Sega Shuts Down Computer Game Pirates

S A N   F R A N C I S C O, July 21, 2000 -- Sega announced Thursday it had crushed more than 60 illegal Web sites and 125 auction sites selling pirated versions of its Dreamcast games which, until recently, was viewed as one of the most secure digital entertainment systemson the market.

“Sega supports a creative community of talented artists.Pirates are parasites that hurt this community and will not betolerated by Sega,” said Peter Moore, president and chief operating officer of Sega of America Inc.

“This is just the first step in an even bigger action thecompany will undertake to stop this problem. We will continue totake aggressive steps to protect our business, consumers and thecreative talent we have at Sega.”

Sega of America Inc. is a division of Sega Enterprises Ltd. of Japan.

‘Utopian’ Dreams

In attacking Dreamcast, the pirates were taking on what manyindustry analysts regarded as the Fort Knox of online intellectualproperties — equipped with far more complex protections thanthe relatively simple music, film and video files targeted bycontroversial services like Napster and Scour.

Sega’s Dreamcast system features both internal copyprotection and a proprietary “GD-ROM” compact disc capable ofstoring almost twice as much data as an ordinary disc.

But earlier this month a shadowy group of computer hackersdubbed “Utopia” announced it had managed not only to copyDreamcast games on to normal CDs, but also had developed “bootdisc” software which would trick Sega’s own hardware intoplaying the pirated versions.

Since then, several dozen Dreamcast titles have beenreleased on the Internet and traded on underground networks, suchas Internet Relay Chat (IRC).

Sega said Thursday it was working closely with Yahoo! Lycos,Excite, eBay and Amazon to shut down auctions by peopleattempting to sell illegal games and pirated “boot” disks.

Going After the Big Guys

Charles Bellfield, Sega’s director of communications, saidthe company’s drive against the Internet trade of piratedversions of Dreamcast marked one of the first times that theDigital Millennium Copyright Act of 1998 had been used to goafter the Web hosting companies and Internet Service Providersused by pirate traders.

“We’ve done the first level, which is cease and desistorders to auction companies and also to Web hosting companies.If they do not comply then legal prosecutions will start,”Bellfield said.

“This is the first time this act has been used not just tostop piracy, but also physical sales over the Internet,”Bellfield continued. “It is the first time that Web hostingcompanies and Web auction sites are being held accountable forthe contents of what is being sold.”

Doug Lowenstein, president of the Interactive DigitalSoftware Association, said Sega’s attack on Internet copycatswas an example of a new willingness to hit back at a piratetrade that cost the industry more than $3.2 billion in 1998, thelatest year for which figures are available.

“Piracy is one of the biggest business threats our industryfaces, and Internet piracy is especially virulent,” he said.

Since noticing the first cracks in Dreamcast’s armor, Segahas stepped up work to close software loopholes, Bellfield said,adding that CD space limitations meant that only a handful ofthe company’s Dreamcast offerings were capable of beingillegally copied.

“There are only certain games which they’ve been able topirate here. They haven’t been able to pirate all of ourcontent,” Bellfield noted. “Looking ahead, both technical andlegal measures will minimize the risk … and Sega will beextremely aggressive against people who try any kind ofpiracy.”

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