Reference no: EM133010214

Question - Nintendo (NES) has a long history of licensing game development to outside companies. By 1991 there were 100 Nintendo licensed game makers in the US; Nintendo's in-house development accounted for roughly 10% of all new games. The licensing agreement limited each game developer to no more than 5 NES titles per year. All games had to be approved for content by Nintendo, which took about 1 month (total game development time was about one year on average). Licensees had to place orders for manufacture of approved games from Nintendo (i.e., licensees could not manufacture game cartridges themselves). Cartridges were produced for Nintendo by one of its approved subcontractors and each cartridge would have a security chip inserted. Based on what we have learned in class, why would Nintendo stipulate that licensees could only develop a maximum of 5 games per year?