NORFOLK -- Robert C. Fay's goal is to be certain that every time a kid drops a quarter in a video game machine, he gets to play the real thing.
The former FBI agent now works for the Arlington-based American Amusement Machine Association, a group of video game manufacturers and distributors that is pursuing criminal charges of trademark and copyright infringement against video game counterfeiters. He says the job has taken him to Japan, Korea and Canada in an attempt to shut off what was once a $40 million a year business.
"Listen, slapping these guys with a civil suit won't stop it," Fay said. "They consider the cost of the suits a cost of doing business.
"Now we have an enforcement system that coordinates the efforts of the Royal Canadian Mounted Police, the FBI and Customs," he said in a phone interview from Houston, where he was negotiating with a vendor he suspected of using counterfeit games. "We've gotten 15 indictments and 14 convictions nationwide. Losses to the industry are now probably between $6 million and $15 million."
According to government and industry officials, computer boards that power the games are counterfeited in Korea and shipped to Canada. From there, the components are packaged in a conversion kit that can change an old game into a newer, more popular one. Those kits are then sold to vendors in the United States. While legitimate games sell for between $1,200 and $2,500, the counterfeits sell for about half as much, Fay said.
In papers filed in Norfolk federal court this year, federal officials said they believe one out of every two machines contains counterfeit parts, according to assistant U.S. attorney John T. Martin of Alexandria. Fay said that given the recent success of the program, probably about 10 percent of the machines in the country are counterfeit.
Nine Canadian companies have been indicted after a RCMP investigation, Fay said. Convictions in those cases would dry up the supply of illegal games, he said.
RCMP officials in Toronto confirmed the trials were set for December but were unable to comment on the charges.
Industry sources say it costs about $500,000 to develop a video game, and the average manufacturer will develop about 20 games each year. Of those, only about six are marketable.
"It's those six that have to make up for the costs of the other 14, plus show a profit," Fay said. The hottest game right now for both the legitimate distributor and the counterfeiter is Double Dragon, he said.
Vernon Lloyd, a spokesman for the Chicago-based Taito American Corp., said the company has no idea how much it is losing through counterfeit Double Dragon games.
"But for every one the counterfeiters sell, that's one less we're going to," he said. A legitimate Double Dragon game sells for about $2,500.
Fay says it is easy to spot a counterfeit game by looking at the game cabinet.
"The guys buying the counterfeit boards will take an old Pac-Man machine, drop in the new counterfeit board and spray paint the cabinet," he said. On many counterfeits, the header -- the lighted marquee across the front of the machine -- does not have the game's name or manufacturer.
And, he said, the quality of the counterfeit is well below that of a legitimate game. "I think if a kid puts a quarter in a machine, he is entitled to play the real thing," Fay said.