BLOG - NINTENDO'S DONKEY BUSINESS

You may or may not have heard that Nintendo has gone on another aggressive lawsuit path, deciding to sue the creators of Palworld for Patent infringement. This gave me the idea for the perfect snippet from my book, SAVE OUR PROGRESS [Coming out oh the 30th of September] to share with you all.

Nintendo may be very litigious nowadays, but did you know that their history in the United States started with a lawsuit that may have killed them in the crib, and with them the Videogame Industry?

3.1.1 The Monkey Who Made an Ass of Universal

In the previous chapter, a videogame based on a movie gave the coup de grâce to the North American videogame industry. The infamous E.T. the Extra-Terrestrial.

Despite this game being the hemlock for ATARI and the ecosystem they had created, the film remains a classic of cinema and one of the most beloved films in Steven Spielberg's starry catalog to this day. It is still the third highest-grossing film in the North American market from Universal Pictures[1], surpassed only in the last eight years by two other flicks: one is Jurassic World, a soft reboot[2] of the Jurassic Park series inaugurated by the spectacular 1993 blockbuster, also by Spielberg, which now sits in first place.

In second place we find an animated film from 2023 by Illumination[3], an animation studio and division of Universal, based on the intellectual property of a third-party company: it is the Super Mario Bros animated movie.

This detail is impressive not only for the box-office success, especially when compared to the disastrous live-action flick of 1993[4], but even more so because the first ever contact between the then small Nintendo and movie giant Universal was extremely conflictual.

During to the Golden Age, the success of Taito's Space Invaders proved to Japanese developers that the sensibilities of the American public were, although different, not inscrutable. There was a thriving market and the possibility of entering it and one interested company was Nintendo, which, after almost a century of making Hanafuda cards[5], had also turned to making electronic toys and games. Some of their cabinets had been quite successful in Japan, but they hadn’t managed to build a following in the United States.

After the umpteenth failure, the then president of the company Hiroshi Yamauchi, – particularly since it was a cabinet that the man himself personally thought would break through, called Radarscope[6] – decided to focus on something new, developed by a fresh arrival at the company: a young graduate in industrial design named Shigeru Miyamoto, who had been with Nintendo only since 1977. Although his ambition and specialization up to that point had consisted of making children's games and graphics for the bodies of some cabinets, when Yamauchi asked Miyamoto if he could make a videogame, Miyamoto did not hesitate in accepting.

His design process was, for its time, innovative. Instead of approaching it from a gameplay design perspective in which he had no experience, Miyamoto instead focused on writing a narrative first, which would then influence the design of the software. His story centered around a gorilla who, having escaped the clutches of his carpenter master, kidnaps the man's girlfriend and takes refuge at the top of a construction site. The player would control the carpenter in his attempt to rescue the damselled lady, scaling scaffolding and dodging barrels. Icing on the cake was the naming: thinking specifically about making it a success in the United States, Yamauchi asked for the game to have an English-language name.

Miyamoto consequently combined the word 'donkey' for stubborn with the word 'kong' to refer to the gorilla itself: the cabinet was thus christened Donkey Kong[7].

The game was very successful, but the subject of this segment is legal disputes so we want to focus instead on some details of the narrative created by Miyamoto, as they are the same ones on which lawyers and executives in force at Universal Pictures focused according to sources: a gorilla who kidnaps a woman and takes refuge in a very high place. For those of you who thought of King Kong it's to be expected, and so it most certainly was for Universal and their owner MCA[8]. The great ape and its movies belonged to their catalog, and they had licensed the production of handheld videogames based on the IP to a US company called Tiger Electronic Toys[9]. In a routine maintenance process regarding this license in 1982, a deal between Nintendo and Coleco to produce console versions of Donkey Kong ended up on their radar. Although the two vice-presidents of Universal/MCA in charge of marketing and licensing activities did not find grounds for litigation of any kind once the Donkey Kong game was tested, when the news reached the ears of Sid Sheinberg, the president of the conglomerate, and Robert Hadl, vice president in charge of legislative affairs, they apparently begged to differ. In their opinion, the story of the Japanese ape was far too similar to that of his American cousin.

After an initial broadside against license holders like Coleco, who had partnered with Nintendo to make a Donkey Kong port[10], Universal then threw itself at Nintendo itself. Their demands, sent on April the 28th, were extreme: they claimed to be the sole owners of the rights to anything with 'Kong' in its name and similarly inspired properties , up to and including the production of toys and videogames; they ordered the destruction of all inventory produced up to that point, and threatened to take both Coleco and Nintendo to court if they did not agree to these terms within forty-eight hours. Greenberg of Coleco agreed to the terms, and bilaterally tried to push Nintendo to do the same.

