SAN FRANCISCO -- American Video Entertainment Inc. Tuesday sued video game giant Nintendo Co. Ltd. in a $105 million antitrust suit charging Nintendo used monopolistic power to lock American out of the lucrative video game market.
American Video, the San Jose, Calif.-based subsidiary of Macronix Inc., said Nintendo has used its 80 percent control of the home video entertainment market to block competitors from marketing Nintendo- compatible cartridges.
The suit accuses Nintendo of a conspiracy dating back to the early 1980s to restrain trade and monopolize the manufacture and distribution of consoles and cartridges used in video games.
Nintendo called the claims 'baseless' and vowed to vigorously defend against the lawsuit.
The case is similar to a 1988 antitrust suit brought by the Atari company challenging Nintendo's limits on licensing of Atari-developed games for the Nintendo system. That dispute remains in federal court. It may be resolved by late 1991 or 1992, according to a Nintendo spokesman.
The latest lawsuit charged Nintendo and its U.S. subsidiary, Nintendo of America Inc. of Redmond, Wash., created and began quietly shipping a lockout system specifically designed so American Video's new products would no longer be compatible in the 28 million Nintendo game machines used in U.S. homes.
Former San Francisco Mayor Joseph L. Alioto, an expert in antitrust law, filed suit on behalf of American Video.
The antitrust battle centers over the wildly popular video games that have swept the nation in recent years.
Different games, such as Nintendo's popular Super Mario Brothers series, are contained on computerized video game cartridges and displayed through a television screen by insertion into a game console. Nintendo dominates 80 percent of the American market in the games with 28 million of the consoles installed in America, according to the lawsuit.
Nintendo had $2.7 billion in U.S. sales in 1989, according to Richard Lindner, company spokesman.
The game maker has projected $4.1 billion in sales for the current year, Lindner said.
Alioto contends Nintendo began secretly shipping its modified lockout system specifically to make American Video's games useless in Nintendo consoles.
'Nintendo refrained from publicizing its redesign but privately urged its major customers to refuse to deal with plaintiff because its cartridges no longer would operate with the NES game machines,' the suit states.
Howard Lincoln, Nintendo senior vice president said he would have no comment on the details of the lawsuit because the firm has not seen a copy.
He did say, 'Based on the news reports we have heard we do feel the charges are baseless and Nintendo will vigorously defend itself.'
American Video planned initial entry into the business as a Nintendo compatible cartridge publisher in the third quarter of 1991, according to the lawsuit.
It planned to produce a hand-held color unit to compete with Nintendo's black and white unit.
American Video produces five Nintendo-compatible games, Tiles of Fate, Double Strike, Pyramid, Krazy Kreatures, F-15 City War and PUzzle.
The suit contends American is likely to suffer $35 million in actual damages.
Under terms of antitrust law American is allowed to seek triple damages and is claiming $105 million, as a result.
