All Your Base Are Belong To Us a.k.a. GG! B 1337 & Pwn Ur NMEs (Business & Legal Issues in the Video Game World - Part I)

November 29, 2016

 

 

I have been wanting to write an article on one of my passions - video games - for awhile now.  What better time than in advance of the holiday season? So, let’s start with a brief history and examine some business and legal issues in my very favorite industry!

 

Disclaimer: The following information does NOT constitute legal advice and is only for general educational purposes.  Each situation is different and specific legal issues usually require additional research and investigation, so please do not rely on this article to address a particular legal issue; use this as a starting point to gain a general understanding.  This article, although educational in purpose and substance, nevertheless, might be deemed attorney advertising, and prior results do not guarantee future success.

 

Supplemental Disclaimer: I grew up with arcade games in the 1980s (over 1M score on Spy Hunter, you’re not worthy!).  My only video game console was the Atari 2600, and sometime after I acquired an Atari 800 (Epyx rules!  Especially Crush Crumble and Chomp!).   Since around 1999, I have been an Intel / Nvida fanboi, and Personal Computers (“PCs” are my exclusive gaming weapon of choice).  I play most genres of games, but 4X, RPG and FPS are probably my favorites.  I’m intrigued by MMOs, and have a Sith Lord in SWOTOR, but other than that I just never got into them.  I don’t do console or mobile games at all.  With that in mind, take my highly focused (and biased!) perspective for what it’s worth.

 

I.  Introduction

 

Wide Appeal

 

Ok, now that we got that out of the way, let’s get to the basics! First, love ‘em or hate ‘em, video games are no longer something just your kids do, or a palliative for some dork in the basement who can’t get a date on Saturday night.  59% of all Americans play video games, half of them are women, 23% of them are senior citizens.[1]  In fact, today, video games are estimated to bring in about $16B dollars a year in the United State alone.[2]  Worldwide, for 2015, that figure was closer to $100B.[3]  Some estimate this value to be more than Hollywood earns (although, in fairness, it may depend on your methodology).[4]

 

A Little Bit of History

 

Video games arguably may have been said to have been invented, at least experimentally, about 1962, at MIT, with Space War.[5] The game consisted of a dueling starships, around a sun, that had to contend with simulated real physics gravity, limited fuel, and a limited number of energy torpedoes.  However, it wasn’t until the increasing miniaturization and affordability of electronics, that such games really became more of a household item, in the late 1970s and early 1980s,[6] playable on consoles like the Atari 2600.[7] 

 

However, soon enough, household personal computers (“PCs”) (as opposed to college, corporate or government mainframes) started to capitalize on the market, the Atari 800 and Commodore 64 being the popular platforms of the day,[8] with whopping memory capacities of 48K and 64K RAM[9] respectively.  I say “whopping” somewhat tongue in cheek; in its day those were good numbers, but think about this: roughly speaking, 1 character (like the letter “A”) takes up 1 Byte, and 1,000 Bytes make up a Kilobyte, so you’re talking about 1,000 letters. 

 

In practice, that meant, I often ran out of memory while doing reports in high school, as maximum memory allowed for about 20 typewritten pages, more or less (still an improvement off of typewriters - which, yes, I used).  Today, about 1,000 Kilobytes equals 1 Megabyte; and 1,000 Megabytes is 1 Gigabyte[10].  So, by comparison, my current PC, has 16GB of Ram or 16 x 1,000MB x 1,000KB = 16,000,000K compared to 48K around 1987.

