A Closer Look at the Parallels Between US v. Stevens and EMA v. Schwarzenegger

This article is to supplement GP’s coverage of US v. Stevens and its implications for the game industry (also addressed on GamesLaw). I will elaborate on why the Supreme Court refuses to analogize depictions of the unlawful killing, maiming, wounding, etc. of animals to child pornography and why it probably will not liken video game violence to it either in the pending case EMA v. Schwarzenegger. Also, the somewhat less-discussed basis for the Stevens decision: overbreadth of the statute and why the EMA law will also likely be found overbroad and stricken. Read the rest of this entry »

Popularity: 56% [?]

Atkinson: “You don’t need to play this game”

Michael Atkinson, the rabidly anti-gaming Attorney General for South Australia, completely crossed the line into outright censorship in defending his decision to refuse ratings classification to Aliens vs. Predator, essentially banning the game. While the AG has long been the sole obstacle towards Australia gaining an 18+ mature game rating, he has always couched his arguments in that tired trope, think of the children.

Until now. Atkinson now believes that he should be the sole arbiter of what games you get to play on purely moral grounds. He recently proclaimed “You don’t need to be playing a game in which you impale, decapitate and dismember people.”

Atkinson’s hypocrisy really knows no bounds. On the one hand, he says “This is a question of a small number of very zealous gamers trying to impose their will on society. And I think harm society. It’s the public interest versus the small vested interest,” but on the other hand, he himself is the small vested interest that is imposing his will on the broad public. How many millions of dollars has Atkinson cost the Australian economy, by lowering sales of “altered” games like L4D2 (sending further sales overseas), or forcing publishers that show a backbone to outright refuse to sell in Australia?

Atkinson outright admits that the problem he forsees doesn’t even exist yet. “I accept that 98 per cent, 99 per cent of gamers will tell the difference between fantasy and reality, but the 1 per cent to 2 per cent could go on to be motivated by these games to commit horrible acts of violence,” ….note the emphasis. Could. Not “have”.

Despite the fact that Australians are allowed to watch violent movies with an 18+ classification, games unfortunately don’t get the same treatment. Unfortunate for the industry as a whole, not just Australians.

Popularity: 10% [?]

WoW Shut Down in China?

GamePolitics reported earlier this month on the battle between China’s Ministry of Culture and their General Administration of Press and Publication over control of the online game industry.   According to reports, the GAPP has banned Chinese WoW operator NetEase from running The Burning Crusade in China, and is requiring that they stop taking new subscriptions and cease current subscription fees. Most previous regulation, including censorship, of the industry has recently come from the Ministry of Culture, and this appears to be a major turf war between the two organizations. The Ministry of Culture has approved WoW in China, launched this September, while the GAPP did not.  For their part, NetEase has issued a press release stating that they believe they are in compliance with PRC law, and doesn’t indicate that they will be ceasing any operations. It also notes that they haven’t had any official “notice” of the ban, and that the announcement came from the GAPP’s website (rather than an official determination.) Earlier in the year, China banned FDI (foreign direct investment) into the gaming industry, and has increasingly cracked down on what it views as an opportunity for the expression of dissident viewpoints and “undesirable content.”

On a related note, I’m putting the finishing touches on a journal article regarding an international framework for protecting human rights in virtual worlds and MMORPGs. With this news, the topic only seems more relevant.  Chinese gamers should be entitled to express dissident viewpoints in a virtual world without fear of censorship, and without fear that their avatars and virtual property will be at risk of seizure or deletion. Similarly, virtual worlds operators should be entitled to profit from their businesses without fear of government crackdowns like this. I’ll post the article here once the publication process is complete.

The NetEase press release reprinted in full below.

