Looking back: Gamer/Law’s 10 predictions for 2012

Way back on 2 January 2012, now lost in the mists of time, I made ten predictions for interactive entertainment law in 2012. How did I do?

(1) At least one celebrity will win substantial damages against a publisher

I said:

“Consider the field. Back in 2008/2009 a whole bunch of US football players won about $28m in damages from EA over their unauthorised appearance in John Madden football games (reduced on appeal) and there’s still other celebrities either considering or taking legal action over their appearance in sports games – including an ongoing class action lawsuit brought by former college atheletes. Axl Rose is suing Activision over Slash’s appearance in Guitar Hero. No Doubt are also suing Activision over their appearance in Guitar Hero. A Cypress Hill rapper sued Take Two over his alleged unauthorised appearance in a Grand Theft auto game. Lady GaGa sued Mind Candy over their release of a song by Moshi Monsters character Lady GooGoo.

The games industry is realising the power of brands, especially celebrity brands. Celebrities are realising the power of games as a revenue generator and promotional tool. Sooner or later, this is going to lead to a big problem. The examples above are largely near misses or still-brewing problems: I think one of them, or another like them, is going to lead to a serious collision in 2012.”

Verdict: I was wrong. The college athletes lawsuit against EA is still ongoing. The Axl Rose lawsuit against Activision is still ongoing too (due for trial in February 2013 I think). No Doubt’s lawsuit against Activision settled on confidential terms. The Cyprus Hill singer lost his lawsuit against Take Two. Lady GaGa obtained an injunction against Mind Candy. No big payouts to celebrities.

(2) The Infinity Ward lawsuit will go to trial and be ENORMOUS.
I said:

“Read this interview with me here for details. The trial will likely take place sometime around mid-late 2012 I’d guess – assuming it doesn’t settle first. My totally speculative bet is that, given the amounts and issues at stake, it really should settle – but it won’t, because of the personalities and personal comments that have become involved. Then again, as I’ve said many times before, lawsuits are a real rollercoaster so who knows what will happen… “

Verdict: I was wrong. The case was settled on confidential terms.

(3) The legality and ethics of free to play will be a big issue in 2011.

I said:

“I’ve been influenced by my friend Nicholas Lovell of Gamesbrief on this issue – read his post here. I’m going to be speaking and writing about this a fair deal more in 2012, so watch this space. In the meantime though, the short version is: the more that f2p focuses on influence/compulsion mechanics to get player to cough up dosh, the greater the legal and ethical risks it can raise – including the potential for regulators to start getting involved. Stories like a UK child running up £900 in debt on Farmville for his mum or a US child running up $1400 on Smurfville don’t really help.”

Verdict: the jury’s still out. There has continued to be a lively discussion about this controversial topic during 2012, but I don’t think it quite attained the profile and heat I was expecting it to. But I think it’s still coming. In fact, so does my friend Nicholas Lovell of Gamesbrief: see his recent blogpost about how the ethics of free to play games will be “front and centre in 2013″…

(4) There will be more class action lawsuits…and no one will care.

I said:

“There have been lots of class action lawsuits over the last 2 years or so in the games industry. There was the Madden lawsuit I mentioned earlier (and there’s other class action lawsuits over Madden ongoing atm too). There was the Other OS class action lawsuit (since dismissed in Sony’s favour). There has since been another class action lawsuit against Sony following the fallout from the PSN outage this year. There were class action lawsuit over Facebook and Zynga over privacy issues. And so forth.

This is what they all had in common: no one really cared, apart from the defendants of the lawsuits. This is a shame: whether you agree with these class action lawsuits or not, they’ve clearly had an impact on a wide number of players in the games industry and it’s a pity there hasn’t been more attention drawn to them (both to those lawsuits which raise legitimate grievances as well as to those which are just money-grabbing). So, I wanted to use this prediction to both show that there will be more such lawsuits in the industry in 2012 – and that most people will ignore them.”

