Thursday, January 24, 2008

Epic vs. Skilcon Knights: The Saga Continues

When last we left our heroes, Silicon Knights ("SK") and Epic, the motion to dismiss had been denied and discovery was on the horizon. Shacknews is reporting that a number of Unreal 3 licensees have been subpoenaed with respect to their license agreements. This is an interesting move that could turn the tide of battle.

Since the facts are widely being reported, I thought I would attempt to offer a little insight on the possible strategy behind this move. Of course, I'm not privy to any actual inside information, so this is all speculative. SK's theory seems to be proving a systematic lack of support of the Unreal 3 licensee while Epic developed Gears of War, including specific failures with respect to promises in the agreement.

So, here we have SK requesting the license agreements used with other developers. SK, I assume, is hoping for one of a few possible positive outcomes for them:
1. The other contracts lack the promises that SK is claiming, which can be argued that Epic therefore never intended to keep with respect to SK.
2. The other contracts are identical, and the other developers received the same support that SK did, showing a pattern of failure.
3. The other contracts are identical, and other developers received more than SK did, showing that SK was in fact neglected in terms of support.
4. The other contracts contain the same promises on a different timeline, evidencing that SK's contract was perhaps entered into improperly.
5. The contracts and support were identical, and other developers are in the same position, showing a pattern that the level of support has held back development universally.

Generally speaking, no matter how the contracts are similar or different, SK's counsel should be able to make an argument to support their case based on the contracts. Of course, on the flip side, Epic has a few possible arguments of their own:
1. If the contracts and support were identical and other developers made more progress, then Epic can argue that SK lacked the resources or know-how to make use of the engine.
2. If the contracts show a changing timeline over time, it could be argued that certain delays gave Epic a better idea of a realistic delivery date as time went on (and, assuming that the other contracts had provisions for reasonable delays, this could show SK hasn't been patient enough).
3. If the contracts were the same and support for SK was greater than other developers, with other developers making similar or more progress on their projects than SK on Too Human, it could again be argued that the issue was on SK's end.

There are many permutations of these arguments, but that should provide a pretty good idea of the possible result of these other contracts entering the record. Of course, I would still like to see the contracts to be able to weigh in more thoroughly, but as other sources have pointed out, it is likely those records will be sealed before anyone outside the case gets to review the documents.

[Via Joystiq]

Wednesday, January 16, 2008

Big Announcement

A few weeks ago, I mentioned that a "big announcement" was coming, and the day is finally here.

Law of the Game now has a weekly column on Joystiq, and today is the first column.

Check out Law of the Game on Joystiq: Crossover Contracts.

Check back on Joystiq next Wednesday for the next Law of the Game on Joystiq.

Incidentally, I was also quoted in this recent story on Joystiq about the Goschy "I Invented the Wii" news story.

Monday, January 14, 2008

Best Buy Video Game Ratings Shenanigans

An interesting anecdote has appeared on the Consumerist blog. To summarize the story, a 21 year old went to a local Best Buy to purchase a copy of Assassin's Creed (Rated M) and a Xbox Live Gold card. The protagonist of our story had his 15 year old brother in tow, as he was taking him to dinner. Upon getting to the counter, the clerk made a series of loud statements to everyone in line that he was "illegally purchasing a video game for a minor." After a string of banter, the 15 year old left the store, the patron waited in line again only to have the store refuse him yet again, this time on the half-baked theory that the gift cards were "stolen." Needless to say, the customer left the store, went to a different Best Buy, and purchased the game without an issue.

I must say this is one of the worst cases of store clerk vigilante-ism I've run across, and is disturbing on a number of levels. First and foremost, the rating system is voluntary. No state has yet passed any regulation barring the sale of any game to anyone that has withheld scrutiny in a court of law. To have clerks declaring random acts "illegal" on their own authority is disturbing, and the fact that the manager saw no reason to rectify the situation (or, for that matter, also bought into this arbitrary declaration of legality) speaks very poorly of the management of the store. More importantly, it may suggest that Best Buy's corporate policy may need to be revisited and revamped to have a clear, uniform policy in stores nationwide. Second, this particular anecdote rises past the level of restriction I've seen some store clerks operate under with regard to alcohol and tobacco. Should a law ever be passed, it raises serious concern that minors won't even be allowed in the store, which would essentially end the sale of M rated games entirely. Third, it's further discrimination against the medium. Would this clerk have even blinked if it were an R rated movie rather than an M rated game? I somehow doubt it.

