When we think of successful video game companies, our minds immediately think of Activision, EA, and we used to think of Atari. If we dig a little under the surface of actual games and look at their past, we see that they got their start in the early days of the industry. It’s hard to imagine that some of those same publishers had to use backhanded methods to get their games on the market. Back in the late eighties and early nineties, two companies tried to circumvent licensing fees by reverse engineering the lockout systems employed by Nintendo in its Nintendo Entertainment System and Sega with its Genesis.
Electronic Artists or Electronic Thieves
A few months ago there was an article I read (I think it was in Wired) that detailed the creation and rise of the John Madden Football video game. However, the creation of the Madden series wasn’t the most interesting part of the piece, it was about how EA worked around Sega’s licensing fees and saved millions of dollars in the process.
In the early 90’s Sega charged $8 to $10 for every cartridge produced on the Sega Genesis. For example, NBA Jam sold 1.93 million copies so Midway would have had to pay at least $15.4 million in licensing fees alone. EA didn’t want to pay the fee so they had a team of mad scientists reverse engineer the console to avoid paying those fees. After they were successful, they took their results to Sega and said “How about we pay you $2 a cartridge with a cap of $2 millon?” Sega quickly agreed to the compromise because they saw the potential for losing a lot of money if they didn’t agree to EA’s wishes. If Sega didn’t agree, EA could have sold the knowledge to other developers and Sega would have ceased being a console maker a lot sooner. Obviously, John Madden Football was a huge success and EA saved over $35 millon because of the new deal they struck with Sega. If you ever wondered why EA games had the little yellow tab in the upper corner and were a bit longer than other Genesis games, it was due to the reverse engineering.
WTF is a Tengen?
Some of you have probably heard of Tengen before. They released great games like RBI Baseball, Pac-Man, and Gauntlet on the Nintendo Entertainment System. They were also a part of Atari Games, which I will get to in a moment. Atari, Inc. had made its name as a leading producer of arcade and console games. After the great video game crash of 1983, Atari, Inc. was in trouble and split into two divisions: Atari Corporation and Atari Games which were two separate entities. According to Wikipedia:
“Atari Corporation was responsible for computer and console games and hardware and owned the rights to the Atari brand for these domains. Atari Games was formed from Atari’s arcade division, and were able to use the Atari name on arcade releases but not on console or computer games.”
When the NES came on the scene in 1985, Atari Games wanted to create and release games for the product. However, in the agreement they had with Atari Corporation, they couldn’t use the “Atari” name on console or computer games. This is when they came up with Tengen. It was derived from the same Japanese game where Atari got its name: Go.
Like EA did with the Genesis, Tengen disagreed with Nintendo’s licensing structure at the time. Nintendo’s policy stated that one publisher couldn’t release more than 5 games in a year and that their game had to be a Nintendo exclusive for 2 years. Developers found different ways around the policy: Konami used the subsidiary label Ultra to release more games while Acclaim used its LJN label. Tengen, however, came up with a different solution. After finally agreeing to Nintendo’s licensing structure, they released three games: Pac-Man, RBI Baseball and Gauntlet. In secret, they had developed a way to bypass Nintendo’s lockout code: reverse engineering.
Unlike EA, Tengen was unsuccessful, but they did have another trick up their sleeve. They took their argument to the United States Copyright Office. Tengen’s lawyers lied and said they needed a copy of Nintendo’s lock out system for an upcoming lawsuit they were about to file. After receiving the program, Tengen had finally found a way to engineer around the chip and immediately started releasing games. Instead of the usual square gray cartridge we all have come to know and love, Tengen released ones that were black and more rounded. When these hit the market, Nintendo immediately sued and they finally reached a settlement out of court.
My Parents Bought It, I Swear
Tengen has always interested me as a company because I owned two of their unlicensed games. I don’t know where my parents bought them and when I asked them, they obviously couldn’t remember. I had three games other than Super Mario Bros./Duck Hunt when I first got the system on Christmas Day 1989. The three I had were Joust, Pac-Man and Gauntlet, with the latter two both being Tengen releases. Back then, I never questioned why they looked different, nor did I know anything about them. I was just happy to play them both. Until I read that article on EA, I hadn’t thought about Tengen in years…but talking about old multiplayer games in this week’s podcast and thinking about all my old games sparked a nerve and I wanted to go revisit all the games I can remember playing when I first got into playing video games.
Yesterday’s Reverse Engineering is Today’s Piracy
I can’t imagine this happening today. In the litigious society we live, in lawsuits would be popping up left and right if any company tried to reverse engineer a console. The thing console makers have to look out for today is piracy and the copying of games. With technology a lot cheaper today, it’s easier for the home user to take matters into his own hands. Sony has been in the news lately for constantly updating their firmware to try and deter hackers. This is what today’s console makers have to deal with now – not some upstart company looking to save some money, but dedicated homebrew hackers attacking their system. Granted, the licensing structures are probably a lot different than they were back in the day, but with game development already a very expensive process, teams are looking at the downloadable market to reap in more profits.
Most companies don’t have a cap on how many games they can release in a year. I’m sure Activision and EA publish more than 30 games a year. Yet, after looking at all the crap that is on the market, maybe they should go back to that method. I understand that it would be impossible because the most successful games allow the crappy games to be published. EA took a huge loss when they cancelled NBA Elite on the eve of its release and it was a major title. Why do we continue to see crap-ware released on all different platforms when ultimately it just hurts the publisher’s overall brand to do so?