Verdict: I was right. For example, Zynga faces a class action lawsuit over its IPO. Blizzard faces a class action lawsuit over security concerns. Most recently, Instagram has become subject to a (frankly outrageous) class action over its Terms of Service. No doubt we can expect even more in 2013…

(5) Data privacy will continue quietly to become one of the biggest issues in the games industry…and again no-one will care.

I said:

“People are really motivated by data protection. We’ve seen that with the problems encountered by the search engines and social networks regarding their use of data harvested from their users – Facebook above all. The modern games industry, especially mobile and social games, is built on constant data collection. With a few honourable exceptions, the majority of the games industry doesn’t care a great deal about protecting that data. This is going to be a problem.

In fact, it’s already a problem, but it’s going largely undetected in public so far. Behind the scenes, savvy games developers and publishers will be looking at how they use and protect user data in 2012, but the majority won’t. At some point, this is going to blow up – possibly worse than it did for the search engines/social networks.”

Verdict: I was right! Data privacy really has continued to grow on the agenda of every major technology and software business, but many games businesses seem to continue oblivious – and this is despite major moves by the European Commission in the EU (see a quick guide here) and the Federal Trade Commission in the USA to update and extend their privacy laws. That said, one area where there has been greater attention is on the impact of privacy laws on mobile apps – this has received some attention in the games industry, albeit developers remain woefully ignorant about what legally they can do. Actually, I spoke about this quite recently on PC Pro (see here). More on this in 2013.

(6) Virtual goods will creep towards full legal status, but won’t get it (yet).

I said:

“In 2011, a man was successfully criminally prosecuted in the UK for effectively stealing virtual goods. This involved recognising that virtual goods are property (I called it at the time the “first virtual goods crime”). Similarly, in a lawsuit in Holland a court was invited to accept that virtual goods are property and therefore capable of being owned by players.

As this blog has argued previously (see here and here for example), there is a real issue over whether virtual goods should be considered goods (i.e. property) or just services: Gamer/Law’s views are that they are at least capable of being property, which would have huge implications for how virtual goods are treated in games at the moment. The examples given above are good indications that this question is slowly being answered: I expect to see more of this in 2012, but we’re still some distance from any kind of authoritative answer.”

Verdict: I was wrong. There were, as far as I know, no really significant new decisions in virtual property law during 2012. What there was though was a deal more discussion about virtual goods in 2012 – I personally was asked to speak on the subject of virtual property law more times in 2012 than ever before! There was also unprecedented media attention on the subject of digital content/virtual property ownership, in part prompted by (incorrect) reports that Bruce Willis intended to sue Apple to obtain the ability to pass his iTunes library to his children. (I spoke with the Guardian about digital content ownership here). So there remains a lot of interest in the topic, even though we’ve not seen major developments this year.

(7) Multiple developers (possibly even publishers) will go into insolvency – leading to a renewed focus on insolvency law.

I said:

“There was a lot going on in the developer world in 2011. Several developers told me they expected life to be hard in 2012 and that some of their competitors would not make it. I agree, sadly. Hard economic times, aa lack of games funding, developers focusing on the wrong kinds of games and the sheer amount of competition all mean that times are going to get tougher for developers next year. Publishers aren’t immune either: there are several mid-level publishers who are already in trouble.

As a result, my rather sombre and sad prediction is that we’ll see more insolvencies and layoffs from developers and possibly even publishers in 2012. As a result, there will be renewed interest in legal matters arising from a company going under, not paying its employee or its debts and what happens to its valuable assets (like its IP). On the plus side, I’d also expect to see a number of new studios arising out of their ashes, as has happened over the past couple of years.”

Verdict: the jury’s still out. The standout collapse in 2012 was that of THQ, although it will absolutely return in some form in the near future I’m sure. A number of small development studios quietly stopped trading, dissolved or went into receivership – but it wasn’t to the same degree as I was expecting. On the other hand, a number of friends in the games industry have mentioned to me recently that they expect 2013 to be a hard year, so let’s see…

(8) Indies will both cooperate and fight more with each other.

