Abington May Sue Over Xbox Live Bannings

Joystiq reports that IP boutique Abington is considering a class action on behalf of Xbox Live subscribers banned recently from the service for using modded consoles. The firm alleges that the bans came as a money grabbing move timed after players would have purchased Halo 3:ODST and would have pre-ordered Modern Warfare 2. Mark Methenitis, over at Joystiq’s Law of the Game blog, astutely points out that this is probably a cash grab, but notes that there is a chance that there might be a kernel of legitimacy in the claim.  Let’s mark this one up in the “probably not going anywhere” category.

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Paltalk Sues Sony, NCsoft, ActiBlizz, Turbine, and Jagex for Patent Infringement

Boston.com (via Ars Technica) reports that Paltalk Holdings, (which patent-savvy readers may remember forced Microsoft to settle a patent lawsuit in 2006 over the Halo series), has launched another round of lawsuits for patent infringement, this time covering a bevy of top name MMOG producers. Naming Sony, NCsoft, Activision Blizzard, Turbine, and Jagex as defendants, the complaint alleges infringements of patents covering “sharing data between computers that are connected together so users see the same digital environment”. The patents were purchased in 2002 from a company called HearMe. Shadows of Worlds.com rising? Paltalk is alleging that any MMO game in which players “have to see the same environs simultaneously” would infringe the patent. More accurately, it seems from the Boston.com article that it involves the process for synchronization between the different player’s screens. Given that presumably Runescape (Jagex), World of Warcraft (Blizzard), and Guild Wars (NCsoft) all use different methods of communications and display, from instancing to open-world MMO, to server-side-only calculations, this seems like a stretch, but we’ll withhold judgment for now.

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Xbox Live Continues TOS Inspired Bans on Sexual Orientation

While state legislatures continue to wage the battle against violent games, Microsoft is continuing it’s battle with “offensive” users proclaiming their sexual orientation. The Xbox Live service has always taken censorship seriously, but it encountered stark criticism last year when it began to ban gamertags containing allegedly sexual explicit terms that were actual surnames of individuals that subscribed to its service. Now it appears that Live is using the same justification to ban users that have publicly identified themselves as homosexual while playing the game.

The gamer, identified as Teresa, listed her sexual orientation on her profile, and says that she began to receive threats and ridicule from other gamers while playing online. After filing her own complaint to Microsoft over the harassment she received, Microsoft promptly banned her gamertag accusing her of violating its terms by listing her sexual orientation and expressing it while using its service.

The specific clause in the terms of use, located here, states that your gamertag can be terminated if you violate their “code of conduct” by doing one of the following: 

• Creat[ing] a Gamertag, avatar or use text in other profile fields that may offend other members.This includes comments that look, sound like, stand for, hint at, abbreviate, or insinuate or relate to any of the following: profane words/phrases, topics or content of a sexual nature, hate speech (including but not limited to racial, ethnic, or religious slurs), illegal drugs/controlled substances, or illegal activities;

Whether someone’s sexual orientation can offend another in such a manner that the user should be banned under this contract clause is an interesting question. However, considering the relative cutthroat nature of Xbox Live in general, coupled with the fact that Microsoft released a game last year that contained a lesbian love scene, you have to wonder just how double sided Microsoft’s position is on this issue.

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Job Cuts Megapost: EA, Microsoft, Sony

This post brought to you by the letter $, and the number (bottom line).

• In cost-cutting news today, EA announces the laying off of around 200 jobs, most of which are coming from Black Box (a studio of around 350 total.
• Microsoft cuts 5000 jobs in R&D, marketing, sales, finance, legal, HR, and IT. The cuts will be structured with 1,400 losses today and another 3,600 over the next 18 months. This follows today’s announcement of a 11 percent drop in fiscal second-quarter net income. Microsoft expects to chop its annual operating expenses by about $1.5 billion and slash fiscal year 2009 capital expenditures by $700 million. Hint to graduating 3L’s: Don’t look in-house at Microsoft. No future. No jobs. Die alone.
• Sony will accelerate cost cutting measures. Sony’s plan: Structurally reform the company’s core electronics operations to better compete with its best in class peers in terms of speed to market and profitability. Continue margin improvement activities to lessen the impact of the weak economic profile of key markets. Accelerate the integration between products and network services by leveraging the combined strengths of Sony’s electronics and computer entertainment operations. One would hope that the final step means that SCEA and SCEE should remain somewhat unscathed. Right?
• Nope! “Sony intends to accelerate these actions, and in addition, implement further initiatives which are being announced today. Through these measures, together with anticipated restructuring to be achieved within the game, music and pictures businesses, and significant cost reductions in advertising expenditures, general expenses, logistics and other expenses, Sony now anticipates that it will achieve group-wide cost reductions of 250 billion yen (compared to the current fiscal year ending March 31, 2009) in the fiscal year ending March 31, 2010.”
• How harsh is this restructuring going to be? “In the Game segment, operating income (loss) is expected to be lower by approximately ¥30 billion. Of this, approximately ¥15 billion is due to the impact of the appreciation of the yen and approximately ¥15 billion is due to lower-than-expected sales.” Kotaku has a good graphic on Sony’s financial woes.
• This is from an allegedly “recession proof” industry. Right. Tell that to the Skate 2 team.

