Friday, August 31, 2007

Kwari: The First True "Gambling" FPS

Your "buy in" is the purchase of ammo. Your health bar is your wager. You lose money for damage taken, and gain money for damage inflicted. This is the basic concept behind the first true "gambling" First Person Shooter, Kwari, and it seems like a mild adaptation of the basic concept in poker to a completely new game and genre. This is truly a game of skill that you wager upon.

However, while the concept is a step beyond the model employed by sites such as Tournament.com, the legality is still questionable in the United States. As I've pointed out before, the Unlawful Internet Gambling Enforcement Act ("UIGEA") was created, at least in part, with online poker particularly in mind. Hence, the Skill Game Protection Act ("SGPA") is proposed to specifically exempt games for skill, which includes poker, from the UIGEA. However, the SGPA hasn't passed, and so therefore it is reasonable to assume that the UIGEA still encompasses games of skill until the courts say otherwise, even though the UIGEA is quite ambiguous on the matter.. As such, even though Kwari is purely a skill game, it may be covered. But, the overwhelming ambiguities in the UIGEA may provide Kwari with a loophole, or the SGPA would almost certainly exempt Kwari from the UIGEA.

There's also a bigger tax implication for players. If you are a master of Kwari and can walk away with thousands of dollars a month, is it ordinary income or gambling winnings? I think the argument can certainly be made that winning in Kwari is no different than what, say, Tiger Woods wins in golf or what any other professional athlete is paid. On the other hand, poker winnings are gabling winnings in the eyes of the IRS. The classification of Kwari winnings could easily go either way, and mean a significant difference in taxable income depending on the result.

[Via Joystiq]

Revised Microsoft Machimima Rules Coming "Soon"

It would seem that more and more people in the blog-o-sphere are joining the Microsoft Content Usage Rules coverage, most recently the EFF and the blog for the book Machinima for Dummies. Both of these parties were privvy to a conference call sometime yesterday in which it was revealed that Microsoft is updating the Content Usage Rules (the "Machinima Rules"), and revised rules should be made public "soon." I personally hope that these rules address some, if not all, of the major issues I have pointed out in my coverage of the Machinima Rules. Once the new rules are posted, I will post a revised analysis.

For more information see my previous coverage of the "Machinima Rules":
Microsoft's New Content Usage Rules: A Small Step for Machinima
New Microsoft Machinima Rules Revisited
Microsoft Machinima Rule Podcast
More Details on the Microsoft Machinima Rule

Thursday, August 30, 2007

Chinese Editorial Calls for Increased Regulation of Virtual Goods

An editorial on China View has some rather harsh words for the online gaming industry in China, specifically for those in the "black market" of virtual goods. The sibling to the gold farming issue in China is the theft and resale of virtual goods.

The article brings up a number of interesting points, but also seems to confuse the "virtual theft" concept with the "gold farming" one, although both issues have been met with cries for regulation, along with the already regulated "underage gaming" issue in China.

The editorial, however, leaves me with mixed feelings. On the one hand, it is always positive to see people outside the gaming establishment finally realize and accept that these virtual goods, be they land in Second Life or an Infinity Blade in World of Warcraft, do have a "value." Moreover, the idea of protecting players from theft is definitely a positive one. On the other hand, the idea of additional government regulations never seems to be the most appropriate approach. While this could be in China rather than the US, I still can't help but feel the regulations are inappropriate.

The major difficulty would be the near impossibility of government alone policing those systems, but on the flip side, the game providers lack any real enforcement tools if and when they can track virtual wrongdoings. The logical outcome would be a necessity for cooperation between government and game providers, but I think the mandates should come from the game providers, not the government. After all, the government does not seem to, on a basic level, understand these games. This would only lead to ineffective legislation that would breed resentment in the gaming community or lead to a downward trend in the games overall.

Regardless of your stance on game regulation, the wisdom of self regulation is evident in many industries, from law to medicine. In this case, where a real crime is involved, similar cooperation has worked for other industries. Of course, only time will tell if any actual regulation is attempted, but given the trend to monetize virtual worlds, some sort of "law enforcement" is almost inevitable.

[Via GamePolitics]

Wednesday, August 29, 2007

More Details on the Microsoft Machinima Rule

A Microsoft attorney who goes by DonkeyXote has posted a discussion of the Microsoft Content Usage Rules in his blog. Before reading my continued commentary on the issue, you should probably read his five clarification points.

The clarification process, I can only imagine, will continue for quite some time as new issues continue to pop up from the Machinima community. There are a couple issues that specifically need some attention in the near future.

