Capcom ran into another high-class problem as its competitors developed their own fighting games. Once Street Fighter 2 took off, developers around the world produced similar games like Fatal Fury and Mortal Kombat, many of which became very successful on their own.
When Data East released Fighter's History, though, Capcom decided it hit too close to home, with specific pieces of artwork directly ripped from Street Fighter. In September 1993, Capcom filed a lawsuit alleging copyright infringement.
There were a number of games in the marketplace that were arguably copycat versions of Street Fighter 2. And of course, I don't think Street Fighter 2 could have claimed to have completely originated the fighting game per se, but there were a couple of games, and Fighter's History was one of them, that had a lot of very close copying of the joystick movements that translated into character movements and so on. So I think the chairman, [Kenzo] Tsujimoto, was the one who ultimately decided that the company needed to go after somebody to kind of make an example and deter further copying.
Fighter's History was pretty similar, and during that time a lot of people would come up to people at Capcom, come up to Mr. Tsujimoto, and say, "Are you sure you're going to let this go? You can't really let this go. This is really bad."
This was during a legal era when there were a number of copyright so-called "look and feel" cases. ... And this was kind of a defining era in terms of what the courts were going to uphold as copyright infringement.
Claude Stern (Trial Counsel representing Data East):
The video game industry was actually very, very young, and one of the questions was what represents protectable expression when you have a young industry. ...
If you look at Fighter's History compared to Street Fighter, there are certain obvious similarities. There's a colorful background and the fight takes place in a center circle, the fighters square off, they're in an arcade game ... And so one of the questions was, well gosh, isn't that really all unique to Capcom? Is that really something that they had created, and that they had all the copyrights to?
The problem was that in a developing industry — we see this now today — if you start giving that sort of protection to the first entrant into a market, that entrant has got the opportunity to become a monopolist. ... We very much saw the case as a case that ultimately put front and center the question of could a person own a genre? ... Could somebody come up with a new idea, a new way of doing something, and then ace everyone out from being able to compete in that field without coming up with a completely different look?
There wasn't anything like it. There wasn't any other big lawsuit like that that Capcom filed during that period on that kind of basis.
I think [Data East was] very nervous. There was some terrible evidence. I mean, the fact of the matter is the Data East artists were copying Street Fighter. The ultimate work wasn't a slavish copy — a pixel-by-pixel copy — but they had evidence that we were copying things. And our response was, well, what we were copying wasn't protectable. So for example, we might make a copy of one of their images, but then we'd change the image, change the background, change the fighter's stance, change the type of kick. But even then, there was a lot of similarity in the kicks and the moves. But of course our response was, "Well wait a minute. Those are conventional moves within the martial arts field. You can't own that." ...
Capcom was taking a position ... saying, well look, the look and feel of Street Fighter and Fighter's History are virtually identical, so therefore there should be infringement. Our position was well no, actually ... Capcom, look, two fighters, they're in a ring. That's a convention. ... We need to be able to look at the work not as a unique artistic work, but rather as an embodiment of a variety of conventions that had been adopted over time. ...
Ultimately, that's what the court found. If you look at these works and you remove the conventional features, there's not a hell of a lot left.
One of the big reasons that Capcom didn't get more traction was the courts had already given weak protection to these kinds of cases, or almost no protection [in other industries]. ... The case settled, mostly because we weren't getting the traction we wanted with the courts, and we walked away.
[Court records show Capcom struggled to make a case for features such as its control scheme — a joystick and six buttons — being unique, and for its claim that consumers could confuse Fighter's History with Street Fighter 2 (supported by a comment from Nishitani saying he had not seen that happen).]
Following Street Fighter 2's U.S. release, Capcom executives knew they had a hit but didn't have a plan for a follow-up. One solution came from James Goddard, an arcade player who joined Capcom as a Street Fighter fan. Goddard was hired to put games in arcades and write earnings reports, but he curried favor with the development staff in Japan by also sending them design feedback from a player's perspective. Eventually he took a chance and pitched an idea for a sequel based on two changes — the ability to play as the game's four bosses, and the ability for two players to fight against each other using duplicate versions of the same character.
We were shot down the first time we pitched Champ Edition. [The team in Japan] said, "Why would anyone want to play the same character, and why would anyone want to play the bosses? We don't think that will be popular here." And that was because they weren't playing head-to-head hardcore. Oh sure, they had tournaments, but it was not their culture. It was not like our culture where it was like, "Man, I'm so tired of your Guile."
The competitive play style was more popular in America at that time. In Japan, people thought of Street Fighter as an action game and didn't really think of playing against other people.
