WASHINGTON – Federal customs agents Wednesday raided more than 30 businesses and homes in 16 states, looking for devices that allow pirated video games to play on Wiis, PlayStation 2s and Xboxes.
The alleged sale and distribution of illegal modification chips and copyright circumvention devices for the popular consoles and others included 32 search warrants in 16 states, said the U.S. Immigration and Customs Enforcement.
ICE declined to release the names of those targeted, but said they are allegedly responsible for importing, installing, selling and distributing foreign-made devices smuggled into the U.S.
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Illegal chips and other devices used on gaming consoles violate the Digital Millennium Copyright Act of 1998. Sales of counterfeit or illegally obtained games costs the industry about $3 billion a year globally, not including Internet piracy, estimates the Entertainment Software Association trade group.
Piracy losses for Nintendo and its game developers and publishers likely totaled $762 million last year alone, said Jodi Daugherty, senior director of anti-piracy at Redmond, Wash.-based Nintendo America.
Daugherty's five-person team coordinates global anti-piracy efforts for Nintendo's Japan-based parent company. Since April, the company has helped law enforcement agencies worldwide seize 61,000 counterfeit Wii modification chips, she said.
Wednesday's federal raids came after a yearlong investigation conducted by ICE's Office of the Assistant Special Agent in Charge in Cleveland, which coordinated with the U.S. Attorney's Office for the Northern District of Ohio and the Department of Justice's Computer Crimes and Intellectual Property Section.
ICE said it also received assistance from companies and industry trade groups.
"Illicit devices like the ones targeted today are created with one purpose in mind, subverting copyright protections," Julie L. Myers, assistant secretary of Homeland Security for ICE, said in a release. "These crimes cost legitimate businesses billions of dollars annually and facilitate multiple other layers of criminality, such as smuggling, software piracy and money laundering."
Redmond, Wash.-based Microsoft Corp. (MSFT) issued a statement applauding ICE's efforts to reduce piracy and protect the gaming industry's intellectual property. A company spokeswoman would not divulge Microsoft's individual piracy losses.
The raids were conducted in California, Florida, Hawaii, Idaho, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas and Wisconsin.
Shares of Microsoft added 8 cents to $29.07 in afternoon trading, while Sony Corp. (SNE) dipped 87 cents to $51.87.