 

Anyway, back then consoles gave way to computers and they have gone back and forth ever since vying for supremacy, so that “PC v. console” has become a warring front, where tempers run hotter than the stars players virtually fly around shooting each other.[11]  Then a funny thing happened on the way to the gaming forum - with the advent of cell phones (and other portable play devices), mobile games became a real thing, maybe as early as mobile Tetris in the 1990s.[12] 

 

Today, despite all the scorn of console gamers and others, PC games make up an estimated $32B of the worldwide video gaming market, compared with $25B of the console market and $25B of the mobile platforms (smart phones).[13]  However, as you can see, each one of those economy segments is worth more than every country not in the top 100, by GDP.[14]

 

Widely Different Types of Games

 

And, if you’re total alien to this pastime, what exactly are these games? Well, they range from anything as “mundane” as playing chess against your computer or smart phone, to the silly good fun on your phone (Candy Crush or Diner Dash anyone?), to hyper-complicated, MBA-like “4x”[15] games balancing economics, diplomacy, exploration, and war - anywhere from Ancient Rome to the modern era, or in space or medieval fantasy (Civilization, Age of Wonders, Masters of Orion).

 

Also, there are quick witted and re-flexed tactical combat “real-time-simulation”[16] games (Star Craft, Command and Conquer),  role playing games[17] (“RPGs”) of every kind where you pretend to be someone else (a wizard, an assassin, an apocalyptic survivor, illustrated by games like Baldurs Gate, Fallout, Gothic III, Skryim and others) to first person shoot-em ups (Call of Duty, Medal of Honor), and a couple more yet.  Don’t even get me started on the complexity of MMORPGs which actually are one of the fastest and largest growing sectors of the PC market.[18]

 

Put simply, if you’re new to all this, there is a game for virtually everyone: it could be “fuddy-duddy” Scrabble which you pass the time on your commute on the train.  Or, if you have a few hours to kill at home, on your “souped-up”  $2,000 PC entertainment system, you can pretend you are a space commando, exploring strange worlds, armed with the ray gun of your choice, customized to fire proton sniper rounds  through magnetic shields, while you communicate with your headset to 30 teammates playing against another team of strangers, all online, rendering the most Hollywood quality special effects of which you could dream (if you don’t have any idea what I’m talking about, watch the video under this footnote - yes those are real people playing each of those space soldiers).[19]  Or anything in between.

 

Trouble in Paradise

 

Just as some theorize there can be no “good” without “bad” like two sides of the same door, so too, does the video game industry have its issues.  All … kinds … of issues.  Some technical, some boring, some splashy over the headlines.  So, let’s talk about some of them. 

 

II.  Are Video Games Preparing Our Children for the Coming Apocalypse? [20]

(again, watch the video for this footnote, it’s very funny!)

 

Generally

 

“It’s a chance we’re going to have to take.  Playing video games all day alone and friendless is simply the best way we have to prepare our children for a life of solitude in a barren wasteland.” 

 

That is one of my favorite quotes from The Onion[21] parody of the TV commentator show Crossfire, in an episode where they were satirizing the discussion regarding violence in video games.  But some parental and other concerned groups do not find this topic as nearly as funny.   This culminated in the 1993 Joint Senate Government Affairs and Judiciary Hearings on Video Game Violence.[22] Today, these groups crusade against what they deem excessive sex and violence in video games which they claim encourage poor behavior among children and can even lead them to commit criminal acts.[23] 

 

The Science

 

The science on the subject has been dicey at best, and generally non-conclusive in the extreme.  Some studies purport there is some link between lots of video game playing and “increased aggression” (whatever that means).[24]  “However, even after more than 20 years of studies, the American Psychological Association says there still isn't enough research into whether games cause actual criminal violence.”[25] Further, even the BBC remarked, “a large group of academics said they felt the methodology of the research was deeply flawed as a significant part of material included in the study had not been subjected to peer review.”[26]

 

Government Intrusion &

Unification of the Industry

 

Nevertheless, this has led to a number of legal, organizational, and business issues and decisions for the gaming industry.  The 1993 Senate hearing persuaded various video game competitor developers and publishers, who just had been at each other’s throats during the hearing,[27] to band together to forestall potential federal legislation and regulation, and create a self-regulatory framework for assessing and rating video games.[28] 

 

Thus, in 1994, was born the Interactive Digital Software Association, which since 2003, has been called the Entertainment Software Association (“ESA”).[29]  In another article, I’ll get more into the implications of the evolution of a completely new trade association for a nascent but soon to be burgeoning massive behemoth of an industry.  For now, know that alleged video game violence = parental and other groups protests = United States Congressional hearings = new trade association to unify a fractured industry.

