Monsters Inky, Pinky, Blinky and Clyde chase Pac-Man through the neon-blue maze. He dodges them, munching a few pink energizer pills along his way, and then resumes the chase. At one point, Pac-Man manages to gobble one of his pursuers, and the hunt goes on.
Pac-Man is the phenomenally successful video game of pursuit and capture, with the yellow, pie-faced Pac-Man electronically gobbling monsters or the monsters attacking him.
Now the maker of the arcade-style Pac-Man, Midway Manufacturing Co. of Chicago, says it is involved in a more serious game: Elusive Asian competitors, Midway says, are gobbling its profits and threatening its reputation by importing phony, lesser quality Pac-Man and other coin-operated arcade video games into the country.
As Midway describes it, in this game of espionage and counterfeiting it is the pursuer, chasing down scores of small Japanese and Taiwanese firms that with cheap labor, expert copying techniques and clever maneuvers circumvent U.S. Customs officials and illegally ship fake games into the United States.
Pac-Man was invented by Namco Ltd., a Japanese company that sold U.S. rights to Midway to manufacture arcade games and to Atari Inc. for the home version.
Some of the copies of its games are so accurate, Midway claims, that they include its trademark insignia, and the company says one of the few ways it can tell who made them is by the quality of the "joy handle" used to manuever Pac-Man. Other copies may go by the names "Puckman," "Packman," "Gobbler," "Puc-Man" and "Pac-Pac," Midway says.
"The problem is there are so many people in Taiwan and Japan who are able to inexpensively bring Pac-Man games into the country," said Paul Plaia, attorney for Midway. "It's a big problem in the industry."
Game manufacturers also claim there are domestic pirates. Midway, along with Stern Electronics Inc., and Atari, recently won federal appeals court cases upholding their copyrights of their games and were awarded injunctions against the offending firms. Pirating of the cartridge games, such as those made by Atari, doesn't appear to be as widespread as with the arcade games, however, a Wall Street analyst says.
The biggest problems appear to be with the Japanese and Taiwanese firms that allegedly are illegally gaining as much as a 30 percent market share for some games in the $1.2 billion electronic arcade game market. Plaia said imposters openly advertise their phony Pac-Man games in electronic video game magazines and sell them at international trade shows.
Until a few months ago, the counterfeiters shipped assembled games through U.S. ports, Midway says, but now they ship in the computer game boards to be assembled into cabinetry here. After training by Midway experts, U.S. Customs officials can now spot the phony game boards, Plaia said.
But now that Ms. Pac-Man, the feminine and supposedly more challenging version, has hit the pinball palaces, Midway is unsure how imposters will strike. The pirates may ship in blank boards and the electronic circuitry separately for assembly in the United States, Plaia fears.
Midway also claims its Galaxian, Rally-X, Space Zap and Space Invaders video games have been pirated. "There were probably more Space Invaders sold in this country that were fake than were legal," Plaia said.
The whole issue probably will be decided this summer when the International Trade Commission, which has temporarily excluded foreign Pac-Man games while it looks into the copyright question, decides whether to make the ban permanent. Midway last year filed with the ITC an unfair competition complaint claiming copyright and trademark infringement that allegedly has injured the industry. Last month the commission cited 18 alleged counterfeiters in its temporary order.
However, nearly 40 other foreign manufacturers of alleged imitations were named in Midway's complaint and never responded. Plaia said each time he visits one of the nation's major ports, new counterfeiters turn up. They may change trading companies with which they do business or change their identities, he said. Neither government officials nor Plaia could estimate how many fake games have been sold.
It's not hard to understand why the electronic video market would be attractive to pirates; a company can earn millions of dollars in a matter of months. Plaia wouldn't say how much Midway has made from the games; but according to documents in a lawsuit brought by Stern Electronics Inc., against an American company that copied its "Scramble" video game, about 10,000 of the games worth $20 million in sales were sold during its first two months on the market.
Arcade game companies, led by Bally--Midway's parent--Warner Communications and Stern, sold about 600,000 games last year at an average price of about $2,000 each, said Richard Simon, an analyst with Goldman, Sachs & Co. That provided total profits for the approximately 30 companies in the business of as much as $300 million, Simon said.
Bally, the $700 million-a-year coin-operated games manufacturer, spent $3.2 million on Pac-Man research and development in 1980. About half of Midway's 1,600 employes work on Pac-Man, according to documents filed with the ITC.
Many small companies in Japan and Taiwan, using cheap labor, can copy 2,000 to 5,000 popular games "in a very short period of time," an ITC investigator's report said. When the Japanese market becomes saturated the excess is shipped to the United States. Already, the Japanese are tiring of Pac-Man, the report said, and experts predicted the excess will be illegally shipped here.
"I don't know what the next move will be" by the pirates, Plaia said. "They use ingenuity and imagination. It's a war."