NetEase.com Announcement Regarding Statement by the General Administration of
Press and Publication With Respect to World of Warcraft(R)

BEIJING, Nov. 2 /PRNewswire-Asia/ -- NetEase.com, Inc. (Nasdaq: NTES), one
of China's leading Internet and online game services providers, today
announced that the General Administration of Press and Publication ("GAPP") of
the PRC government has posted on its official website a statement that the
current operation of the World of Warcraft(R) in China by NetEase's affiliated
company, Shanghai EaseNet Network Technology Limited ("Shanghai EaseNet"), is
being conducted without proper approval from GAPP. The statement further
indicates that GAPP is returning Shanghai EaseNet's application for approval
and Shanghai EaseNet should suspend charging users to play the game and not
allow new account registrations. GAPP also notes in its statement that it is
evaluating whether to impose administrative penalties on Shanghai EaseNet. As
of the time of this press release, neither NetEase nor Shanghai EaseNet has
been officially notified of GAPP's determination. Shanghai EaseNet licenses
World of Warcraft(R), a massively multi-player online role-playing game, for
operation in China from Blizzard Entertainment, Inc.
    NetEase and Shanghai EaseNet believe that they are in full compliance with
applicable PRC laws and are currently seeking clarification from the relevant
governmental authorities regarding this statement by GAPP. NetEase will
provide further updates on the statement by GAPP as appropriate.
    About NetEase
    NetEase.com, Inc. is a leading China-based Internet technology company
that pioneered the development of applications, services and other
technologies for the Internet in China. NetEase's online communities and
personalized premium services have established a large and stable user base
for the NetEase websites which are operated by its affiliates. In particular,
NetEase provides online game services to Internet users through the in-house
development or licensing of massively multi-player online role-playing games,
including Fantasy Westward Journey, Westward Journey Online II, Westward
Journey Online III, Tianxia II and Datang, as well as the licensed game World
of Warcraft(R).
    NetEase also offers online advertising on its websites which enables
advertisers to reach its substantial user base. In addition, NetEase has paid
listings on its search engine and web directory and classified advertising
services, as well as an online mall, which provides opportunities for e-
commerce and traditional businesses to establish their own storefront on the
Internet. NetEase also offers wireless value-added services such as news and
information content, matchmaking services, music and photos from the Web which
are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
    Other community services which the NetEase websites offer include instant
messaging, online personal advertisements, matchmaking, alumni clubs and
community forums. NetEase is also the largest provider of free email services
in China. Furthermore, the NetEase websites provide various channels of
content. NetEase aggregates news content on world events, sports, science and
technology, and financial markets, as well as entertainment content such as
cartoons, games, astrology and jokes, from over one hundred international and
domestic content providers.
    Safe Harbor Statement
    This press release contains statements of a forward-looking nature. These
statements are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates" and
similar statements. The accuracy of these statements may be impacted by a
number of business risks and uncertainties that could cause actual results to
differ materially from those projected or anticipated, including risks related
to:  the risk that Shanghai EaseNet will not be able to continue operating
World of Warcraft(R) or other games licensed by it for a period of time or
permanently due to the position of GAPP or other governmental actions; the
risk that Shanghai EaseNet or NetEase will be subject to penalties or
operating restrictions imposed by governmental authorities in the PRC
resulting from the operations of their online games, including suspension of
their Internet service or other penalties; and other risks outlined in
NetEase's filings with the Securities and Exchange Commission. NetEase does
not undertake any obligation to update this forward-looking information,
except as required under applicable law.
    For further information, please contact:

    NetEase.com, Inc.
     Brandi Piacente
     Investor Relations
     Email: brandi@corp.netease.com
     Tel:   +1-212-481-2050

     Li Jia
     Email: liddyli@corp.netease.com
     Tel:   +86-10-8255-8208

SOURCE  NetEase.com, Inc.

Brandi Piacente, Investor Relations, brandi@corp.netease.com, +1-212-481-2050;
or Li Jia of NetEase.com, Inc., liddyli@corp.netease.com, +86-10-8255-8208

Popularity: 11% [?]