 

Another organization to arise from the ashes of the 1993 Senate hearings was the Entertainment Software Review Board (ESRB) and their rating system.[30]  The ESRB, is a nonprofit, created by the ESA to provide ratings to video games, so parents can have *some* idea of how age appropriate they are. Games can run from as cutesy as Diner Dash, where you try to keep customers happy in their diner, to Fallout 4 which has a level of ultra-violence not usually seen except in places like Clockwork Orange or Mad Max.  The rating system is theoretically voluntarily but many gaming chains and console developers will not carry the games if they are not rated.[31]

 

Additional Government Regulation

 

Also, one of the dumbest inventions - ever - came out of subsequent meddling by Washington.  In 2005, Senators Bayh, Clinton, Johnson and Liberman introduced the Family Entertainment Protection Act, which would impose hefty fines on individuals or businesses found selling M- or AO-rated (basically “mature”).[32]  This probably inspired the ESRB to institute the much hated “age gates” on websites, at least as early as 2010.[33]  This extremely stupid and useless bureaucratic crowd pleaser, forces a viewer to enter their age, potentially - EACH AND EVERY TIME - they view a trailer that might too violent or racy for kiddies.  Jeff, what’s your problem? Do you have no decency? Do you hate children? Here’s my beef: 

 

Anyone can enter any age; there is no verification.  Most video game companies think I was born in 1900, and any three year old will figure that out as well, and therefore get to see all the killing and sex they like on these trailers.  There is absolutely no age-verification except to what the viewer cares to admit.  So, just another repetitive “duh, look at me I’m doing something, feel good about yourself ‘crafty’ government politicians” moment that solves nothing, but forces the rest of us to have to perform needless steps every time we want to watch a video game trailer.  Money well spent, D.C., great job! (sorry for the rant, but after over a decade of public service, I have no patience at all for this ‘do-nothing but annoy’ nonsense).

 

And, government meddling has not been limited to the Feds.  Illinois and Michigan unsuccessfully attempted to restrict or ban violent games to minors (the courts overruled them on Constitutional grounds).[34]  When California attempted to do the same, the U.S. Supreme Court finally became involved, and in a 7-2 decision, struck down the law as a violation of the First Amendment, and in essence left the decision to parents rather than the government (citing that Grimm’s fairy tales were every bit as gory as many of these games, so was the government to restrict children from reading those as well?).[35]

 

Conclusion

 

Violence in video games, just as in movies, unfortunately remains a controversial topic, but I bet no effort to seriously ban or restrict them would succeed given the current sheer power and money of the industry.  Pandora’s Box has been opened.  However, with increased popularity, came increased opposition, leading to government intervention, resulting in the unification of a divided industry around common interests, making the industry as a whole even more powerful. 

 

Next time, we’ll look at other business and legal aspects of the video game industry.  For now, happy holidays and happy gaming!  

 

***

Pre-Notes: 

(Edit: These didn't make it in to the original footnotes)

 

"All your base are belong to us"

[a] https://en.wikipedia.org/wiki/All_your_base_are_belong_to_us.

 

"GG! B 1337 & Pwn Ur NMEs"

[b] http://www.netlingo.com/acronyms.php.

 

***

 

[1] https://consumerist.com/2014/06/09/its-time-to-start-treating-video-game-industry-like-the-21-billion-business-it-is/.

 

[2] http://essentialfacts.theesa.com/Essential-Facts-2016.pdf, p.8.

 

[3] http://fortune.com/2015/01/15/mobile-console-game-revenues-2015/ ($91.95 billion in 2015).

 

[4] http://www.gq-magazine.co.uk/article/video-game-industry-evolution-2014.

 

[5] https://en.wikipedia.org/wiki/Spacewar! (note, technically, there may have been earlier games, but this was the first acknowledged one that could be played in multiple terminals).

 

[6] https://en.wikipedia.org/wiki/Arcade_game#Golden_age.

 

[7] https://en.wikipedia.org/wiki/Atari_2600.