1. The Universe Expansion Rule
I suppose the real question is how remote is remote enough to be allowed? While I can understand the point DonkeyXote makes in his post, it doesn't speak to the machinimist trying to develop his story. It was a point Laird and I specifically discussed in the recent podcast. For example, I'm certain making use of any of the game's characters is not allowed. But what about a story going on in the same timeframe in another part of the universe? What about a parallel universe? Do you need to re-name all of the character models? Speaking to a more practical level, is the Red vs. Blue storyline remote enough? Sponsors vs. Freeloaders? Halo Unyielding? It would be much easier on the community if a clear framework were applied to this rule.

2. Reverse Engineering/Modifying the Engine Rule
The rule itself is vague enough that "reverse engineering" could involve modifications made using, for example, the tools in Halo CE, Halo 2 Vista, or what appears to be in the Halo 3 Forge. While I would anticipate that this isn't "modifying" the engine, I think the community would feel more comfortable if Microsoft said that these things were allowed.

3. The Contest Rule
Are all contests disallowed? And if so, what is a "contest?" Is entering a video in the YouTube Debates a contest? You do have the basic elements of a "contest," but the prize has no monetary value. A clarification as to the term contest (for example, that it has to have a prize worth $XXX) would likely be quite helpful.


All in all, it is nice to see one of the drafters of the rule address the issue in his blog, and hopefully he will continue to field questions like these as they arise.

Monday, August 27, 2007

A Tale of Two Worlds: New U.S. Gambling Laws and the MMORPG

Back in late April I finished an article titled A Tale of Two Worlds: New U.S. Gambling Laws and the MMORPG. That article has been published in the now available August edition of the Gaming Law Review. I must admit that some of the substantive MMORPG analysis is a bit simplistic (mostly in defining the volume of real money transactions as they relate to World of Warcraft), in part due to to audience considerations, but the legal analysis is quite thorough. While my SSRN revisions are still under review, the paper is available to those who may have access to the journal through academia or other means.

For those interested, here is the reference information:

A Tale of Two Worlds: New U.S. Gambling Laws and the MMORPG
Mark Methenitis
Gaming Law Review. Aug 2007, Vol. 11, No. 4: 436-439

Abstract

Full Citation:
Mark Methenitis. Gaming Law Review. 2007, 11(4): 436-439. doi:10.1089/glr.2007.11404.

Gaming Law Review, Volume 11, Number 4


[UPDATE: Just to clarify, the simplification was in the following regard: I assumed, for the purpose of the paper, that Blizzard's ban on real money transactions was completely effective, rather than just mostly effective. The concept of the "black market" complicated the comparison to a high degree and would have easily doubled the length of the paper. It also plays to a greater assumption that Blizzard will, in all likelyhood, continue to crack down and may eventually wholly eliminate real money transactions, even those on the "black market" type level.]

Wednesday, August 22, 2007

HR1201: Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (The Modchip Law)

A good friend of mine has been following the mod chip issue, and reminded me of a bill that I thought had died in Congress. In reality, the Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (HR 1201 in the 110th Congress) is in committee. Why is this bill important? It would soften many of the copyright restrictions faced in the electronics world, most notably, it would seemingly take mod chips out of the Digital Millennium Copyright Act's jurisdiction.

There is one important part of this bill.

"(g) Certain Hardware Devices- No person shall be liable for copyright infringement based on the design, manufacture, or distribution of a hardware device or of a component of the device if the device is capable of substantial, commercially significant noninfringing use."

A mod chip would seem to fall into this exception, since, as noted previously, there are noninfringing uses for mod chips. Whether homebrew software and region unlocking, among other uses, are "substantial" and "commercially significant" remains to be seen. However, if this bill passes, then it will undoubtedly be tested in that regard.

Also worth noting was the previous list of allowed uses of circumvention technology, found here. It would seem some in the gaming community have presented game related exemptions, but the proposals have all been denied (see the rejected proposals at the bottom of the document). It would seem that if the relevant game consumer groups can get valid proposals with adequate evidence before the next decision is made, then perhaps circumvention for the purpose of region unlocking may be added to the list. It is at least a possibility.

[Thanks Geonex88]

Microsoft Machinima Rule Podcast

Last evening, I was invited onto a podcast to discuss Law of the Game and the new Microsoft Machinima Rule. The podcast is ClassyDude's Emporium of Chat, found here.

The podcast's description is here, and a direct download of the episode is here. It's also a news item on Halo.Bungie.Org.

