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FBI shut down the unauthorized computer game server L2Extreme, which hosted the NCSoft MMORPG Lineage II. Owners of L2Extreme provided its 50,000 active users with service and code for the online game for a fee. NCSoft claimed millions of dollars of annual loss due to this illegal service. L2Extreme operated pirated server software copied from the NCSoft server software. Users then registered with L2Extreme to play Lineage II instead of using NCSoft’s servers.
The financial effect is of course significant, but NCSoft also had to defend its intellectual property rights. The case, at first glance, is similar to the Blizzard v. BnetD case. However, BnetD reverse engineered the Blizzard server software without direct infringement on the original software. It was a fair use copy with no copyright violation involved. Contrarily, L2Extreme simply pirated the software from NCSoft. In addition, L2Extreme was a profitable business whereas BnetD was fueled by volunteer game enthusiasts. Otherwise, the details of both cases seem very similar.
Comparing the Blizzard v. BnetD case with this event, it becomes clear that seemingly minor details are in fact the deciding factors in many copyright decisions. In one, the FBI abruptly closed down operation without proper legal decision whereas in the other, the original game company could not persuade the court of any wrongdoing on the defendant’s part. Noticeably, intellectual property laws and their applications to the game industry remains a relatively new field. Hence, it is difficult to pinpoint what is right and what is wrong. Perhaps the single greatest law which many intellectual property and gaming related cases are based on is the Digital Millennium Copyright Act. However, there are many critics of the DMCA simply because of some of the consequences of invoking the Act. It remains to be seen how long the DMCA can last before undergoing major renovations. Much of that is derived from the evolutionary nature of gaming, where much change can occur in just a few years. Laws that are applicable in one year may become outdated the next year. This is the inevitable change of technology.
Marvel filed suit against NCSoft, the company which produces the popular MMORPG “City of Heroes”, for contributory copyright and trademark infringement. In the game, players can create their own characters to embark on missions to advance through the game. However, Marvel claims that the character creation engine allows players to create avatars resembling Marvel superheroes such as Wolverine or the Incredible Hulk. Marvel concluded that the creators of the game are aiding the players’ infringement of their trademarks on such characters. The case was settled outside of court. Evidently, NCSoft prevailed because they announced that there would be no changes to their character creation system.
Although the game does not contain an advanced system to exactly duplicate Marvel characters, it is possible for players to create their own characters with similar appearances. Then, Marvel’s argument might hold true. Granted, NCSoft did not deliberately place or aid players in creating these similar characters. However, the larger implications of this case had Marvel won would have a profoundly negative impact on the future of intellectual property and copyright law. NCSoft simply supplied the basic, physical creation tools necessary for player development in the game. To sue NCSoft would be similar to Marvel suing Lego for similar reasons. Owners of Lego pieces might attempt to build structures resembling Marvel characters. It seems almost ridiculous to litigate against a supplier rather than the actual violator of law.
“City of Heroes” contains a character building tool that encourages originality from the player. Players use this tool to create entities of their own imagination to participate in the game’s play. Even though such entities may ultimately look like copyrighted Marvel characters, gamers cannot be held accountable. They are not using these characters for any other purpose other than to play within the game. Therefore, it is implausible to sue a company which distributes these tools. Creation and creativity within games are what makes today’s games unique. Players are no longer subject to the generic characters. Such traits are integral to maintaining strong consumer attention towards the game and contributing to game development. If this decision had swung the other way, copyright law would have directly hindered the advancement of the game industry.
In this article, Schwarz and Bullis discussed the effects and consequences of intellectual property law on online gaming. In online multiplayer games, players collect cash and points through game play. This cash, applicable only in the game, can be traded for objects within the game that might improve the character’s ability or collection items. However, there are now markets outside the game in real life that trade this type of game currency in exchange for real currency. At first glance, the concept seems fair enough: trade different types of monies at rates that satisfy both ends. Yet, virtual currency, and for that matter, all characters, game plays, and settings, belong to the owner of the game server and software. Does the owner of the server own the currency too, or do players who play the game and gain the cash actually “own” the cash?
One must wonder how ownership should be defined in the context of Massive Multiplayer Online Role Playing Games (MMORPG). When one purchases a book, one may legally resell it. This type of ownership does not apply for digital music downloads. Does it apply for virtual currency and fantasy goods? Companies owning the games have formally banned the secondary market of real-world money trading, primarily to retain control of the game characters and also to avoid detraction from the game experience. If real money can be exchanged for aptitude in the virtual game, then the quality of gaming at its essence, where "skilled" players accomplish the most, diminishes.
The authors concluded that virtual goods and currency should be compared to the reselling of books rather than to the distribution of downloaded music. They argued that even though these goods do not exist outside of the online game, they are still goods that are traded from one person to another. When one player sells a sword to another, that player no longer holds the sword. However, digital files such as music can be duplicated infinitely and the original holder still retains one copy. Further, a physical CD of music can be resold because the original owner no longer owns that physical CD. Thus, whether goods are digital, virtual, or real was irrelevant in this discussion. According to Schwarz and Bullis, the tangible and physical nature of the good was the defining and determining characteristic of property.
