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

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]

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.

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.]

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.