I'd also like to offer one clarification. Toward the end of the podcast, the topic of receiving a letter from Microsoft came up. I think I could have more clearly explained that the person you are being contacted by is probably a lawyer, and having your own representation is highly advisable in regard to contacting Microsoft about any letter they send you. However, if you cannot afford a lawyer, you can choose to contact them yourself, but be aware you are talking to Microsoft (and probably a lawyer) and that you should be apologetic and polite without incriminating yourself.

Anyway, the podcast is a bit lengthy, but if the Microsoft Machinima Rules are of interest to you, then I think you'll enjoy it.

Tuesday, August 21, 2007

New Microsoft Machinima Rules Revisited

As I've been monitoring the reaction to the new machinima rules Microsoft put out last week, I'm seeing far more negative doom and gloom reactions than I had anticipated. As such, I thought it might be an opportune time to address a few of the more common reactions I've seen to hopefully put the rules in perspective.

1. It was legal before, and now they're punishing us?

Surprisingly enough, what you were doing before was actually illegal. Specifically, it was copyright infringement. This isn't nearly as nebulous as re-skinning an engine, an issue I plan to go further into in the third part of my copyright discussion. You are using the game, exactly as it was, to create a new work. This new work is a derivative work, and creating a derivative work without a license is, in fact, copyright infringement. Microsoft was simply not enforcing their rights to that point in most cases. Simply because something happened does not mean it was legal.

2. This is the end of machinima.

This is by no means the end of machinima. In fact, it makes the whole operation far more clear cut for people who use those Microsoft games in their series. It just means that more creativity will have to go into the series to avoid the "expanding the universe" rule, and more audio production will be involved to make up for the sound effects. Moreover, these rules only apply to the Microsoft games on the list. If this is really an issue, use a different engine. Much like I noted in the SouthPaw Manifesto, if you don't like something, don't buy/use it. Of course, I think you will be hard pressed to find a game developer, at this point in time, who has said "Please use my game to make as many videos as you like, and feel free to profit on them as much as you can."


3. No wonder Rooster Teeth ended Red vs. Blue. They must have had advance notice!

I really can't speak to whether Burnie and crew had advance notice, but I am fairly certain Rooster Teeth has a commercial license. You might have noticed a little one sentence reference to "commercial license" in the guidelines. A license like this will give you the freedom to do whatever you like within the scope of that license. However, there are two caveats: 1. You have
to get a commercial license for your production group; and 2. Microsoft doesn't exactly hand them out like candy. In fact, the only license that has been granted which I know of is the Rooster Teeth license. This does not mean that other licenses won't be granted, but they are not a simple thing to get your hands on. So, if you think you can get one, you need to ask Microsoft, and then negotiate the terms accordingly. Otherwise, you need to follow the new rules.

4. It is impossible to produce anything under these rules, especially without accepting donations.

If this were 2003, I would probably agree with you that the donation requirement essentially negates the concept of online machinima as the distribution costs will likely bankrupt you. However, YouTube at least makes it possible to get your content out there. I think many machinimators need to ask themselves: Am I in this to produce something, or am I in this for the money? If you really want to get your material out there, it can certainly be done. Yes, you have to pony up the money for the hard materials of your hobby: PC upgrades, games, systems. However, the distribution can now be done for free. And the fan community? Free message boards are a dime a dozen.

If you can produce something truly great, the rest will fall into place. I would imagine if Microsoft found some starving machinimist who had a brilliant series running on YouTube or GameTrailers or some other free site, they would be far more likely to grant a commercial license based on the existing content than they would be to just another face in the crowd. Actors, musicians, writers, and other artists don't just become instantly wealthy. They have to work at their art. Just keep that in mind as you're working on your next project, without the donations.

5. This is a huge step backward for machinima.

Actually, this is just the opposite. A game company is finally saying "You can make machinima. You just have to follow some rules." Most developers have remained totally silent on the issue, and there may come a time when they choose to respond with a lawsuit rather than the conditional permission Microsoft chose.



So, the big M has spoken, and the world hasn't ended. Machinima still exists, it's just not as straightforward as it was when it wasn't legal. And once everyone has time to adjust, I'm sure we'll see some great new work. For those of you who had a series that violated the rules, I'm sorry you had to kill off your project. But look at this as an opportunity to make your own work even better, not as a big corporation squashing your dream. In the end, compromises like this are more than likely going to be the future of the medium. I'm personally glad they didn't decide to end machinima with their games altogether.

Wednesday, August 15, 2007

The Southpaw Manifesto

It is time once again to take a brief aside from the legal commentary to address an issue that I believe needs addressing, that issue being customizable controls. Specifically, I'm speaking to the ongoing issue of the use of thumbsticks in First Person Shooter titles. Before getting into my "manifesto," a little background.