 

[8] https://en.wikipedia.org/wiki/History_of_video_games#Early_home_computer_games_.281976.E2.80.931982.29; https://en.wikipedia.org/wiki/Atari_8-bit_family; https://en.wikipedia.org/wiki/Commodore_64.

 

[9] Random Access Memory - the temporary memory your computer has - i.e. you know when you turn off your computer and you lose everything you haven’t “saved”? That’s RAM.

 

[10] https://www.quora.com/Is-1-GB-equal-to-1024-MB-or-1000-MB (some claim it’s really 1,024 not 1,000).

 

[11] http://www.pcworld.com/article/3118250/software-games/9-reasons-why-pc-gaming-is-a-better-value-than-consoles.html; http://www.lifehacker.com.au/2015/08/why-im-a-console-gamer/; http://www.giantbomb.com/forums/general-discussion-30/whats-the-deal-with-the-pc-vs-console-animosity-553660/; http://www.gamespot.com/forums/system-wars-314159282/why-do-pc-gamers-and-console-gamers-hate-each-othe-31395064/.

 

[12] https://en.wikipedia.org/wiki/Mobile_game.

 

[13] http://www.ign.com/articles/2016/01/27/pc-dominated-worldwide-game-revenue-in-2015.

 

[14] http://statisticstimes.com/economy/countries-by-projected-gdp.php.

 

[15] https://en.wikipedia.org/wiki/4X (explore, expand, exploit, exterminate).

 

[16] https://en.wikipedia.org/wiki/Real-time_strategy.

 

[17] https://en.wikipedia.org/wiki/Role-playing_video_game.

 

[18] https://www.superdataresearch.com/global-mmo-games-spending-exceeds-12bn/.

 

[19] https://www.youtube.com/watch?v=jXU5k4U8x20 (footage from Battlefront 2015).

 

[20] https://youtu.be/VTbYUd1jUc4 (Are Violent Video Games Preparing Our Children for the Apocalypse) (The Onion) (I highly recommend watching this, lol).

 

[21] The Onion is a parody website: https://en.wikipedia.org/wiki/The_Onion.

 

[22] https://kevinimpellizeri.wordpress.com/2013/12/09/the-december-9-1993-video-game-hearing-a-look-back/.

 

[23] The Parents Television Council, British Columbia Teachers Foundation, Mothers Against Video Game Addiction violence, and others.

 

[24] http://money.cnn.com/2015/08/17/technology/video-game-violence/.

 

[25] http://money.cnn.com/2015/08/17/technology/video-game-violence/.

 

[26] http://www.bbc.com/news/technology-33960075.

 

[27] https://kevinimpellizeri.wordpress.com/2013/12/09/the-december-9-1993-video-game-hearing-a-look-back/ (Howard Lincoln of Nintendo and Bill White of Sega brought their industry feud into the halls of Congress. Lincoln, the former trial lawyer, successfully deflected congressional ire toward his counterpart at Sega, seasoned with some personal attacks directed at White, a former employee of Nintendo … White repeatedly found himself as the target of legislative outrage).

 

[28] http://www.esrb.org/about/; https://en.wikipedia.org/wiki/Entertainment_Software_Rating_Board.

 

[29] https://en.wikipedia.org/wiki/Entertainment_Software_Association.

 

[30] http://www.esrb.org/ratings/faq.aspx#1.

 

[31] http://www.esrb.org/ratings/faq.aspx#1.

 

[32] http://www.escapistmagazine.com/articles/view/video-games/columns/the-needles/1300-Inappropriate-Content-A-Brief-History-of-Videogame-Ratings-and-t.3.

 

[33] http://www.esrb.org/about/chronology.aspx.

 

[34] (Illinois 2006) https://www.cnet.com/news/court-rejects-illinois-video-game-law/; (Michigan 2006) http://www.nbcnews.com/id/12151797/ns/technology_and_science-games/t/michigan-video-game-ban-struck-down/#.WEpVN1wYMZE

 

[35] https://en.wikipedia.org/wiki/Brown_v._Entertainment_Merchants_Ass'n.


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