Nintendo may end up owing royalties on every Wii sold

Nintendo lost a lawsuit today that could see it forced to pay out many millions in royalties to Dutch electronics company Philips. The reason? A patent owned by Philips relating to motion control that Nintendo has infringed with its Wii games console.

Philips hasn’t been publicly specific about what exactly the patent covers, but it relates to “motion, gesture and pointing control.” The company has been licensing this patent to both games consoles and set-top box manufacturers for years, but Nintendo refused to sign up for and pay the license when Philips pursued such a deal back in 2011. So Philips did the only thing it could: sue Nintendo.

Philips won the court case in the UK, but it has three more ongoing including one in the US. Philips wants “fair compensation” for its patent, suggesting a small royalty fee on every Wii sold, and possibly every Wii U, too. If Philips wins the other cases, then Nintendo may end up paying out a royalty to cover all 101 million Wii consoles sold to date. That’s going to be a huge chunk of change even if the license is only a few cents per console.

It seems highly likely Nintendo will appeal the decision and Philips will need to continue to fight and wait for the royalty payment. With potentially millions on the line and now a decision in its favor, I doubt we’ll see the Dutch company throw in the towel. You also have to assume a win in the UK will be quickly integrated into the other ongoing lawsuits as proof Nintendo is infringing.

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