Whenever I'd travel, instead of going out to strip clubs with the sales guys, I would actually go find a local arcade where Street Fighter was happening and I would talk to people. Because there was no internet back then. And I specifically got the same kind of thing from players, which was they wanted to play the same characters, they wanted to play the bosses.
I was never a gamer gamer. I was just a marketing and sales guy, so James was basically the guy who was giving me the feedback and information for me to go back to Japan and tell them what was going on.
I came in and said, "Look, they've shut this down. They think this is a stupid idea. I know it will make money."
Well, it came Halloween time, and again I went back to Golfland [where Capcom had tested the game originally to see how well it would perform] and I see this phenomenon going on, and that is all the players are dressed up like the characters. And I'm going, "Holy shit." And all these really young Asian girls dressed up like Chun-Li, and I'm going, "Wow." And then I see this other thing that really racked my brain. They were getting mad because one player was Chun-Li on a game, while the other player wanted to be Chun-Li and had to go to another game.
So I called Tsujimoto up and I said, "I know this is a long shot, but I believe we can run this thing again." And he goes, "What are you talking about?" I said, "Well, there's a real easy formula. We need to allow two players to be the same character. Let's come up with a game." I came up with the name "Championship Edition" [sic]. "Let's add a few new players, and let's let them play against each other." And Tsujimoto said, "Are you sure?" ... And I said to Tsujimoto, "It's way too soon to get off this game."
So he flew in and he said, "I want to see your distributors guarantee me that they'll buy at least a thousand of them to get me going to cover the development costs." This was back in the day. I can't believe that he would be talking that way [these days]. So he flew out there and I brought my six biggest distributors in, and Peter Betti from Betson Enterprises was the biggest distributor. [Tsujimoto] said, "We want to see how many of you guys will take it. So first we want to see if we can get a thousand games out of this unit to pay for it up-front." So he goes around the room. ... He goes to Peter Betti, "Alright Peter, how many do you want?" [Betti] goes, "A thousand. I'll pay you cash now. Let's get going." [Laughs] So anyway, just in that meeting alone those guys had committed to another 5,000 units.
Peter Betti (President, Betson Pacific):
They asked us, "If we did a Street Fighter 2: Champion Edition," would we be willing to buy any of them. I was there with my sales manager John Lotz, and we looked at each other and we go, "Yeah, we'll take all of them."
At that time, it was rare to put out a game that wasn't a direct sequel. So after Street Fighter 2's release, I actually kept tweaking the game, even though I didn't think we'd do anything with it. I just kept doing that because I wanted to. I had the idea of adding the four bosses to the game, but I kept that a secret initially. Then the company decided it wanted to put out an adjusted version, and I was like, "OK great, I've already been working on that." It was something different from what most companies were doing, so I liked that.
One of the things I tried to do, which was controversial ... When Championship Edition [sic] came out, I said, "We've gotta stop having the operators getting 25 cent starts and 25 cents to continue. This is a game that they should be getting 50 cents to start and 25 to continue." So I did something — I locked the operators out of being able to lower the start play to 25 cents so everyone had to be at 50. And took a ton of shit from that in the marketplace, and had to eventually go back in and do a chip change to allow everybody to do that. ...
My thing was, I just knew at that stage that it was a juggernaut that was not gonna happen that often, that everybody — everybody from the arcade to the operator to the distributor to Capcom — needed to really monetize that game. So I tried to do everything in my power.
Champion Edition went on to become the franchise's most popular arcade game. In a 2002 Edge magazine interview, Funamizu put its worldwide sales total at 140,000 units. And this time the success spawned not just counterfeiters, but hackers making their own tweaked and sped up versions under names like Rainbow and Thunder. Capcom had little choice but to keep up.
Rainbow Edition came out, the Taiwanese ROM upgrade with all the crazy fireballs in the air and the helicopter kicks working in the air — just everything broken. Super fast, super broken. We start hearing how these things are getting installed and operators are earning money off of them, but we're not getting any of the action. So I go down to — I don't know, Galaxy Arcade? I think it was in San Jose. I go and I take a look at this Rainbow Edition and I spend a good four hours playing it, looking at it and going, "Man, this is just garbage." On one hand, it's kind of like, "Woo — look at these crazy-ass fireballs in the air." And on the other hand, it's just like, "But it's so unbalanced." ...
I come back, and I spend the next few hours writing [a letter] to Japan saying Rainbow Edition is utter shit, utter garbage, there is no threat here, it is completely unbalanced and it's a fad. Because as a player, emotionally, that's how I felt. However, before I sent that fax off, I went into the cafeteria to play Champ Edition ...
