Category Archives: Legal / Politics

Potential Liabilities Faced by MMOG Developers

Terra Nova just posted an article about a recent change in Second Life that has effectively devalued the property of many SL denizens. The article quotes a lawyer who cites established legal precedent to explain why Linden Lab (developer of SL) may be at legal risk in this (and related) matters. The basic argument: LL gave users good reason to think that some virtual land plots are worth more than others, so LL can be held liable for actions that devalue the land, no matter how many waivers users agree to when playing SL.

This is just one of the many unresolved legal issues popping up for MMOGs, and especially MMORPGs. I couldn’t find a good, succinct list online, so I’ve compiled one:

  1. What happens when one player steals another player’s property?
  2. What happens when players generate content that infringes upon the copyrights or trademarks of real-world companies? (Here’s an example other than City of Heroes). For that matter, what happens when one player copies another player’s work? Can they sue each other, and/or the developer?
  3. What happens when players (especially underage players) engage in “legally indecent” acts? Can EA (developer of Sims Online) be sued for letting a ten-year old operate a virtual brothel? Can it be sued by players who suffer real financial damages at the hands of a virtual mafia?
  4. Can developers be sued for impeding free market forces that generate real monetary value for players? (An especially interesting question, given that those forces are the key to many other potential liabilities on this list).
  5. What forms of gambling are permissable in an MMOG? Is it really legal for me to play slots in Second Life, given that SL currency has real world value?
  6. Do players have a right to free speech and expression? Can game EULAs contain (and developers enforce) a morals clause, like those in some employment contracts?
  7. At what point (if any) does a developer become liable for failing to prevent players from harrassing other players? What constitutes sexual harrassment?
  8. If virtual property has tangible value, how badly does a player need to violate a game’s EULA before a developer may evict them… without compensation for their virtual property?
  9. Can players use legal means to prevent the deactivation of an MMOG, or to force developers to open source a game prior to deactivation? (i.e. to protect the value of their property?)

I wonder how long it will be before the first in-game court system pops up in an MMOG….

PS. If I’ve missed any notable legal demons, don’t hesitate to comment.

Government Incentives for Video Game Companies

In the past several months, many government bodies world-wide have voted to give tax breaks (and other incentives) to video game companies. As the industry grows and becomes ever more central to entertainment in general, governments are seeing a rare opportunity to build their own game-centric “Hollywood,” with corresponding long-term economic and cultural benefits.

The Isle of Man, a tiny self-governing democracy in the British Isles, just announced a zero corporate tax rate for game companies. Its neighbor, the UK, also offers major tax credits to game developers, but apparently many studios fail to take advantage of this due to confusion and/or ignorance.

The Australian government has created a $25M fund to encourge local developers, with the stated purpose of freeing studios “from the onerous constraints publishers impose.”

The Singaporean government has also made a major financial committment to fostering local game studios and training its citizens in 3d animation and game engineering.

In the US, both Georgia and Louisiana recently announced tax credits for game companies.

VUG Permits Unofficial King’s Quest Sequel

Recognizing the value of active fan participation in media, Vivendi Universal Games has granted a group of dedicated volunteers the right to complete and distribute a sequel to the much-beloved (but discontinued) King’s Quest game franchise, so long as they do not use the King’s Quest name.

The volunteer group, calling itself Phoenix Online Studios, was initially ordered by Vivendi to cease and desist all activity. A movement to save the sequel was started, and apparently VUG took notice.

First: many congratulations to VUG for making this rare move. The vast majority of entertainment companies would never have relented.

Question: was it necessary to prevent the group from using the “King’s Quest” name, as opposed to simply requiring them to put “Unofficial” in the title? Perhaps, in exchange for use of the name, the developers could have been asked to require players to purchase the “King’s Quest Compilation”, which VUG is releasing in early 2006. Counter-Strike drove sales of Half Life in large part because you needed to buy Half Life to play.

“Family Entertainment Protection Act” Unveiled

So much for “slow news day.” A few hours ago, Senators Hillary Clinton and Joe Lieberman unveiled a bill that prohibits selling games with mature content to minors.