Minoru Arakawa[11], Yamauchi's son-in-law and head of the company's U.S. operations, would have none of it. Milder and friendlier than his father-in-law, he ignored his recommendations in favor of those of his legal counsel Howard Lincoln[12]. Arakawa tended to surround himself with talented people which he could trust, and his trust in Lincoln was well rewarded. According to sources on May 6th, 1983, Universal tried to repeat their luncheon ambush on Coleco with Nintendo but ended up with completely opposite results: Nintendo was not prepared to pay anything because they had, in their eyes, done anything wrong and had accepted the meeting only to say so to Universal’s face.[13]

The American studio’s reaction was explosive, and they vowed to make an example of Nintendo. In addition to the ongoing litigation with the Japanese company, the Hollywoodians threw around their weight and threatened further lawsuits against any company that entered into any licensing agreement with Nintendo[14]. Lincoln and Arakawa prepared for their day in court by going to Japan, meeting Yamauchi and Miyamoto. The proceedings then lasted seven days, held in a court in the state of New York. A Nintendo employee demonstrated Donkey Kong's workings and gameplay in the courtroom.

In the end, the litigation was a disaster for Universal: the judge exposed them to possible retaliatory lawsuits for damages not only from Nintendo, but all the companies they had threatened.

The most amazing thing about this trial, though, is that Lincoln's pride and stubbornness came not from arrogance but facts. During that first meeting on May the 6th, Robert Hadl had stated that a history of ownership transfers for King Kong would be sent to Nintendo. Put simply, it is a document that tracks the various owners of a given object, and per sources the promised copy of this document never reached Nintendo. Lincoln made an explicit request to receive it. No answer[15].

The trial revealed the paradoxical reason why: Universal's own legal department had proved in 1975 that no one owned the rights to King Kong, in the middle of a similar dispute with RKO[16] and Dino de Laurentis[17]. Nonetheless Universal kept up similarly outrageous behavior when convenient, like with Nintendo in 1983, counting on the fact that no one would want to confront a legal department which Scheinberg proudly moniked a "profit center." In this case, though, it became a source of loss which cost Universal $1.8 million, which was paid to Nintendo in 1985[18].

Intricate and interesting, with twists and turns straight out of Law & Order[19] with a dash of David and Goliath, this story is interesting to us for other reasons. Not only because the existence of the Super Mario Bros. Movie demonstrates the tendency of corporations to forget all slights if there is business to be done, but knowing Nintendo's corporate history in the following decades and their tendency to invoke legal litigation[20], it is not difficult to imagine how this affair may have taught them as much as the Crash did about the importance of control over every aspect of production and instilled in them the ambition of wanting to control the sphere of fruition as well.

As much as we can see in retrospect what excesses and mistakes this may have led the company to over time, in the second half of the 80s it was exactly the shot in the arm a doomed industry needed.

[1] Founded in 1912, Universal Pictures is the longest-running film production studio in U.S. history, and the fifth-oldest studio in the world. See https://www.the-numbers.com/box-office-records/domestic/all-movies/theatrical-distributors/universal.

[2] A flick halfway between a remake and a sequel, where the previous stories and characters are referenced, but the narrative focuses on the new ones.

[3] Founded in 2007, the animation studio debuted with the first Despicable Me in 2010.

[4] The first feature film ever based on a videogame IP, the film was a colossal box office bomb and performed even worse with critics. See Chidichimo, Anthony. "The Messy True Story Behind 1993's 'Super Mario Bros.' Movie." Collider.com. [2023, Apr 7]

[5] Traditional Japanese playing cards. Hanafuda cards prominently feature images of flowers from which they take their name: 'hana' for flowers, 'fuda' for cards.

[6] Released in Japan in 1979, it was a Shooter in the style of Space Invaders. Kent, Steven L., pp 156

[7] Kent, Steven L., pp 158

[8] Music Corporation of America, a now-extinct media conglomerate legally succeeded by Vivendi Universal, which in turn was succeeded by NBCUniversal.

[9] The company's president, Rissman, paradoxically came up with the idea of licensing King Kong from Universal after trying out Donkey Kong during a trip to Japan. See Kent, Steven L., pp. 210.

[10] Kent, Steven L., pp 212

[11] The first and longest-serving president of Nintendo of America, Arakawa held the position from its inception in 1978 until 2002.

[12] Lincoln remained an outsider to the company until 1983. He was then hired as Vice-President-in-Chief, in the midst of the Universal crisis.

[13] Kent, Steven L., pp 214

[14] The only company that didn't capitulate was Milton Bradley, all the others terminated their licensing agreements. See Kent, Steven L., pp 215

[15] Kent, Steven L., pp 214

[16] Creators of the original film from 1933, at the time more than forty years old.

[17] An Italian, native of Torre Annunziata, he has produced and co-produced more than 500 films, among which Three Days of the Condor, The Silence of the Lambs, Conan the Barbarian, Evil Dead II and III.

[18] Kent, Steven L., pp 218

[19] Franchise created by Dick Wolf. It follows the stories of teams of policemen and prosecutors.

[20] Plunkett, Luke. "Nintendo's Big Piracy Case Is A Very Sad Story". Kotaku.com. [2022, Jun 6]