I sit down to play [against my coworker Joel Pambid], and the weirdest thing happens. He picks Guile; I pick Zangief. I go to play, and oh my God, the game felt like it was underwater. ... I had just spent the last four to six hours playing Rainbow Edition at 25 percent speed increase, so Champ Edition felt like shit. It was so slow. For the next two hours, I could not shake that. And it threw my timing off. ... It was just kind of this oh my God moment where I went, "The real threat of Rainbow Edition is not all the fireballs in the air and the craziness. The threat is the speed is addicting, and it changes everything."
So I scrapped my report. I was there until three in the morning writing what my initial takeaway was, and then how much my motor skills were affected in just four to six hours of playing. ... I got the fax out saying, "Look, we need to do our own ROM upgrade to compete against these guys. We can kill them if it's balanced — it's spectacular but it's balanced. We can absolutely kill these illegals, but it has to be competitively priced, and it has to be just balanced to the next level. We have tons of feedback of what's wrong with Champ Edition on a tournament level. We could put in a bunch of stuff. It'd be awesome."
And I send that over. They were really worried about it, so they said, "OK fine." ... Everybody agreed, "OK we'll give it a shot." [But] the Japanese were like, "This is crap. We don't want to speed it up. We do not want to speed this up." And so anyway, because the business guys were all involved, they agreed to bring it to the — I think it was the AMOA [Amusement & Music Operators Association] show. Because it was all about the same timing.
So they took a version of the game to the AMOA show with Chun-Li throwing a fireball and at 5 percent faster, and we got hammered at the show. Hammered by the operators basically saying, "Fuck you guys. We'll buy the illegal one for $150 or $200 rather than this piece of crap here." And so Mr. Tsujimoto, who was the head of all of Capcom, had heard about this and that the numbers were not looking good coming out of the show, so they came to me and said — he's like, "You will design this ... and you have until tomorrow."
So I spent all night with my apprentice, Joe. We sat together, designed the whole thing out, a whole bunch of changes [such as making it 15 percent faster instead of 5 percent], and then we pitched them. And there was a lot of resistance. They flew me over to Japan a week later for two and a half weeks to do the development and sit with the Japanese to make it happen.
Basically, James came up to me one day and said, "Joe, Japan thinks they're gonna do some more stuff on Street Fighter. What's on your mind?" So I took a yellow pad and I wrote down everything I thought of, and thought of a bunch of counter-play elements [to give players more options against projectile attacks like fireballs], and gave that to James. And he said he'd take it to Japan and he did.
We had a lot — a lot — of arguments. Whenever James came over to Japan and had a meeting with the team, it was always a very exciting meeting. People would get so excited that they'd yell at each other. ...
James was somewhat pushy at that time, and when he saw some issue with the game he'd always request to fix that as soon as possible. But sometimes the team had [other] issues to deal with. They couldn't think about the U.S. market only. They'd sometimes get contradictory feedback from other markets, like Asian and European markets. So there were many reasons why they couldn't make changes, but still James was saying, "This change has to be made."
A big nightmare fight happened over there, over the fact that basically no one wanted to make it faster, and unfortunately the market spoke. My mentor Akira Nishitani was very disappointed with the fact that I wanted to make it faster. He no longer was my mentor after that. Because he had, down to the milliseconds, on how people could respond to seeing a fireball [by jumping over it, and then how the other player could counter with an] uppercut. And this was breaking all of that research he did. And I just showed him, at the end of the day, you speed it up 15 percent, people will adapt and they'll be able to see it. So that created a bit of a falling out. ... On Hyper Fighting, [Nishitani] washed his hands of it.
I actually don't remember that argument. ... I [had moved on and] wasn't deeply involved with [Hyper Fighting] ... I wasn't especially trying to move away from the series. It was just a timing issue. At that point, Street Fighter 2 development had ended and Aliens vs. Predator was having trouble so I jumped in midway through to help out on that. ...
However, my personal opinion was that [Hyper Fighting was] a bit fast. There were things you could barely see in the original game, and when it became faster you couldn't see them at all, so it became more about predicting your opponent's moves. I'm not against that approach at all, but one thing I was worried about was if it was going to become a game about predicting attacks, the game mechanics would need to be tuned to match that.
I think Japan was feeling that it was moving too quickly, and I was definitely [James'] back up on that; I was like, "This Turbo stuff is so much more improved over the standard version. The gameplay is faster; the movement is just as precise as it was before but you have to be able to process things so much quicker." And of course you'd also spend more money because Turbo fights can move up a little bit quicker and people spend more money faster.