While I'm sure this anecdote will make a certain attorney happy, the rest of the gaming community should keep a vigilant eye out to prevent these kinds of problems from being widespread. Moreover, when issues such as these are made public, the corporate offices of the retain store should be made keenly aware that it will cost them sales if they allow their store clerks to harass paying customers.

Monday, January 7, 2008

The Xbox Live Class Action

As noted on GameSpot, a number of Texas residents have sued over the Xbox Live holiday outage, for which Microsoft previously apologized and will be offering a free game. The suit apparently asks some $5 million in damages, based on a breach of contract for the service. I have a few thoughts on the matter, which are entirely thoughts and not legal advice (in case anyone is inclined to take them in an improper context).

1. A subscription to Xbox Live, annually, is $50. For 3 months, the going rate is $20, and for a month it's $8. So, the actual value of a month of Xbox Live is somewhere between $8 and $4.17 or so. The service has been down, or at least been acting in a less than satisfactory manner for approximately one month or less.

2. Microsoft has noted, and will be offering, a free live arcade game of some sort to all paying Live members. Assuming the game isn't one everyone has already purchased, or there are multiple options or the like, then the approximate value of the replacement game should be about the same as the loss experienced by the Live users.

3. More importantly, as this is supposedly a breach of contract action, upon review of the Xbox Live Terms of Use, the basic contract that governs Xbox Live, there's not an action to be had on the terms of the agreement if Xbox Live goes down. To quote the agreement:

We provide the Service "as-is," "with all faults" and "as available." The Microsoft Parties give no express warranties, guarantees or conditions. You may have additional consumer rights under your local laws that this contract cannot change. To the extent permitted by law, we exclude the implied warranties of merchantability, fitness for a particular purpose, workmanlike effort and non-infringement.

You can recover from the Microsoft Parties only direct damages up to an amount equal to your Service fee for one month. You cannot recover any other damages, including consequential, lost profits, special, indirect or incidental damages.
This limitation applies to:
-any matter related to the Service,
-any matter related to content (including code) on third party Internet sites, third party programs or third party conduct,
-any matter related to viruses or other disabling features that affect your access to or use of the Service,
-any matter related to incompatibility between the Service and other services, software and hardware,
-any matter related to delays or failures you may have in initiating, conducting or completing any transmissions or transactions in connection with the Service in an accurate or timely manner, and
-claims for breach of contract, breach of warranty, guarantee or condition, strict liability, negligence, or other tort to the extent permitted by applicable law.
It also applies even if:
-this remedy does not fully compensate you for any losses, or fails of its essential purpose; or
-Microsoft knew or should have known about the possibility of damages.
Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you. They also may not apply to you because your province or country may not allow the exclusion or limitation of incidental, consequential or other damages.
In short, the service is provided "as-is," and any damages are limited to the value of one month of service. Whether a court will allow payment in the form of, say, additional time on Xbox Live or a free game is yet to be seen, but I would imagine that, given the low per user amount involved, Microsoft's remedy would likely be adequate, especially since the outage was not 100% over the time claimed and not too terribly extensive in the grand scheme of things.

This is by no means to say the suit is doomed or without merit. There are a number of possible interpretations under which the plaintiffs could succeed, but in general, this seems similar to so many of the other suits levied against the house that Gates built: mostly for profit or for principle.

[Via Joystiq]

Wednesday, January 2, 2008

Virtual "Seizure" Has Actual Value

Let's say you have a Thunderfury, Blessed Blade of the Windseeker. And let's say you bought this item for $100 US. If Blizzard repossess this item (i.e. takes it from your inventory), does this cause you an actual financial loss? Or, in the alternative, let's say you manage to somehow get an Ashbringer (despite theoretical impossibility, it happens), do you have a monetary loss if Blizzard takes it, merely because you could have sold it for $1,000 US?

According to a story from Pacific Epoch, it would seem that is the case in China. The jist of the story is that Shanda Interactive has been forced to apologize to a gamer and pay that gamer 5000 Yuan (just under $700 US) because they removed six virtual item from his account in the MMO The World of Legend. The items were removed pursuant to an investigation in stolen good sales in the game, and after police ordered Shanda to return the items post-investigation, Shanda failed to do so.

While I wouldn't go as far as to say this sets up a virtual "search and seizure" precedent, it does present a greater case for actual value of virtual goods. And while there's no such thing as "international precedent" that would bind courts in other countries to the decision, it does provide a perspective that US judges could look to when deciding their own virtual asset cases. It also seems to paint a further picture of inevitability to the idea of virtual assets being assigned value in the US officially by either the courts or the IRS, those being the two most likely to make the first statement in the arena.

[Via PlayNoEvil, Thanks Cameron]