WHAT ABOUT

TRADITIONAL DISTRIBUTION?

"Some American tradesters at the factory and distribution level are plenty upset by all this," commented a coin-op legal expert. "But parallels are totally lawful. Whether they are new or used boards doesn't make any difference under the law. Capcom Japan's sales to its distributors in foreign markets were also totally lawful. I don't really see what anybody can do about

it.,,

According to some observers, the bold use of parallels by certain "establishment" U.S. dealers may pose a possible challenge to the trade's traditional distribution pattern, formed by decades of a disciplined market. "Sure, from a legal point of view, every distributor has the right to sell parallels," said one prominent West Coast operator. "Until now, the question has been whether distributors would claim a `moral'

POP-A-SHOT, INC.

P.O. Box 1073 • Salina, KS 67402

(913) 827-6229 FAX: 913-827-6336

ALSO AVAILABLE...

FACTORY RECONDITIONED GAMES!

right to deal in these goods. However, with Champion Edition we've seen some of the industry's largest and most respected distributors jump into the parallel market early and aggressively. It's like an endorsement of the whole process. If it's okay for those guys, it's okay for everybody."

SMILES & FROWNS

Depending on who you talk to, these results are viewed as disruption... or liberation. "This situation is exactly why we wanted parallels to be legal in the first place," declared Bill Beckham, the Ohio operator whose 1987 lawsuit touched off the trade's multi-year parallel battle. Said Beckham: "American operators want to be competitive in the world market. If games are offered as kits in every other market in the world, then we want the choice of buying them in kit format, too."

Authorized Capcom distributors are not thrilled about the situation. Betson Distributing (the largest U.S. distributorship, with several offices nationwide) carries Capcom video product. Betson president Peter Betti told RePlay: "Parallel sales are a minor annoyance at this point. They have not had any serious impact on our sales of Champion Edition, and certainly not on our future marketing plans. However, we are dismayed that some reputable dealers have gotten involved in selling parallels. We feel that if such a practice continues or becomes broader, it will not be good for the long-term health of the industry."

Others among Capcom's authorized U.S. dealers reportedly toyed with the idea of dealing in parallels themselves, in order to compete and to get sufficient stock of this high-demand item. However, this is viewed as unlikely. "Two wrongs don't make a right," said one authorized dealer. "In the long run, anybody who has the line, then sells parallels on top, is just contributing to the problem. Any distributor who did that would be cutting his own throat."

Certain smaller distributors have told RePlay they would like to offer parallels, or even transship certain U.S. product as jobbers, but they

claim a double standard prevents them. "Apparently it's okay for the big guys, but I'd be punished f or doing the same thing," complained one dealer. "My firm or our suppliers could possibly lose certain lines."

LEGAL ISSUES

Again, parallels themselves are legal to buy, sell and operate. However, some suppliers are said to be selling copied Capcom monitor bezels, cabinet graphics, etc. along with the game. Technically, use of such materials with a parallel board by U.S. operators is not legal under trademark and copyright law.

Here again, this practice has upset some tradesters, while others simply shrug their shoulders. "Operators just have to be aware that it's illegal to use Capcom's name on the game," said one street veteran. "But that doesn't stop kids from playing. They know that it is."

A more serious legal issue is the alleged availability of counterfeit versions of Champion Edition. Reports about this subject were mixed. According to parallel advocate Bill Beckham, the worldwide counterfeit industry always cranks up very quickly after the release of a hot new game. Confirmation on this came from the coin-op "establishment," too. "Counterfeits are around; we all know it," declared one authorized Capcom dealer. Also confirming this allegation, the former employee of a foreign dealer told RePlay that his old boss was definitely selling counterfeits of the game.

On the other hand, some expert sources said in mid-May that nobody had been able to physically verify the presence of counterfeit Champion Editions in the U.S. However, industry observers believe the appearance of counterfeits is probably just a matter of time. Indeed, by the time this issue of RePlay arrives in your mailbox, the first counterfeits of Champion Edition could have been manufactured, sold and (we hope) seized by U.S. Customs.

RePlay urges readers to follow the law in every detail. If you have any questions about legal issues, contact AAMA Director of Investigations Bill Kidwell at 319/337-9618.

AMERICA'S HOTTEST BASKETBALL GAME...

"THE ORIGINAL GAME"