I think the arguments started when we saw this Chinese or Korean pirated version. The team never believed making it twice as fast would make for reasonable gameplay. "It will end up losing all the strategies." But actually trying those pirated versions told them it could be fun. That helped them to be convinced there was a need for this. And of course, we did not want some pirates to take away our potential profits.
Tom was there for all the crazy shit. Dude was like, "Just let it go." He had to deal with a very riled-up version of me. ... I was way over the top once upon a time.
The most challenging part was, you know, whatever James said, the team said, "Isn't it just your personal opinion? Is this what all American people [think], like an average opinion from the American players? How can you prove that?" That was always the most challenging thing to prove to them. And then because James was a very hardcore Street Fighter 2 player himself, there were some characters he particularly liked. So he was more into Zangief balancing, sometimes [trying to make him stronger]. When the team sees that, then James' report doesn't sound credible anymore. So I always tried to make sure that his reports sounded fair to everybody.
[Capcom Japan was] really mortified when [Turbo] in Japan was super popular. There was a playtest where we showed up and there [were] kids freaking out, and that was kind of the end of the controversy. They just let me do what I wanted to do after that because it — it worked out. There's a darker story there I don't want to tell you, but let's just say we went to this test location and it worked out. I went with five changes and it was super successful, so after that they were like, "OK fine, let's just finish this thing."
Like most popular arcade games of the time, Street Fighter 2 inevitably made its way to home consoles. Given Capcom's publishing history and relationships with Nintendo, that meant starting on the Super NES.
In the summer of '92, the Super Nintendo system had come out, but they had a very, very thin library. As has always been Nintendo's case, they'll come out with a very good starting library that they develop internally, but very, very little of anything from third parties at that point. And Nintendo was getting beaten by the Sega Genesis.
The SNES sold well initially, but in the U.S. the Genesis had really found a foothold with Sonic and the whole "blast processing" [marketing], and so it was not a slam dunk for Nintendo anymore. ... When we came out with Street Fighter , suddenly that evaporated. It was, "If you want Street Fighter, you have to have Super Nintendo." It was the only game in town.
[Nintendo] really put some pressure on Capcom and said, "We want to have Street Fighter 2 come out on the console as quickly as possible."
Things happened very quickly. ... I mean, I think when we did the Super Nintendo version of Street Fighter 2, basically Nintendo stopped manufacturing [other games] in Japan and held everything up so they could make Street Fighter 2.
Tatsuya Minami (Planner of various Street Fighter console ports, Capcom Japan):
The thing that really sticks out in my mind is how crazy the schedules were. ... I wasn't involved directly in the first Super NES port, but then I came in afterward and led the Turbo, Champion Edition and PC Engine ports. ... All of those were super tight schedules. I remember just having tons of people, comparatively, on these projects.
Kazunori "Ippo" Yamada:
The biggest challenge was trying to cram the games into the limited hardware capacity. ... The Super NES had limited capacity. So if there was a sound like "aaahhh" — a long sound — we couldn't fit the full voice in, so instead we made a small "ah" sound and repeated it as "ah," "ah," "ah," "ah." That made it sound like the full voice, but saved on space. We had to come up with tricks like that to be able to fit all the audio in. ... I was involved in some of the later ports, but Mr. Nishimura, who was there before me, implemented that to save space on the Super NES.
I also remember all the programmers working super hard during the day, and then telling them that they had to go to sleep. One of the things that I remember very distinctly is the [quality assurance] teams would come in in the morning. And so when the programmers would go to sleep, we'd have to take all of the data that we'd been working on, burn it to EPROMs, take those, do checksums on them, and then manually push them into the circuit boards and make tons of sets of these so the QA teams could check the game starting in the morning.
"The biggest challenge was trying to cram the games into the limited hardware capacity."
That work would go on all night, and there would often be times when we'd be working until four or five in the morning, just making the actual prototype ROMs for these guys to be able to start the checks. Right now if I tried to do it, I'd probably double myself over and pass out, but back then, once we'd finish that, we'd go out, have a couple beers, and then go to bed and come back in the morning.
I personally think that Street Fighter 2 had a lot to do with the success of the Super Nintendo in the United States. I think without it, without that key game, [Nintendo] would have had a much harder time selling units up against the Genesis and Sonic at that point in time.
While Street Fighter 2 gave Nintendo an edge against Sega, Sega executives began to pursue Capcom, wanting the game on their system. Given Nintendo's long-standing relationship with Capcom, that wasn't an easy sell — Capcom was one of the first external companies licensed to sell games for Nintendo's systems, and to many that history was important. But to some, the game's sales potential was worth rocking the boat.