Predictably, the ESA responded almost immediately with a polite but firm rejection of the bill. The bill calls for the use of the ESRB as the yardstick via which content is judged, so it isn’t a total disaster for the industry. Ironically, the ESRB just got (very publicly) bashed by the The National Institute on Media and the Family… and Lieberman took part in that, too. Don’t politicians normally wait at least a couple of days to contradict themselves?

Kudos to for its coverage of all this, btw.

Game Developers’ Bill of Rights

Eric Zimmerman has published a “Game Developers’ Bill of Rights” on The bill is based on the Creator’s Bill of Rights, which was written for comic developers in 1988.

It begins with article #1: “The right to full ownership of what we fully create.” The other rights derive from this one, including final say over creative, distribution, licensing, and marketing matters. In other words, ultimate control.

Zimmerman quotes Greg Costikyan, who once argued that developers should retain the rights to their games “because they fucking should.” Points for succinctness, but not much else. In any industry, when you take money from an investor to fund an embryonic venture, the investor usually ends up owning the venture. There are two ways around this:

  1. Fund the venture on your own to start, then negotiate for more control based on your initial, demonstrable success.
  2. Become respected enough that you can negotiate for control rights from the very beginning of the venture process.

As an entrepreneur and small business owner, I wish things weren’t this way, but they are. Why not focus on practical solutions to developers’ problems? Working towards greater solidarity would be a good start. Support of digital distribution initiatives would be another.

Ultimately, a developer is free to negotiate their own deal — or to walk away from an “unacceptable” offer. A publisher that does business with an inexperienced developer is taking a big risk… which explains (however unsatisfyingly) their ownership demands. Do I think publishers abuse their control? In many cases, yes. Are they wrong to negotiate for ownership in the first place? Probably not.

Doug Lowenstein: Taking Games to the Next Level

Doug Lowenstein, president of the Entertainment Software Association (ESA), spoke for us at MIT today. Some interesting quotes (paraphrased because I can’t type fast enough):

On gamer demographics: The average age of gamers today is 30. Even if you discount casual games like solitaire, the average age is still mid-to-late 20’s.

1/3 of all gamers are women, but most of them are casual gamers. There is content with cross gender appeal (like sims, mario, etc). But we really need something more profound and fundamental — a cultural shift that tells women that games are not just for men.

DJE: How about a marketing shift? More ads including women; fewer ads including blood, sweat, and/or shrieks of rage?

On content diversity: Say what you want about Passion of the Christ, but it’s the third biggest box office moneymaker of all time. ~37M people saw the film. It revealed that there’s this huge audience that was being ignored … those who want something with an openly religious theme. What is the game industry doing to explore this and other underserved markets?

We need games that move *beyond* today’s conventions; games that keep you up at night making you wonder if you made the right choice in the game.

DJE: Planescape Torment was like that. I agonized about my decisions, then I agonized about reloading the game to experience the alternatives. 😉

On the complexity of games: Too many buttons, too many things to figure out. No one likes to die over and over. We make games so complicated that there’s an entire book publishing industry built around addressing the problem!

DJE: More reason to be excited about the Nintendo Revolution — why use a million buttons when you can communicate so intuitively with your body?

On pricing: Next-gen AAA titles will be more expensive … approximately $60 at retail. What about a game sold for $9.99 for ten hours of play? It would be a lot cheaper to make. One part of the problem is that reviewers look down their nose at shorter games, calling them “limited” or “shallow” or “simple.” My point is that we need games that are limited and simple.

DJE: This would definitely broaden the market; some people want to buy the latest games but just can’t afford them. Giving them a choice is smart. It might even help fight piracy. Episodic content is another solution.

On cultural backlash: There aren’t hordes of 12 year olds buying Grand Theft Auto. Most of the time, little Johnny got it from mom and dad (and that’s taken from federal data, not industry-sponsored research.)

However, we ignore the legitimate concerns of moms and dads at our own peril. They buy, and increasingly, play our games. We’ve all seen games that contain controversial content which is constitutionally protected, but which raises the question: was it really necessary to realize the designer’s vision in this case?

See the semi-complete text for Doug’s speech, minus anything I missed because I type too slowly.