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What’s Going On With Microsoft Job Cuts?

First Kotaku speculates that Microsoft is looking into cutting buildings and future development rather than people and jobs. Then, Microsoft cuts the Gamerscore blog. Now Reuter’s analysts are expecting that Microsoft is going to cut 6000-8000 out of 95,000 jobs in that particular department. And that may not be all — McAdams Wright Ragen analyst Sid Parakh revealed that sources inside Microsoft are talking about ” a second round of cuts in some groups sometime later in the year”.

What the hell is going on at Microsoft eh?

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LittleBigPlanet Censo….I Mean Moderation, Won’t Stop

In a blow to creativity, Sony has decided to continue their controversial yankings of “inappropriate” LittleBigPlanet levels. As you may know, LittleBigPlanet is an almost entirely user-content-created game. Sony is relying on the players to develop new content and levels, and exercise their creative spark — and to a large extent, players have done so,  creating calculators, complex machines, even recreating themes from other games.

The latter is where Sony seems to be coming down the hardest. According to Kotaku, Sony has laid down the following rules to avoid your content being moderated:

*Ensure that the content you share with other users is suitable for all ages – everybody has access to your level if you publish it
*Please respect other people’s intellectual property rights. For example, don’t use images, brands or logos that you’re not entitled to use.
*If you come across any content that you feel the need to report, then please do it responsibly. Hoax reports will be considered inappropriate behaviour.

Ironically, the blog that they post it on is named “three speech”. Sony’s argument against using others intellectual property is not as straightforward as it seems. For instance, according to their rules, players can use any images, brands, or logos that they are “entitled to use”. An entitlement to use would include things like fair use. However, Sony does not appear to be considering fair use whatsoever, and rather is just nuking any content, whether fair use or not.

It’s actually logical that Sony would do this, which is essentially arguing that fair use works are still infringements, the same argument advanced by their music industry brother, Universal. In contrast, Microsoft has embraced the usage of their products for things like machinima. Makes sense, since Microsoft actively courts the open-source community, who are notoriously touchy about fair use.

But even taking into consideration the argument of how corporate parents of how Sony and Microsoft’s console game divisions interact with their competitors, I think the explanation is much simpler. Sony just simply doesn’t understand online gamers. There’s so much to say on that topic that one could write a book, but suffice to say, Sony has not tailored their online experience in a way that is attractive to gamers, like Microsoft has with Live. Microsoft is what, days away from publishing the “New Live Experience”, to what appear to be initially positive reactions in the media, while Sony is STILL slaving away to get Home into a functional beta.  Microsoft has tons of interactivity and mashability with their Live account and Gamercard system. Sony?

*Crickets*

I think the censorship of LittleBigPlanet levels, while deplorable, is speaking to a greater problem that Sony has, and that’s their inability to succeed online. Feel free to comment, gripe, and complain on the comments.

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A procedural take on the Microsoft class action

For a class of plaintiffs commence a consumer class action in California, the named plaintiffs (those who will actually be in court litigating) must show that It is impracticable to bring all members of the class (those similarly situated–for example everyone who purchased an Xbox 360 in California and suffered a Red Ring of Death) before the court, that all members of the class share a substantially similar question law or fact, that the claims of the named plaintiffs are typical of the claims of the entire class, and that the named plaintiffs will fairly and adequately protect and represent the interests of that class.

It is surely safe to say that it would be impossible to haul everyone in California who was hit with a RROD into Sacremento County Superior Court–I can’t even begin to imagine the elbowing.  Furthermore, all of those people would need to show one thing in order to prevail–that did Microsoft intentionally conceal the 50% chance of a RROD in order to sell consoles. In this way, the claims of the named plaintiffs are the same as the claims all other members of the class would have. Lastly, an exhausted Boston student attorney such as myself can hardly vouch for the named plaintiffs’ fair representation of the class, but I can only assume they meet this requirement because there are no foreseeable conflicts of interest between the named plaintiffs and the rest of the class–they all want the same thing essentially.

The California courts were chosen as the forum rather than the federal courts because of the state’s extensive comsumer protection laws, which feed into the image of the state as sympathetic to those ordinary working Joes who were wronged by a big corporation. Microsoft could choose to remove the suit to the federal courts which may be less consumer plaintiff-friendly, but California law would probably still govern. (Maybe some day I will teach you all about the Erie Doctrine that lays down the rules for which law governs federal cases. Then again, maybe not.)

