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Despite significant concerns over piracy, Nintendo Co. Ltd. is set to enter the Chinese game market in late 2003. Earlier this year, Nintendo President, Satoru Iwata, told the Japanese business newspaper Nihon Keizai Shimbun, "We want to sell hardware and software products in China within a year or two. Due to piracy problems, we are studying several marketing methods, such as selling machines several generations old, rather than the latest models."

However, as Sony furthers plans to release PlayStation 2 in China later this year, reports suggest that Nintendo's own business plans for the country extend well beyond the introduction of a last-generation console. Instead, Nintendo will likely launch GameCube in China later this year alongside PlayStation 2. With sales of GameCube lagging to PlayStation 2 worldwide, Nintendo may seek to defend the market, first and foremost by preventing Sony from gaining a first-mover advantage.

Anti-piracy efforts have shown promise over the last decade in China as threats of trade sanctions and, more recently, the country's induction into the World Trade Organization have provided the needed incentives for the Chinese government to take action. In its first year of WTO membership, China took a number of steps on the legislative level to meet its intellectual-property protection commitments to the WTO. However, reports indicate that enforcement of these intellectual-property laws remains ineffective as China has yet to allocate the necessary resources to aggressively enforce protections.

In 2002, worldwide piracy cost Nintendo an estimated $649 million in lost revenue. During the year, Nintendo managed to seize more than one million counterfeit Nintendo products worldwide. "Nintendo has never been more aggressive in protecting our unique global brand and our key intellectual properties and China can expect the largest share of our attention again in 2003," commented Jodi Daugherty, Director of Anti-Piracy, Nintendo of America.

February 26, 2003

Rick - Editor in Chief, GameCubicle


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