When Nintendo sued Blockbuster - The Silicon Underground<br>Home » 1980s » When Nintendo sued Blockbuster<br>Dave Farquhar 1980s, Retro Gaming July 30, 2026July 30, 2026 0 Comment<br>Here’s a late ’80s memory you may not have thought about in a while. Do you remember going to the video rental store to rent a video game and getting the cartridge but not getting the instruction booklet? The reason video stores would rent you a cartridge without instructions dates back to events that started in late July 1989, when Nintendo sued Blockbuster.

The Computer Software Rental Act<br>In July 1989, Nintendo sent Blockbuster a letter telling them to stop copying its manuals. Later that week, Nintendo sued Blockbuster.Video rentals were a big deal in the 1980s. As VCRs became commonplace, small businesses proliferated renting out movies on video cassette for a nominal fee. A trip to the video store to rent a movie or two became part of many families’ weekend routine. It was cheaper than going to the theater, and much cheaper than buying the VHS tape outright.<br>Over time, renting out more than just movies became inevitable. A few pioneers rented out games in the Atari 2600 era in some metro areas. But video game rentals really took off as the Nintendo Entertainment System gained popularity.<br>But there were certain things such stores could not rent out. Music was one of them, and so was computer software. That was the result of a law called the Computer Software Rental Act, signed into law in 1990. Nintendo wanted video games to be illegal to rent just like computer software. They regarded every rental as a lost sale.<br>Blockbuster’s exception<br>Blockbuster, the largest video rental chain in the United States, lobbied Congress for the exception. Renting video games only amounted to about 5% of their annual revenue at the time, but they saw it as a growth area. Not to mention the profit margin was better than on video tapes, because game cartridges cost less than VHS tapes and lasted longer. So they argued for an exception, arguing that while music was very easy to copy and floppy disk-based computer software was relatively easy to copy, video game cartridges such as Nintendo games were not.<br>Yes it was technically possible even in the 1980s to copy video game cartridges, that wasn’t something the average household was able to do.<br>Blockbuster won out and got their exception. But it wasn’t long before Nintendo found a technicality, and they used it to intimidate not only Blockbuster, but even the small independent video rental shops. And they didn’t even wait for the law to pass before they struck.<br>Nintendo sues Blockbuster for copyright infringement<br>On Monday, July 31, 1989, Nintendo sent a letter to Blockbuster asking them to stop infringing on their copyrights. Later that week, on Friday, August 4, 1989, Nintendo sued Blockbuster for copyright infringement. Nintendo didn’t claim renting out game cartridges violated any copyrights. Nintendo sued because they found out Blockbuster was photocopying the booklets that came with the cartridges.<br>Blockbuster recognized that people renting a video game would want the instruction booklet so they could learn how to play the game. The problem was the booklets that came with game cartridges were really nothing more than a few sheets of glossy paper stapled together. They weren’t especially durable, and they were prone to having snacks or drinks spilled on them during a gaming session.<br>So the booklets frequently came back damaged, if they even came back at all. Frequently, the renters would misplace the booklet or forget to bring it back.<br>Solving the problem of missing and damaged Nintendo booklets<br>Blockbuster’s solution was pretty obvious. Photocopy the original booklet, file away the original, and hand out a copy with the rental. If the photocopy came back in poor condition or didn’t come back at all, they could just make a fresh copy for the next time someone rented the game.<br>Nintendo sued, claiming it infringed on their copyright. Which was a valid point, except when Nintendo didn’t hold the copyright. Which they didn’t always. Nintendo produced many of the NES titles themselves, but over time, an increasing part of its library came from third-party publishers like Capcom, Squaresoft, and Enix. The cartridges came in the same gray shells as a Nintendo cartridge, they contained a Nintendo seal of quality, and except in dire circumstances, Nintendo handled the manufacturing. But the copyright to the game and the manual actually belonged to some other software publisher.<br>It was a flimsy case, and Blockbuster warned it would have a chilling effect on smaller, independent video stores.<br>But both companies had too much at stake to risk losing. Nintendo and Blockbuster ended up settling out of court. The result of the settlement was Blockbuster wrote its own documentation and provided copies of those when you rented a game.<br>Contrary to some speculation online, Nintendo’s lawsuit didn’t bring Blockbuster...