I, like many other gamers, logged an untold number of hours in Goldeneye 007 on the Nintendo 64, and I, like many others, found it far easier to aim with the only analog stick on the N64 controller, which was used with your left hand. Perhaps it was from the years of using my left hand to control the D-Pad or perhaps it was just easier to aim with an analog stick. As time passed and the dual analog stick controller was released, these hours of play translated to what is known as the "southpaw" control style, where the left stick looks and the right stick moves the player. I've tried to play with both the "standard" and the "legacy" styles, but neither feel as natural. In fact, my reflexes default to southpaw, even though I'm right handed. It's just how I play.

It is unfortunate, then, when a AAA title is released with no southpaw support. Most notably, I'm looking at Ghost Recon: Advanced Warfighter and now, BioShock and Stranglehold. Given that this control style (if not complete customization) is offered by other titles, I see no reason for a developer to leave it out. I greatly appreciate companies like id, Epic, Bungie, Free Radical, Insomniac, Rare, and many others for including the southpaw option in most, if not all, of their games. For others who play as I do, ALT + CNTRL + GMR has lists for both 360 and PS3 control availability.

With that in mind, I give you the Southpaw Manifesto (which can also be adopted by any other alternative control users).



The SouthPaw Manifesto

Be it known that there are gamers who do not use the default control stick layout for First Person Shooter games, and as such, will not play those games which cannot be controlled as we desire. In this day and age, it is not asking much to include the most common alternative thumbstick layouts in a console first person shooter title. These layouts have existed for years, and have been implemented by the overwhelming majority of titles. As such, we, the users of different control styles, state the following:

We will not purchase a title which does not have our control style available. We will not purchase games with the mere promise of a patch to address the issue.

We will not "learn" another control style. No developer has taken a racing game, made the right stick steer, and told the public to "learn" that control style.

We welcome games that take a wholly different approach, such as the Metroid Prime series and Resident Evil 4. We have no issue with games taking new approaches to controlling altogether.

We acknowledge that a lot of hard work goes into making the games we love, and we appreciate the developers for their work. However, we don't feel that we're asking much to be able to experience the game in the way we are most comfortable.

We want to play and enjoy your games, so please include the normal alternative control styles.

Tuesday, August 14, 2007

Microsoft's New Content Usage Rules: A Small Step for Machinima

Microsoft has set forth an interesting new content policy, found here, that seems to be giving the non-profit machinimist a break. In fact, I would go as far as to say this is really what needed to be done, but only addresses half of the issue.

The rules boil down to this: You can use the following games:
-Age of Empires (all versions)
-Flight Simulator (all versions)
-Forza Motorsport (all versions)
-Halo: Combat Evolved, Halo 2, and Halo 3 (when released)
-Kameo
-Perfect Dark Zero
-Project Gotham Racing (all versions)
-Rise of Nations (all versions)
-Shadowrun
-Viva PiƱata

to make machinima, provided you put the following disclaimer on it:

[The title of your Item] was created under Microsoft’s “Game Content Usage Rules” using assets from GAMENAME, © Microsoft Corporation.

AND it follows these rules:


"1. You can’t reverse engineer our games to access the assets or otherwise do things that the games don’t normally permit in order to create your Items.
2. You can’t use Game Content to create pornographic or obscene Items, or anything that contains vulgar, racist, hateful, or otherwise objectionable content.
3. You can’t sell or otherwise earn anything from your Items. We will let you have advertising on the page with the Item on it, but that’s it. That means you can’t sell it, post it on a site that requires subscription or other fees, solicit donations of any kind (even by PayPal), use it to enter a contest or sweepstakes, or post it on a page you use to sell other items (even if those other items have nothing to do with Game Content or Microsoft).
4. You can’t use the soundtracks or audio effects from the original game. We often license those from third parties and don’t have the rights to pass them on to you.
5. You can’t infringe anyone’s IP rights in your Item, even if the IP rights being infringed don’t belong to Microsoft. Among other things that means you can’t use any of Microsoft’s trademarked logos or names except in the ways described in the pages linked from www.microsoft.com/trademarks.
6. You can’t add to the game universe or expand on the story told in the game with “lost chapters” or back story or anything like that.
7. You can’t grant anyone the right to build on your creations. We don’t mind if other people help you out, but you have to be clear with them that it’s not you giving permission, it’s us. (That’s how we make sure everyone plays by the same rules.)
"

Consider these the 7 Deadly Sins of Microsoft Machinima. In short, they are:
1. Hacking
2. Obscenity
3. Profit
4. Audio
5. Other IP
6. Fanfiction
7. Piggybacking

Presuming you play by these rules, Microsoft will leave you alone. There are, of course, still a few particular issues with this scheme.