This action was brought under The Consumers Legal Remedies Act of California which expressly prohibits the following unfair practices relating to this case:
“Representing that goods or services have…characteristics…which they do not have”
“Representing that goods or services are of a particular standard, quality, or grade…if they are of another”
“Advertising goods or services with intent not to sell them as advertised”
“Advertising goods or services with intent not to supply reasonably expectable demand, unless the advertisement discloses a limitation of quantity” (Okay, so that one isn’t exactly relevant to THIS analysis but it still deserves to be mentioned *cough*.)

If the plaintiffs are successful, they may receive actual damages (cost of replacement or repair), injunctive relief against Microsoft preventing them from engaging in such acts in the future, restitution of property, punitive damages, or any other remedy the court finds just and proper. The harms alleged in this case probably do not rise to the gross misconduct needed for a court to award punitive damages, and it does not appear that the plaintiffs are asking for such. Should the plaintiffs win, they will also be awarded the cost of legal fees automatically, whereas if Microsoft wins they will only receive legal fees if the plaintiffs’ suit was in bad faith.

The complaint cites several articles which contend that Microsoft knew that at least 50% of the units were defective on launch, but whether those articles are admissible is doubtful due to the hearsay rules–possibly a story for another day…

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Microsoft RROD Class Action

Kotaku, not usually noted for their legal coverage, brings word of a class action lawsuit against Microsoft over the Red Ring of Death problems plaguing the Xbox 360 console.

Quoth Stuart Houghton:

A lawsuit filed at Sacramento County Superior Court alleges that Microsoft concealed the extent of the RROD problem in order to compete with the Wii and PS3 and contends that the company knew that as many as 50% of the launch consoles were susceptible to the overheating problem.

As well as seeking damages, the suit could force Microsoft to institute a refund programme in the state of California.

Well….maybe, on that last part. It’s not certain whether an injunction against Microsoft forcing a refund (which presumably would be the entire cost of the console) would occur simultaneously with damages, as the law prefers monetary damages over injunctive relief, especially when the equitable remedy sought is not easily distinguishable from the monetary damages themselves.  Consider: If Microsoft were forced to issue refunds, what would the damages be remedies for? Consumer’s frustration and time? Not likely. Again, this all assumes Microsoft doesn’t win. I’d venture to guess Microsoft isn’t in too shabby of a position here; all console systems nowadays have a relatively high failure rate, though 360’s was certainly higher than the others. It’s possible that  Microsoft will have a defense saying “The rate of failure, though higher than other consoles, was within the reasonable limits for a product in the high-technology market.” But again, that’s all speculation at this point.

No text on the lawsuit yet; hopefully dailygamesnews.com, which broke the story, will be kind enough to point interested spectators in the right direction.

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Business Shortcuts 10-3-08

Today’s shortcuts are all about business.

• Microsoft discusses the possibility of restructuring/merging Rare and Lionhead, idea looks unlikely.
• Tecmo and Koei in merger talks, described as an “issue of survival”.
• Koei/Tecmo to form holding company for stock swap to conduct the tens of billions of yen merger. Profits expected to rise by around 1% for Tecmo, and income expected to rise for 24% for Koei.
• Recent stock market troubles will not effect a possible Tecmo/Koei merger.
• Wednesday’s stock market bounce rallied game industry stocks.
• Srsly. Some stocks (Take Two, for one) gained back MORE than they lost, averages between 5% and 10% of total stock value.

Enjoy!

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Xbox 360 price drop undercuts Nintendo Wii

Kotaku is reporting that Microsoft plans to drop the lowest priced Xbox 360 SKU, the Arcade version, to $199, putting it cheaper (depending on market) than the Nintendo Wii. Most markets are selling the Wii at the $250 and $279 pricepoints, so having the significantly more powerful Xbox 360, which has a significantly larger library and more advanced online capabilities, is a serious threat to Nintendo.

I don’t know if we can bold this enough: This makes the Xbox 360 Arcade the cheapest of the current-gen systems. The other SKUs in the 360 line also get price drops, with the vanilla 360 and the Elite model at $299 and $399 respectively.

The threat this poses to Nintendo simply cannot be understated. When a consumer looks at getting a Wii or a 360, comparing them side-by-side, the only benefits that Nintendo’s console has are its motion sensing controller (something no longer unique to either the 360 or the PS3 anymore, though the Wii remote is obviously more advanced) and the library of Nintendo specific IPs. However, Microsoft wins hands down on size of game library, online games, graphical quality, ability to play DVD and advanced formats, interaction with home computers, and Xbox Live.

Simply put, the casual player will now have a strong reason choose the 360 over the Wii. Given that Nintendo began to develop a hardware dominance over the last six months of FY ‘07 (first six of calendar year ‘08), this puts that dominance in serious jeopardy.

The price drop also is mirrored in Japan, but that is not likely to make any real dents in Nintendo and Sony’s dominance, where the 360 is clearly (and likely permanently) a third place contender among the current-gen systems.

Popularity: unranked [?]