Pending Supreme Court Case US v. Stevens Has Implications for the Game Industry

Most attempts by state legislatures to censor the game industry involve statutes which prohibit the distribution of ”violent video games” to minors. However, these statutes have invariably been stricken down by federal courts because they sought to restrict distribution of games, the contents of which fell into a category of speech (violence) that is protected under the First Amendment and the respective states could not show the requisite danger of imminent lawless action that the First Amendment requires in  order to restrict speech that is protected(1).  Very recently in VSDA v. Schwarzenegger, the Ninth Circuit struck down one such statute for that reason(2). Through this and other examples, we see that courts are loathe to create new categories of unprotected speech, or to expand the categories that are already unprotected(3). On October 6th, the Supreme Court heard oral argument in US v. Stevens, which challenges the Constitutional validity of a federal statute that prohibits the creation, sale, and possession of depictions animal cruelty. Due to the insight into the new Court roster’s attitudes on First Amendment issues that Stevens will offer, we are watching closely.  Hit the jump for an in-depth analysis. Read the rest of this entry »

Popularity: 24% [?]

Jindal Passes Tax Breaks for Game Devs, Nobody Cares

GamePolitics is reporting on an AP story that Louisiana governor (and often cited potential Presidential candidate in 2012) Bobby Jindal has signed into law tax breaks to, among others, game development studios to try and bolster production in the state. The action has received praise from the ESA.

Here’s why you shouldn’t care: Bobby Jindal is the governor of Louisiana, and his tax breaks will only affect Louisiana. Not California, not New York, not any other state in the union. Louisiana. Now, you may be thinking “so what, he’s trying to attract an industry into Louisiana.” Problem is, that’s not going to happen.

Louisiana is different than most every other state in the union, because their state legal system has not updated itself to anything remotely resembling the 21st century. Louisiana is the sole state in the union that follows the “civil law” legal system, rather than the traditional common law. The problem with this form of law, is that while common law provides a certain amount of precedent, which can be researched and relied upon, the civil law system is relatively uncertain. It relies upon judges interpreting what the law should be. The difference is most marked in the area of estate law and succession, and to be fair the gap has narrowed with the Uniform Commercial Code. But game developers working in Louisiana have to abide by its law. They’re going to live there, and be subject to its tort laws when they get in a wreck going to work. They’re going to be subject to its estate law when they make a will, or (god forbid) pass away. They’re going to face the state’s antiquated legal system day in and day out, and that is a MAJOR turnoff for attracting skilled developers. Nobody wants to work in a state where you can’t tell what the law is in advance. The secondary issues like the abject poverty surrounding much of the state, inequality in education, jobs, and healthcare, and the blindingly deep corruption reaching nearly every level of the state’s government certainly can’t help.

So, while Bobby Jindal’s announcement is all fine and dandy, it’s a non-starter.

Popularity: 6% [?]

Blizzard v. In Game Dollar Analysis

Patent Arcade has a case analysis of the In Game Dollar lawsuit, perhaps more well known as Peons4Hire.com. Though the case settled and therefore doesn’t serve as binding precedent, it makes for a good study of Blizzard’s methods that they’d later use in other cases. Also, Virtually Blind (now defunct) has their own analysis here. Thanks again to the excellent Patent Arcade for the heads up.

Popularity: unranked [?]

China bans RMT, perhaps EVE Online.

China’s Ministry of Culture and Ministry of Commerce have banned the trading of virtual currency for tangible goods or services. According to the ministry, “the virtual currency, which is converted into
real money at a certain exchange rate, will only be allowed to trade in
virtual goods and services provided by its issuer, not real goods and
services,” and specifically includes prepaid game cards for online games.

This presents something of a problem for games with sanctioned RMT models, as by the ministry’s wording not even game publishers can traffic in real goods and services. For a game like EVE, where the developers have sanctioned third party trading in prepaid time cards, this seems to run afoul of the letter of the policy; rather unfairly as it doesn’t seem to violate the spirit of the policy. Interestingly, China Daily is reporting that virtual item selling will not be covered under this policy.

Something tells me that this is going to be a rather empty gesture by the Chinese government, but we’ll keep an eye on this.

Popularity: 2% [?]