1. You essentially have to overwrite the entire audio track. While this is understandable to the extent of background music, many machinimists do use the sound effects. Moreover, dedicated players will know that the effect is different for, say, the ghost in Halo. I estimate that many people may hear from Microsoft on the sound effect issue, if the plan to enforce it.
2. Of course, you're not allowed to make any money, at all, whatsoever. Since many machinimists do have a "donate via paypal" link on their site, the link will need to be removed to comply with the new rules.
3. There's also no stated method for contact for obtaining a commercial license, although they do mention the commercial license. I assume this means that still, for the most part, the answer is "no" on that particular front, unless you happen to be Rooster Teeth Productions.

All in all, I think this is a good move for Microsoft and it would not surprise me to see other companies follow suit. This license generates a positive reaction from the fans and really doesn't hurt the owner of the IP license. Additionally, it retains control over the assets, so issues of the items becoming "public domain" due to use by the consumer should be mitigated. It, unfortunately, doesn't really offer anything for the aspiring professional machinimist.

[Thanks to Overman for the tip.]

Thursday, August 9, 2007

Mod Chip Raids: What Happens Now?

In the wake of the ongoing mod chip raids, I'm sure many people are wondering what happens next. So, whether you've been raided or are just casually following the story with an air of curiosity, here is a general overview of what can happen after the Immigrations and Customs Enforcement raids are completed. Of course, there can by any amount of time lag between these steps, and they can also occur in multiple different orders. In fact, some of these events can span years. Consider the following a general outline of the process that changes in actual application to most situations.

Phase I: Raid Aftermath
1. There is a raid, items are seized.
2. The seized items end up in a warehouse somewhere.
3. The ICE agents, along with the investigators and often the company who requested ICE enforcement examine the items and analyze their course of action. (In this case, it would seem that Microsoft, Sony, and/or Nintendo requested the raids since the mod chips theoretically affect their rights. Based on the press release, the ESA was also involved.)
4. This is the point in the process where there is typically the longest delay, while everyone analyzes their course of action. This would also be the ideal time for someone who was raided to retain counsel, before anything gets worse.
5. At this point, it is typically just an investigation, and no one has been charged or sued for anything yet.

Phase II: Initial Actions
1. During this phase, if someone is going to be released for lack of evidence or error, this is the most likely time. However, this may take some negotiations or arguments to get off free and clear, so to speak. If the party is released, the seized property should be returned in a reasonable amount of time.
2. The companies and/or the government may wish to enter negotiations for settlement.
3. The companies and/or the government may file initial temporary restraining orders or injunctions on those who were raided in order to prevent further activities.
4. The government may begin freezing assets or have warrants issued on future shipments.
5. During this phase, representation by counsel is probably the most important because it is still theoretically possible to avoid Phases III-V.

Phase III: Legal Action
1. The government may proceed with criminal charges, which can result in jail sentences and/or fines and/or forfeiture of seized property.
2. The companies may initiate a civil suit over the rights of theirs which were violated. This can result in monetary damages, permanent injunctions and/or restraining orders.
3. Counsel is necessary at this point. A public defender can be appointed for the criminal trial if the defendant cannot afford counsel.

Phase IV: Legal Outcome
1. If the defendant loses either of the above actions, the penalty will be assessed.
2. If the defendant wins, the property should be returned and the defendant can walk away free and clear.

Phase V: Counter Suit
It is possible for the defendant to counter sue on the civil matter, be that for defamation, anti-trust, or simple damages (this depends on the particular case). The government, however, is immune from suits of this nature in these circumstances.

Phase VI: Future Raids
What is important to remember is that a victory in this raid does not necessarily provide any protection from future raids. ICE may be back a year from now or ten years from now, and the particulars from this raid do not impact that future raid.


That is a basic outline of the process, and it is one that occurs in many industries frequently. While I personally still find it puzzling that the raids were on mod chip sellers rather than sellers of pirated games, as discussed in my prior post, the overall process should still reflect this outline. It is, unfortunately, a long, hard road after being raided by ICE.

Epic v. Silicon Knights: The Countersuit

It was likely inevitable that Epic would launch a stout countersuit of Silicon Knights with regard to the Unreal 3 Engine issue. GameDaily.biz is reporting that such a suit has been filed, and makes a number of references to the text of the suit and the motion to dismiss Silicon Knight's suit without posting the entire text publicly.

