Reset and do it again

Last week attorneys representing smalltime developers of iOS apps announced a class-action settlement with Apple over App Store policies and practices.

The lawsuit is just one of a handful of cases against Apple and their aggressive control over app distribution on the iOS platform which, for reasons I'll never understand, continues to be utilized by millions of people. A substantial enough portion of the market that it approaches monopolistic control.

The control Apple holds over their ecosystem, and the surcharges they extract from developers that want to use it, has raised ire from small developers to economic behemoths like Epic Games, which has their own high profile case against Apple over the ability to allow "Fortnite" players to make in-game purchases without going through Apple's store. In watching the legal throw down between Apple and app developers I've been wondering how it might affect other closed platforms, particularly in the neighboring video game home console market.

After all, Apple's control over their devices and the programs that run on them are not dissimilar to how video game consoles have always worked. Nintendo, Sony, and Microsoft all act as gatekeepers to their respective platforms. Whether it's a physical disk or a digital game sold through an e-shop, console developers have to sign off on the product and they demand their cut of the sales.

What happens when a game developer decides they don't want to have to go through Nintendo to put a game on a Nintendo system? Then I remembered we already know what happens because it already did more than 30 years ago.

Nintendo in the late 1980s dominated even more of the American home console industry than Apple currently holds on the mobile market, and they were just as, if not more, strict about what they allowed on their platform. Video games on the platform had to be approved Nintendo, who also handled the physical manufacturing of the cartridges. The company even went so far as to build in a "lock-out" chip to keep rogue developers from making their own games.

This iron fist on their platform was not without reason. The success of the NES was an uphill climb following the crash of the video game industry in the early 80s. That crash was in part due to the Atari 2600 and its laissez faire approach to game curation, resulting in a flood of low-quality titles that ultimately bogged down the market. Not wanting history to repeat itself, Nintendo took steps to limit the number of games a developer could make and made sure that production of cartridges went through them.

Enter Tengen, an Atari subsidiary that was none-to-thrilled about the restrictive environment. In 1988, Tengen filed a $100 million antitrust lawsuit against Nintendo, challenging Nintendo's restrictions.

The arguments between both parties were very similar to the current legal battles Apple faces today. Tengen argued that Nintendo's 80% market share of the industry gave them monopolistic control, kneecapping developers by forcing them to use Nintendo's process, and pay the royalties that go with it. Nintendo, meanwhile, argued that their policies ensured quality and kept video game supplies from exceeding demand.

Tengen ultimately lost their lawsuit, partially due to the fact that at the same time they were suing Nintendo, they also reversed engineered code to bypass Nintendo's lock-out chip to produce their own non-Nintendo approved cartridges. Tengen's version of "Tetris" is famous for the less-than-legal methods used to create it and is a wild story in its own right.

But while Nintendo prevailed in court, the case did cause them to loosen their grip a little bit. The success of Tengen's illegally produced games, and the meteoric rise of Sega as a rival platform developer, demonstrated that supply wasn't going to exceed demand as it did a decade earlier.

It seems likely that history is repeating itself in the case of Apple. Whether or not Epic Games prevails in its lawsuit against Apple, the shake-up has already started. The recent settlement with the small developers demonstrates that Apple knows they are on notice and should probably dial things back on their own before somebody does it for them.

Travis Fischer is a news writer for Mid-America Publishing and still doubts that we'll see home console platforms forced to open in the same way we would expect from our tablets or PCs