California appeals VSDA v. Schwarzenegger to SCOTUS

The State of California has appealed their loss in the VSDA case to the U.S. Supreme Court, asking for a grant of writ of certiorari on the following questions:

1. Does the First Amendment bar a state from restricting the sale of violent video games to minors?

2. If the First Amendment applies to violent video games that are sold to minors, and the standard of review is strict scrutiny, under Turner Broadcasting System, Inc. v. F.C.C., 512 U.S. 622, 666 (1994), is the state required to demonstrate a direct causal link between violent video games and physical and psychological harm to minors before the state can prohibit the sale of the games to minors?

(see pet. for cert. here in .pdf format)

In response, the EMA (formerly the VSDA) had this press release:

Statement of Sean Bersell, Vice President – Public Affairs, Entertainment Merchants Association (formerly Video Software Dealers Association), on the decision of the state of California to ask for U.S. Supreme Court review of the court ruling finding California’s video game restriction law unconstitutional:

“It boggles the mind that, on a day when the state of California finds itself in the worst fiscal crisis it has ever faced and is considering massive layoffs of teachers and cuts to public services, the state would choose to waste tens of thousands of dollars on pursuing this frivolous appeal.

“This law was found by two lower courts, relying on long-established legal precedents, to be unconstitutional as an infringement of the First Amendment. There have been eight similar laws enacted around the nation this decade and every single one has been found unconstitutional on similar grounds. There is no reason to expect a different outcome in the Supreme Court.

“So far, this case has cost the state of California approximately $400,000 just in legal fees and court costs that it has had to pay the plaintiffs. This doesn’t even include the state’s legal fees and costs. And if this appeal is unsuccessful, as it will be in all likelihood, the state will owe the plaintiffs even more in legal fees and court costs.

“The taxpayers of California should demand that their elected officials stop wasting precious tax dollars on this quixotic quest.”

For background on the VSDA v. Schwarzenegger case, please see http://www.entmerch.org/schwarzenneger.html.

I’m putting my money on the court either denying cert, or granting for a summary decision. Neither of the questions are substantial points of law that SCOTUS should need to make a decision on; they’re both well settled in VSDA/EMA’s favor, under SCOTUS precedent. Furthermore, there are to my knowledge no circuit splits on the questions that would prompt SCOTUS to make a ruling. Finally, even if they did, the second question in the petition is partially irrelevant to the outcome because even if no direct causal link was required, the law was facially unable to meet strict scrutiny anyway. For these reasons, I’m willing to bet that the court will either deny cert, or summarily uphold the 9th Circuit’s decision. We’ll keep you updated as we hear more.

Popularity: 14% [?]

Blizzard sends C&Ds to WoW iPhone programs

Ahh, I love the smell of Cease and Desist notices in the morning. According to WoW Insider, Blizzard has started to send out notices to all WoW iPhone application makers that utilize Blizzard’s Armory website (a site that allows players to see stats and equipment from their characters, as well as any other), instructing them to take down their apps or else.

A couple of things to note on this action. First, these WoW apps have been on the store for a quite awhile now. With the first ones arguably coming right after the introduction of the App Store 10 months ago. Second, Blizzard’s actions come on the heels of a recent video floating around the web showing that the WoW maker may have an official app coming soon on the iPhone that will allow gamers to actually play the MMO on their phone. Finally, Blizzard already has one official iPhone app in the store, so they could just be trying to uphold their IP rights and clear out any confusion.

In any case, it’s always a little sad having to report on the strong hammer of business taking out small developers not really intruding on the market of the big guy (yet). We’ll keep you posted on further developments.

Popularity: 5% [?]

Thompson v. The Florida Bar: Filings Distributed To The Supreme Court

This morning, Jack Thompson’s petition for a writ of certiorari (basically a complaint accompanied by an appellate brief) was circulated among the nine Justices, who will decide whether or not to hear his appeal of his disbarrment. As of this writing (about 5:40pm Eastern Time), there is no word on their decision. We can expect to hear more news on Monday, when the Court’s weekly Order List is posted on the Supreme Court’s official website. Read the rest of this entry »

Popularity: unranked [?]