This is, however, also pretty common in the legal world, just as Silicon Knight's original claim is relatively common in the realm outside the game industry. From what I have read, Epic is counter-claiming that Silicon Knights has has everything to gain from seeing the Unreal 3 code, and moving to dismiss based on their assertion that they wanted Silicon Knights to succeed as that would lead to greater income for Epic. This first issue touches on one of the most complex issues in the industry, whereas the second seems mildly flawed.

The first issue is about code, and it exceptionally complex. Code can be copyrighted, and it can also be patented (sometimes), and it can be protected by trade secret provisions. Much of this will come down to comparing the Unreal 3 and Silicon Knights engines, and the analysis will certainly be complex. In fact, it's so complex I'm not sure I can adequately explain it in the blog. To far over-simplify the matter, depending on how it is protected, different aspects of the engine are protected (the code itself, the idea of the code, the specific method, etc.), and the comparison will determine if Silicon Knights gained an unfair advantage by seeing the Unreal 3 code.

The motion to dismiss claims that Epic would profit from Silicon Knight's success, which is true. However, there is a fault with the argument. Epic would probably always profit more from selling their own game (Gears of War) than the small royalty/license fee they would get from any Silicon Knights project. Moreover, if you imagine that the game buying public can only expend X dollars per season, having titles that all profit Epic compete is bad for business. This is a little complicated as an example, so bear with me.

Say in Universe A, Gears of War and Too Human were both out last holiday season.
Say the average 360 owner can afford 2 titles for the holidays, and that both Gears and TH scored a respectable review of 9.5.
Many people will buy one, or the other, but not both. Why? There are many, many other games available.

Say in Universe B, Gears came out last year and TH was pushed to, say, June.
Say the average 360 owner can afford 2 titles at the holidays, and one more by June.
Many people will get both (especially given the summer drought), and Epic will likely see more total income as they are not having two Unreal 3 products in the market launching at the same time.

It's not an all-encompassing example, but it shows the basic element of the flaw. Competing against yourself isn't good for business.

Also remember that this case could end up with rulings for both parties, which typically offset each other to some extent. They may both owe each other money when the judge hits the gavel the last time. It will certainly be interesting to see who walks away with what as a result of the suit. There's also a distinct possibility of a settlement, as most cases never actually make it to trial. We will have to wait and see what Silicon Knight's next move is in this legal battle.

Tuesday, August 7, 2007

Second Life Bans Gambling...Sort Of

As I continue to play catch up from my hiatus, I have been hit by a bit of an irony. During my time away, I did submit the finalized version of "A Tale of Two Worlds: New US Gambling Laws and the MMORPG," which will be appearing in this month's Gaming Law Review. Of course, a mere few days later, Virtually Blind reports that Second Life has issued a clear "ban" on in game gambling, making some of the examples I used in the paper moot.

While I do agree with Virtually Blind's Benjamin Duranske that the revised policy statement is far clearer than the previous, I can't go as far as to call this a true "ban." The revised statement leaves many loopholes that I'm certain will be exploited in the days, weeks, and months to come. The policy states that games cannot "(1)(a) rely on chance or random number generation to determine a winner, OR (b) rely on the outcome of real-life organized sporting events, AND (2) provide a payout in (a) Linden Dollars, OR (b) any real-world currency or thing of value."

First, the statement really makes no claims at all with respect to games of skill. In fact, Second Life poker wouldn't violate this policy under many interpretations of "relying on chance." Whether it would be interpreted this way under the UIGEA is an entirely different debate (without an answer at this point), but more than likely poker would not violate the Second Life policy. The same could be said for any other game of skill that could be integrated into the grid. I suspect it will only be a matter of time before someone builds a Quake Zero betting system that plays through Second Life.

The second loophole is actually one that was mentioned in the article, being that only betting on the outcome of "real-life organized sporting events" is banned. Thus, if your event is either not real life, not organized, or not a sporting event, it is excluded. Virtually Blind mentioned the Oscars or Survivor (although Big Brother would be more timely at the moment). But there are a large number of other excluded events. MMO-based sporting events (in Second Life, World of Warcraft or elsewhere) would not be "real-life" events, so they would be excluded. This means that theoretically you could bet on PvP matches. The definition of "organized" will likely be pushed, probably in drawing a line between "professional" or "league" play. However, the most critical designation may be "sporting." What is defined as a sport? Is Major League Gaming a sport? I know of people who would argue on both sides of that debate. This restriction is by no means as comprehensive as it appears.