I said:

“The market pressures I outlined above will also weigh heavily on developers who have the stamina to keep trading. As a result, I’m already seeing a whole range of different moves by indies to collaborate more with each other, from networking events to formal joint ventures. Equally, I’m beginning to see a rise in developers having legal fights with each other, either because the collaboration didn’t work out or because of freestanding issues like IP infringement. Expect more in 2012 – possibly even some high profile lawsuits between the new generation of successful developers.”

Verdict: I was wrong (just). I was expecting more fights between developers, but they happened they didn’t become public. I was expecting more cooperation between developers and I think on that front it’s been more fruitful. I’ve seen indies sharing information together, talking together, even informally doing business together, in 2012 than in 2011. In particular, I’ve been privileged to be part of the Best of British group – a group of British independent developers working to pool their resources together for their and other indies’ benefits. On the US side of the Pond there’s been a lot of support for the LA Game Space, for example. Overall therefore, I think this prediction fails, but only just.

(9) Games industry unionisation won’t happen…again.

I said:

“Remember all that furore over the working conditions at Team Bondi and the various recriminations over it? There was various talk about whether developers should have a representative body to defend them in these situations – effectively, a union. Well, nothing happened. Nor has anything happened really with previous problems of this kind – check out for example this BBC article back in 2006.

So why is this worth a prediction? Because actually I think there’s something to be said for a representative body of that kind – whether it be an actual union or different national bodies (like TIGA or UKIE in the UK) taking on some of those responsibilities. Excessive crunch and other unsatisfactory working practices clearly do go on in the games industry, and a body with collective bargaining powers would be useful in bringing them to an end. But, for various reasons, nothing has happened so far in the games industry despite it being fundamentally similar to the film or music industries (both of which ofc are heavily unionised). Answers on a postcard why that’s the case and whether/when that might change…”

Verdict: I was right. In fact, I was so right that this wouldn’t happen that I don’t think anyone in 2012 even remembered how much of an issue this was in 2012…

(10) The high point of pro-film/music film IP laws will pass…but the games industry won’t be involved.

I said:

“It’s fair to say that the majority of changes to IP law over the last decade have been far more influenced by the music and film industries than any of the other creative industries – including the games industry. This is ofc despite the sharp rise in the games industry’s size and profile relative to music and film over the last few years. This is a shame: the games industry has just as much to gain from a well-crafted set of IP laws worldwide as music and film do. But it just hasn’t got its act together.

In the meantime, I’m predicting that history will show (heh, what a pretentious phrase) that 2011 was the high point of pro-music/film IP laws (by which I mean IP laws which focus more upon protecting the interests of large IP rights holders rather than consumers or small IP rights holders) and 2012 was the beginning of a move towards a more balanced approach. For example, in the UK 2012 will mark the quiet shelfing of large portions of the aims of the Digital Economy Act 2010 and (hopefully) its replacement with a more sensible evidence-led approach (see my friend Jonny Mayner’s summary of the latest proposals following the UK Hargreaves Review here). In the USA, I’m (maybe rather boldly) predicting that the likes of SOPA will either be watered down or lawmakers will finally become aware that the majority of consumers don’t actually want laws like them. It’s just a shame the games industry had nothing to do with these changes.”

Verdict: I was right. SOPA, PIPA and ACTA were smashed (as I wrote about in detail here). Governments around the world ceased talking (at least openly) about pro-rights holder IP legislation and some brave ones even began talking about a more balanced approach. The UK government in particular appears to be taking steps towards implementing the Hargreaves review, as it claimed in this recent press release expecting its new legislative proposals – which can be summarised as advocating a ‘common sense’ approach to IP law in future.

But, on the whole, this has been driven by the technology industry and not by the games or other creative industries (with a few honorable exceptions, such as the work done by UKIE in the UK and, to a lesser extent, ESA in the USA). So on that basis, I’m calling this as an accurate final prediction by me.

So there we are – a few fails, a few wins, and a few predictions where I was just ahead of the curve! Look out for my 2013 predictions soon…

FOOTNOTE: sorry for the delay in getting this to you guys – unfortunately Gamer/Law was hacked for much of December 2012, so it’s just finding its feet again now…