John Paczkowski

Recent Posts by John Paczkowski

Bushnell's Newest Game: Atari WRONG

pong.jpgGaming piracy is as antiquarian a concept as PONG. So says Atari (ATAR) founder Nolan Bushnell. And who are we to disagree with the man who invented the world’s first (or second) video-arcade game?

In remarks at the Wedbush Morgan Securities annual Management Access Conference this week, Bushnell heralded the Trusted Platform Module as the gaming industry’s long-awaited solution to piracy. “There is a stealth encryption chip called a TPM that is going on the motherboards of most of the computers that are coming out now,” claimed Bushnell. “What that says is that in the games business we will be able to encrypt with an absolutely verifiable private key in the encryption world–which is uncrackable by people on the Internet and by giving away passwords–which will allow for a huge market to develop in some of the areas where piracy has been a real problem. … The TPM will, in fact, absolutely stop piracy of gameplay. … As soon as the installed base of the TPM hardware chip gets large enough, we will start to see revenues coming from Asia and India at a time when before it didn’t make sense.”

Thing is TPM is not exactly a “stealth” chip. It’s been around for years. Conceived by The Trusted Computing Group–whose members include Microsoft (MSFT), IBM (IBM), Intel (INTC), HP (HPQ) and AMD (AMD)–TPM’s purpose is to secure commercial software at the hardware level. As Ross Anderson, Professor of Security Engineering at Cambridge University’s Computer Laboratory explains, it essentially “transfers the ultimate control of your PC from you to whoever wrote the software it happens to be running.

At least it does in theory.

Anyway, point is, TPM is a relatively well-known technology that’s been shipping in machines from Dell (DELL), HP, IBM, Toshiba, et al. for years. So presumably the “installed base” to which Bushnell refers is already quite large. Yet, we’re not exactly seeing those increased revenues from abroad. In fact, we’re seeing increased losses. Software piracy cost global businesses $47.8 billion in lost revenue last year, up 20% from 2006.

So what’s Bushnell going on about?

Who knows. But it might have something to do with this: In addition to being the inventor of Pong, and founder of Atari and Chuck E. Cheese Pizza Time restaurants, Bushnell also serves on the board of directors of Wave Systems (WAVX). And Wave Systems is a leading–but apparently struggling, provider of hardware-based digital security based around–you guessed it–the Trusted Platform Module.

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