Perhaps the biggest loophole is in the "payout in (a) Linden Dollars, OR (b) any real-world currency or thing of value" clause. First, as Virtually Blind points out, the phrasing doesn't seem to restrict gambling in virtual items "of value." This, taken broadly, means that a simple casino chip system implemented in Second Life could circumvent the restriction. The only restrictions are on betting with Linden Dollars or real world currency or items of value. Thus, any virtual good that can be bought, gambled with, and resold for value would not be included. While actual chips might be argued to be the equivalent of currency, a system that operates in a similar manner without using chips may skirt the rules. Moreover, as Play No Evil's Steven Davis points out in comment 1, the use of a pachinko style system would skirt the restriction. For those unfamiliar with Japanese gambling, pachinko is a game in which you play with, earn or lose metal ball bearings. Having played the game while in Japan, it's much like a cross between a slot machine, a pinball machine, and a video game. These ball bearings can be redeemed for prizes. Among the prizes are a tokens that are, in the parlor, worthless, but if you take them to a booth nearby, they can be exchanged for cash. A similar model could be employed in Second Life as a means to bypass this policy.

While this new policy does help in some respects, it is still probably inadequate to deflect the pressures the UIGEA is placing on the system. Whether these loopholes were intentional or the result of an oversight will not impact the government's investigation, which seems to be an inevitability at this point.

Monday, August 6, 2007

California Game Law: Unconsitutional

Full opinion available here.

As could have been predicted based on other verdicts, the California game legislation has been struck down, in whole. While the court never reached the labeling requirement, it struck down the act as a whole under a strict scrutiny test. For those not familiar, strict scrutiny requires that a government use the least restrictive means of accomplishing their goal, narrowly tailor their legislation to the issue, and have a compelling government interest in the regulation. The court commented on two of these elements.

On having a compelling interest, the court stated:
Although Judge Posner's comments emphasize the need to proceed carefully in restricting a minor's exposure to violence, the Act nevertheless passes the first requirement of strict scrutiny as the government has a compelling interest in protecting the physical and psychological well-being of minors. The state can legitimately restrict speech if such a restriction is narrowly tailored and will prevent or significantly decrease the likelihood of antisocial and aggressive behavior in minors—not merely how a minor thinks of violence.


On least restrictive means, the court stated:
To pass the strict scrutiny test, therefore, the state must demonstrate that the industry labeling standards, either alone or combined with technological controls that enable parents to limit which games their children play, do not equally address the state's interest in protecting the physical and psychological well-being of children.

In conclusion, the court states:
The legislature does have the power, despite Brandenburg, to enact legislation that limits a minor's First Amendment rights if the legislation can be shown to truly protects a minor's psychological and physical well-being and is narrowly drafted to pass strict scrutiny. However, at this point, there has been no showing that violent video games as defined in the Act, in the absence of other violent media, cause injury to children. In addition, the evidence does not establish that video games, because of their interactive nature or otherwise, are any more harmful than violent television, movies, internet sites or other speech-related exposures. Although some reputable professional individuals and organizations have expressed particular concern about the interactive nature of video games, there is no generally-accepted study that supports that concern. There has also been no detailed study to differentiate between the effects of violent videos on minors of different ages.

What does this all mean? The issue is twofold. First, the court finds that the labeling requirement may not actually achieve the goals set forth by the government. Second, the court finds that there is not substantial and compelling evidence that games really influence minors independently of other entertainment media.

I imagine the most compelling question left is whether the New York legislature will abandon the issue in the wake of yet another video game regulation being struck down. While the California case wouldn't be binding on New York in its current state, it still seems likely that a similar result would be reached.

[Via GamePolitics]

Friday, August 3, 2007

The Resident Evil 5 Racism Issue

I had rather hoped that this story would not become the darling of the gaming blog universe, but much to my disappointment, it has become "big news." And so I feel, at this point, that I need to don my editorial hat once again.

To summarize the series of events so far, for those who haven't been keeping up:
The Resident Evil 5 trailer was released at E3, and it depicts the new game taking place in a locale where the residents have a dark complection, which may be Africa or some part of the Caribbean, and based additionally on the background scenery, it appears to be somewhere hot and relatively arid. Fast forward from E3 to two days ago when the Black Looks blog complains of "racism," additionally pointing the game as "being marketed toward children." At which time the story is picked up by most of the gaming blog-o-sphere, and the typical mix of rash, crude remarks and intelligent commentary ensue. From there, a number of blogs "respond" to the response, with such responses appearing here, here, and here, many of which have chosen to take cheap shots at the gaming community as a whole. I can only imagine if things continue at this pace, the mainstream media and the politicos who love cheap shots will be on board shortly.

Before I begin, I want everyone on both sides of this debate to stop, take a deep breath, and at least try to think about this rationally.

