Atari Games Corp. has sued rival computer giant Nintendo Co. of Japan for $100 million, accusing Nintendo of monopolizing the home video game market with a system that locks out competitors' game cartridges.
The U.S. District Court suit filed this week said Atari Games of Milpitas, Calif., has finally developed "the functional equivalent of a key that will unlock the lockout system," after suffering $30 million to $35 million in damages over several years. The suit seeks triple damages under antitrust laws.Lynn Hvalsoe, general counsel for Nintendo of America Inc. in Redmond, Wash., Nintendo's U.S. subsidiary, declined comment on the suit.
Atari Games was founded in 1985 as a privately held company and is not affiliated with Atari Inc. of Sunnyvale, Calif., a publicly held company.
Atari Games said Nintendo controls more than 80 percent of the U.S. market for home video game machines. The suit said Nintendo has equipped its machines for several years with a computer chip that allows the machines to accept only video game cartridges that have a compatible chip.
"Using this barrier and its completely dominating position in the market for home video game machines, Nintendo has forced the more than 30 companies that have written games that play on Nintendo machines to have all of their game cartridges manufactured by Nintendo at prices it dictates," the suit said.
Nintendo's exclusionary practices limit competition and variety on the market and drive up prices, the suit said.