company [Connectix] is out there claiming that we do this that’s bad and we do that that’s bad, when it’s clear that they don’t know anything about our company or its fundamentals, so who are they to be saying these things? Smith won’t be drawn on whether or not the Connectix emulator has adequate anti-privacy mechanisms. As far as she is concerned, it does not, and the suit is fundamentally about the right of software developers to profit from their work. What technically we’re doing is combating something that’s illegal and this is a very serious area for the whole industry, she said. If you talk to a developer that’s spent two years of their life making a game, having illegal pirated software out there is very detrimental to the people doing the blood, sweat and tears of making a product.

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Nintendo burned in turn

As if emotions weren’t already running hi

gh enough, the same day Sony announced its suit, a web site called Emulators Unlimited (https://www.emuunlim.com) unveiled the Ultra High Level Emulator (UltraHLE). This is not the first attempt at emulating Sony rival Nintendo’s hardware platform, but even Nintendo executives admit that it’s the best so far. It has some problems but generally speaking, it’s really quite impressive, says software engineering manager Jim Merrick. What makes UltraHLE even more controversial than Virtual Game Station is that it relies on illegally copied ROMs. Unlike Sony’s PlayStation which uses CDs, Nintendo’s games console uses cartridges. A Macintosh running Virtual Game Station can run a legal CD, but a PC running UltraHLE can’t accept a cartridge. Players have to copy the software onto a Zip or other high-density drive. Some people do this for personal use, but it’s too close to piracy for Nintendo’s liking.

Acrimony and general lowlife

Emulator developers argue that there are legitimate reasons to want to copy games and emulate them on other platforms – to maintain classic arcade games that are no longer commercially supported, for example, or to expand the boundaries of what it technically feasible. But even the writers of UltraHLE say they have been burned by the acrimony of the last week. RealityMan, one of the authors of UltraHLE, told Emulators Unlimited: ‘Outsiders see the whole scene as full of software pirates and general lowlife. To this I feel partly responsible, and apologize to all the dedicated emulation fans… I never have and never will condone or take part in any form of software piracy. Nintendo is still making up its mind whether to sue RealityMan and his collaborators. There are signs, however, that even the lawyers won’t drive the emulation industry underground. Late on Thursday afternoon, a San Francisco Federal District Court judge rejected Sony’s request for a temporary restraining order on shipments of Connectix’s Virtual Game Station. And though UltraHLE is no longer available for download, Emulators Unlimited has a new Nintendo emulator up called Nemu64 which it claims is even faster.

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