First, this video is a trailer. Would you deride a movie based on its trailer? Would you lambaste a book based on the summary on the back cover? Would you demand action against a CD if you heard 4 words from 4 tracks strung together in a random order? Of course not. Attacking an incomplete game based on a promotional trailer that shows a disjointed pseudo-summary of elements of the plot shows nothing but a true and complete ignorance of the medium. It is the very same level of ignorance that fuels the racism you detest.

Moreover, the categorical stereotyping of the gaming community is more akin to racism than you would like to accept. If I said that all African Americans were drug dealing thugs who shot people, you would be offended, correct? That is no different than claiming the gaming community is all young, immature, uneducated white males or saying things like "Many of these folks seem like the type who would try to reenact scenes from Resident Evil 5. Can you say Columbine?" Gamers span the gamut from every age, race, religion, nationality, education level, and profession. I am well past my "teen" years and have two graduate degrees. According to your stereotype, I should be the last person playing video games or involving myself in this debate. This fundamental misunderstanding of the gaming community and the gaming culture may also be the groundwork for the repeated, ill-conceived attempts at regulating the industry.

As has been pointed out many, many times, the Resident Evil series is part of the larger zombie genre, in which the zombies are typically white. Resident Evil 4 took the traditional zombie concept in a new direction by crafting a storyline where the traditional "zombie" was replaced by a faster, smarter zombie-like infected human. That game was set in Spain, and all of the enemies spoke Spanish. The driver behind their language and appearance was the setting, not a secret racist agenda. In fact, I can imagine that is Resident Evil 6 were set in India, the zombies would be Indian, or in China the zombies would be Chinese, or in Iran the zombies would be Persian. It is a function of setting, not of ulterior motives. And as has been further mentioned, the Resident Evil 5 development team is Japanese, not American, and their cultural sensitivities
are tuned to far different issues than ours.

Finally, there is still the issue of free speech. Short of inciting a riot, the content of the game cannot be restricted other than by virtue of the ratings system. Except for the absurdist reference to Columbine, which was obviously used for shock value, no one has alleged that this sort of harm will occur. Many works are published in many mediums every year which are far more damaging, but have drawn far less ire. Video games are just a target of convenience. In fact, the depiction of other races in certain games has been, arguably, as bad as or worse than the racist interpretation of the RE5 trailer, and yet there was no public outcry. Racially based gangs have appeared in dozens of games, depicting Hispanics and Asians and various Eurpoean nationalities as nothing but violent criminals. However, as works of fiction, albeit in a new medium, they are protected by the First Amendment.

I would like to close by quoting Justice Harlan. "Our Constitution is color-blind, and neither knows nor tolerates classes among citizens. " The more we draw lines among ourselves, the further we move from being a colorblind society. I can only continue to hope that people will realize that if they desire socio-political change, attacking the game industry is likely the least effective way to accomplish their goals. In fact, it will only serve to alienate an ever growing, immensely diverse group of voters.

[Via Game Politics]
[Via Joystiq]
[Via Kotaku]

Wednesday, August 1, 2007

Customs Raids Mod Chip Makers

According to a news release issues today, ICE (Immigration and Customs Enforcement) has executed warrants related to the manufacture of mod chips that are designed to "allow users to play illegally obtained, pirated and/or counterfeit software on video game consoles including Sony's Playstation 2, Microsoft's XBOX and XBOX 360, and Nintendo's Wii." A gallery of the seized chips can be found here.

As many may know, mod chips that allow users to circumvent the anti-piracy technology in consoles are covered by the anti-circumvention provisions of the Digital Millennium Copyright Act, while a small exemption was allowed for libraries for archival purposes.

The mod chip issue has always been a rather tricky one. On the one hand, mod chips created for the express and limited purpose of circumventing copy protection shouldn't be allowed on the market. When a product has no legal purpose, that is generally the case. On the other hand, there are plenty of legitimate uses for mod chips, and to that end, the ones designed for those purposes, be that homebrew software or improved media capabilities, should be allowed to exist in the stream of commerce. Think of a mod chip like a knife. A knife can be used for the legitimate purpose of cutting open a box or chopping a vegetable, but it can also be used for the illegitimate purpose of stabbing an innocent person. Perhaps the better approach is to target the software pirates rather than the mod chip manufacturers, but by and large, the mod chip makers are probably easier to find.

It will be interesting to see which direction this ongoing "investigation" moves. I can only hope that ICE does not inadvertently harm those who were not participating in targeted software protection circumvention. It seems that the case with some technology related seizures is a lack of understanding of the technology leading to a less than accurate application of the law.