Over in Japan, the Sega executives were courting the Capcom executives ... there was some drama that went on over there ... it was difficult. But in the end, Capcom agreed to create a Street Fighter version for the Sega Genesis. And I heard that made the folks at Nintendo none too happy.
There was a very close relationship, or a reasonably close relationship, between Capcom and Nintendo. ... I remember Tsujimoto came over with his entourage and on our way to CES [in 1992, and] a few of us went up to Seattle and paid a visit to Nintendo, and spent a couple of days with Nintendo ... We spent time at [Nintendo of America President Minoru Arakawa's] house; we went out to dinner with him and the whole thing. And it was all about those relationships and how important they were, I think, that drove a lot of the business connections and decisions.
Laurie Thornton (Public relations manager, Capcom USA):
Everyone knew that Capcom was Nintendo's darling. The relationships back in Japan were very tight. I recall needing to withhold info about our specific launch plans and platform details while lots of negotiating was taking place behind closed doors.
I would like to believe I was pretty instrumental in getting [Capcom Japan] to start to support the Genesis system. I kept pushing that. I would go to Japan every month ... Capcom had a company house. We'd meet all the time and go down there and discuss what's going on.
I know Joe talked with Sega early on, and then finally we got the OK from Japan like, "Yes, they will devote resources to the Genesis." And we did a press conference after much back and forth, with Sega at the Sofitel [hotel in Redwood City, CA]. We had a breakfast for the press and whatnot and announced the partnership between Capcom and Sega. Although I think the art had Mega Man shaking Sonic's hand, obviously the first game was going to be Street Fighter 2: Champion Edition.
[Capcom Japan was] having an outside house program it. They weren't doing it in-house. It was probably in the spring of that year they had a version of Street Fighter: Champion Edition that they wanted me to look at. And they weren't happy with the quality of the game in Japan.
I remember when the Genesis version first came in. I checked out the ROM and I basically said, "This is terrible. Ditch the whole thing."
I played it. I thought, "It's strong enough to release." And I said, "If we don't release it, and we release it against Mortal Kombat in the fall, [we're going to be in trouble]. You guys don't understand what the power of Mortal Kombat is. They're out-spending us, out-marketing us with a much different game than Street Fighter. It's not really cartoon characters like Street Fighter; it's more realistic. We should release the game now. We'll have four months ahead of Mortal Kombat. We'll get to market first. We'll kill them."
Well, they chose to wait, to go directly against Mortal Kombat. I think we released [the games] within a week of each other. A lot of the orders I had were pending ... I think I had orders for two million units, a huge amount of product that was coming on the boat. And once it gets made, you can't cancel the order. It's on its way; it's coming. So at that point, I said, "Well, I think we're making the wrong decision." They disagreed with me. I said, "I still think we're making the wrong decision."
I remember it being like early multiplatform development [with contracts and negotiations that were uncommon at the time], because there were agreements with the hardware manufacturers. So if you put it out on Nintendo here, then you had to get it out on the Genesis and PC Engine by this time period or we'd be breaking contracts, etc.
After we said no to the outsourced version we ended up making it in-house. And Capcom let the team use 24 megs, where normally you could only use 16. So in the end, I was happy with how it turned out.
The game sold well. It didn't sell as well as we anticipated, because we released it head to head against Mortal Kombat. They had Mortal Monday. They were really, really a good marketing firm; I've got to give them credit for that. The gameplay itself wasn't, I don't think, as good as Street Fighter, but it had great marketing.
The big competition at that point was Mortal Kombat. A good friend of mine, Rob Holmes, was the president of Acclaim at the time — friendly competitors; it was really a different marketplace than it is today. ...
I don't remember if you ever saw that TV spot with Mortal Kombat and Street Fighter. I did a TV spot which typically you don't do — you don't really name your competitor point blank. But if you remember that spot, one of the security guards was going into a toy store ... So what happens is, you see a wall of video games and it starts to morph, and then Blanka's hand comes out and reaches over and grabs the Mortal Kombat game on the shelf and then takes it and crumples it and throws it on the ground. ...
So I get a call from Rob Holmes at Acclaim. He goes, "You're such an asshole." Jokingly. So I think, "OK fine yeah, whatever." I said, "Look, it was obvious that [Mortal Kombat was our] competition for Street Fighter. We might as well just address this and see what we can do." ...
So what happens is we had a Street Fighter comic book. And I never saw it. There [was] a very limited number of them. But have you looked at all the advertising in the Street Fighter comic book? It was all Mortal Kombat. I still have it somewhere here somewhere buried. I have a framed [Street Fighter] comic book with a letter from Rob Holmes saying, "Serves you right. I took all the advertising out in your comic book with Mortal Kombat."
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