Sony, the Japanese electronics company, has made an important breakthrough in its efforts to combat large-scale piracy of its PlayStation games console in China after a long investigati on that uncovered parts being assembled in a prison.
The probe, conducted over five years, has unearthed a web of at least 10 sub- contractors with a production capacity of 50,000 units a day for PlayStation consoles and controllers, as well as "modifying" chips.
In one instance, investigators followed a container loaded at one of the sub- contracting factories into a prison in Shenzhen, where it stayed for a number of days, long enough for it to be re-assembled by inmates. Chinese prisons often put inmates to work as part of their incarceration. But they are not exempt from local laws outlawing piracy.
Sony has a particular interest in stopping piracy of its PlayStation2 model as it is the company's most profitable product. Launched in 2000, Sony had sold 74m units of PlayStation2 g lobally by September.
The factories Sony identified as part of the piracy ring have been raided numerous times by the Chinese authorities and their own ers fined in recent years. However, they have continued operating by setting up the sub-contracting network.
Documents submitted to the Chinese government on the case allege that the factory owners used the profits from the original counterfeiting operation to expand their business and set u p a joint venture with a Hong Kong company.
With the failure of repeated raids to close down the factories, Sony Computer Entertainment, the unit of the Japanese company responsible for the Play- Station, has now sued two companies and three of their executives in Hong Kong for copyright and trademark infringement.
The company, in writs filed in the Hong Kong High Court in December against Great World Corporation and Chen Ming Great World Enterprise, also sought injunctions freezing their worldw ide assets and preventing them dealing in PlayStation products.
Counterfeited PlayStation controllers and consoles made in China have been sold domestically and also shipped all over the world.
Sony did not release Play- Station2 in China for the first time until January, partly because of the piracy issue and also because of concerns about whether consumers could afford it.
Sony Computer Entertainment on Tuesday declined to comment on the case but said the company "made every effort to work with the local authorities [in all countries] to fight piracy".
