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Until recently, there was little incentive for the Japanese to develop a software industry of their own. Software was usually custom designed by computer manufacturers and included in the price of the machine. Hardware engineers were granted higher pay and had more status than software designers. Language and culture also presented formidable barriers to Japanese software makers trying to penetrate the U.S. market. In developing tax-computation programs, for example, it is not easy for computer experts in Tokyo to try to keep up with legal changes in the U.S., some 5,000 miles away.
The Japanese, however, have come up with an innovative move that may help them crack the U.S. software market. Kazuhiko ("Kay") Nishi, 28, president of Microsoft Far East, the U.S. company's sales agent for Japan, has developed MSX, a standardized hardware and software system for small personal computers. The norms have been generally adopted by 35 companies, which include such big-name Japanese brands as Sony, Panasonic, Sanyo and Toshiba; Philips of The Netherlands has also joined up. The MSX system is designed to permit programs written for one computer to run on all of them. The machines built to the MSX specifications will be unveiled in the U.S. later this year. Some computers will come equipped with high-quality printers and sell for less than $1,000, making them highly competitive with American products. If these machines are successful, they could create a market for Japanese software.
Japan is fighting American software on another front. The powerful Ministry of International Trade and Industry (MITI) wants to see software treated as industrial property covered by patent law, which allows for only 15 years of protection. The U.S. Government argues that software is intellectual property and should be protected for up to 50 years under copyright treaties. Mill is also pushing for an arbitration system, in which software developers could be legally obliged to make certain products available to competitors if the product is considered "highly useful to the public interest." U.S. officials are extremely wary of the arbitration proposal, and negotiations are stalemated.
While software industry growth remains steep, development and marketing costs are climbing. One of the firms hit hardest is VisiCorp, which rose to early industry leadership as the distributor of VisiCalc, the business planning program that is still the alltime bestseller, with more than 700,000 copies sold. But VisiCalc has been surpassed by newer programs like Microsoft's Multiplan, and sales are lagging. At the same time, VisiCorp has been burdened with the development woes of its elaborate Visi On program. VisiCorp is also engaged in a messy court battle with Software Arts of Wellesley, Mass., the company that actually wrote VisiCalc. Last September VisiCorp sued Software Arts for $60 million, charging that the creators had failed to keep the program up to date. Software Arts in February filed a counterclaim, arguing that it wanted all the rights to VisiCalc returned because VisiCorp had broken a marketing agreement.
Companies that make entertainment software for personal computers have suffered setbacks during the past year. Too many firms entered the field too quickly, and customers are becoming more discriminating about the