An economy is the organization of resource production and distribution of goods and services within a community. As the number of worldwide online game players increase, virtual worlds have expanded in complexity. Game economies have risen out of nowhere to having players engage in day-to-day economic activities like in the real world. The economics of games themselves as a good is just as important as the economies within the games. At the most basic principle, games are purchased by consumers as a good to satisfy a need or a want. Players are initially drawn to virtual games for their entertainment value. Their interest and desire to continue play depends on how intriguing and exciting the game is to the player. Revenues from game subscriptions, in turn, can be invested into development of the virtual world and game technologies.
The future of MMORPGs and virtual worlds relies on this cycle. Better game play leads to more revenue and in turn, revenue produces better game play. If virtual worlds grow in the future to have a significant impact on real world economies and social interactions, then the economics of virtual games becomes important. Furthermore, games and their virtual worlds are owned and operated by game corporations. The effect that these owners have on the economies and on the rules that govern such economies is extremely important to the macroeconomics of the game industry.
With the introduction of real money to virtual world economies, there is an instant bias in terms of the construct of the game. Those with higher incomes have an advantage when purchasing virtual goods or services. As well, these same people might have the luxury of more free time to pursue leisure activities such as game playing. Since online multiplayer games do not end when one player logs off, game time is unevenly distributed. Immediately, the problem of price discrimination comes forth. Consider also that these games are generally open to the international market. Economies with different standards of living, currency values, and financial differences are now subjected to the same rules and regulations of an online game economy. Taking into account all of these restraints, game law must then adapt and compromise to this environment to meet the needs of this new global economy.
An avatar, in the context of online video games, is the in-game physical representation of the human player. In today’s multiplayer games, an avatar is often the three-dimensional character whose actions are controlled by the player. Usually, when the player first plays the game, the avatar is a simple character based on a common template. As the player advances in the game, customization of the avatar allows for individuality within the virtual world. This is similar to the real world, in which differentiation and specialization of persons as they age creates diversity and uniqueness in the community.
When an avatar develops autonomy in its own virtual world, akin to a human achieving self-reliance in the world, what type of legal and moral rights, if any, should it have? When users identify with their avatars, the term to define the human-avatar being is a cyborg. The article discusses cyborg rights in virtual worlds and their relevance to real world law. Although online games still exist primarily as a means of gaming entertainment, there is already overlap between the virtual and real worlds as demonstrated in virtual goods trading. In the future, as this interaction grows, it is imperative for some type of legal understanding to exist between virtual law and real world law.
When avatars are abused by other avatars in the virtual worlds, players sometimes complain. To resolve such conflicts, some communities punish players by lowering their rank, having groups of other players attack the violator, and/or other in-game mechanisms. To some, this issue seems trivial. Can virtual characters have rights? Avatars do not hold rights in traditional games such as the board game Monopoly. The distinction here lies in the commitments and influence of games on players. A study found that two percent of all players in the popular MMORPG Everquest devote over 60 hours a week in the game developing their avatars. Edward Castronova found that 12,000 gamers consider the virtual world Norrath, of the game by the same title, their true home. While these extreme scenarios may be attributed as addictions, the social implications of online games, virtual worlds, and avatars cannot be ignored.
Especially when game owners have ultimate control over avatars and can oversee all their actions, there will undoubtedly be issues of privacy rights. Clearly then, the problems that grace the real world will develop in virtual worlds too as they grow. Unfortunately, none of these questions and concerns is easily solvable. Eventually, communities and their players must realize these problems and craft laws most suitable for their unique situation. In the end, the authors of this article conclude that virtual law cannot be dictated by real world law. They are, after all, two separate worlds.
In this introductory essay for the Symposium issue of the New York Law School Law Review, Noveck explores the role of law in virtual game worlds. In order to develop a foundation on which to base law, it must be acknowledged that cyber worlds are a social community and there is a delicate relationship between the game players and the game creators and owners. This relationship, when extended to ownership, remains blurry and incompletely outlined. Hence, there is growing debate over the application of the real world law to virtual worlds.
Online role-playing games steadily grew in popularity since their mainstream start in the early 1990s. The steep increase in fan base correlates with the acceptance of Internet connectivity as an essential component of the average household. In turn, game companies realized the earning potential of online multiplayer games. By investing in sophisticated game physics and functionality, popular games could lure in users for long-term play.
Virtual worlds, at their core, are social networks and communities. They have traits which mimic human interaction within real-life communities. Property is created, goods are accumulated, and currency is traded. Instead of simply studying the laws of virtual worlds, Noveck suggests study of laws in virtual worlds as a way of learning about how law functions. Virtual worlds do not have written laws which govern player interaction. In fact, they are similar to real-life law in which it is continually revised and developed by new situations and new circumstances. However, there exists a basic constitution which is rarely, if ever, touched. Recognizing this, it may be possible to simulate a fictional law system to test in virtual worlds. This represents an application of virtual worlds towards possible benefit in the real world. These trials show a modern method of applying technology in order to better serve current real-life law models.