Why are old video games popular again? In a word: emulators.
An emulator is software that mimics a video-game experience on a personal computer. Some major emulator companies, like Connectix and Bleem, charged for their software and access to multiple games.
But many emulators are "freeware" - free downloads developed by anonymous computer geeks who were ticked off that their old games could not be played whenever the video-game manufacturers introduced a new console, according to James Conley, professor with the Center for Research in Technology and Innovation at Northwestern University's Kellogg School of Management.
Video-game manufacturers didn't like emulators and have waged court battles similar to the ones that gave the music industry a public-relations black eye when they sued college kids for sharing songs online.
But the game companies release a new game system, on average, every five years. If old games won't work on the new system, firms run the risk of regularly making their best customers unhappy. And if those customers already own a game in an obsolete format, it's dicey to go after them if they find a way to continue enjoying the game in another format for their own private use.
Conley wrote an influential white paper in 2004 called "Use of a Game Over: Emulation and the Video Game Industry." Three years later, the Big Three (Nintendo, Sony and Microsoft) have adopted many of his suggestions.
He says the courts regularly ruled in favor of the emulator firms because the manufacturers relied on copyright to protect their games instead of patents and intellectual-property rights.
Also, the emulators did a nifty - and perfectly legal - tap dance around the coding and the copyrights because they focused on how the games functioned, he said.
Conley even presented his findings to Sony in 2004.
"My suggestion to them was, 'Why don't we embrace it and see how we can't make this a positive thing as opposed to viewing it as a legal morass,'" he said.
So Sony now manufactures PlayStations that allow "backward compatibility," which means old games work on the new system. Sony and Microsoft also bought pieces of Connectix. And Nintendo and Microsoft are now making many extra millions by making retro, or classic, games available as downloads.
"It was low-hanging fruit," Conley said. "There was all this money sitting around. People want these games; you don't have to convince them that they're good games. It just makes economic sense to take this intellectual property and use it to try and eliminate the competition."
It also softened the industry's PR reputation by showing consumers that it was responsive to public demand for classic games, Conley added.
Although Nintendo spokeswoman Beth Llewellyn still calls emulators "the greatest threat to our industry," a bigger threat would appear to be bootleg games. Llewellyn says law enforcement agencies have seized 100,000 counterfeit Wii games since January alone.
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