As many as 400,000 Marylanders are eligible to receive $5 discounts on Nintendo game cartridges under an agreement settling a state and federal investigation of alleged price-fixing by the giant video game company, it was announced today.
Nintendo of America Inc., the distributor of Nintendo video games, has agreed to provide up to $25 million in discount coupons to consumers nationwide and pay nearly $5 million in cash to settle the investigation, led by Maryland and New York in cooperation with the Federal Trade Commission.
Nintendo is accused of forcing retailers not to discount the suggested retail price of its Nintendo Entertainment System home video consoles, preventing competition that could have saved purchasers millions of dollars, Maryland Attorney General J. Joseph Curran Jr. and other officials said at a news conference in Washington.
Nintendo allegedly demanded that retailers sell its 8-bit consoles for $99.95 from June 1988 through December 1990. Retailers who didn't were threatened with a cutoff of supply, state and federal officials said.
Nearly 25 percent of American households had purchased the Nintendo system as of 1989, FTC officials said.
In agreeing to settle the charges, Nintendo denied having violated antitrust laws. A statement issued by Nintendo said "the company opted to maintain the goodwill of its loyal consumers, rather than engage in lengthy court proceedings."
Nintendo is not required to pay any money directly to consumers. Instead, it will issue a $5 game-cartridge coupon to consumers who purchased its consoles from June 1, 1988, through Dec. 31, 1990.
Eligible consumers whose names already are on file with Nintendo automatically will receive coupons once final court approval is given. The states' charges and the proposed agreement were filed with the U.S. District Court in New York City.
Consumers can call the company's regular toll-free number, 1-800-255-3700, to determine if their names are on file. They must identify the serial number of their console to establish eligibility.
The settlement requires Nintendo to redeem a minimum of $5 million in coupons and a maximum of $25 million.
The company also will pay $1.75 million to cover the administrative costs of the states' investigation, with $100,000 going to Maryland, Curran said.
Nintendo will pay up to $3 million more to all states that participate in the settlement, with each state's share determined mainly by its population.
Maryland could get about $60,000, which would be deposited in the state's general fund, Curran said.