On MMOs, EULAs, Other Legal Shenanigans

Garthilk writes "In an interesting Q&A over at Okratas.com, they pose some questions for MMO-related lawyer Don Shelkey. Don is a lawyer with Buchanan Ingersoll PC, one of the largest 110 law firms in the nation, who represent many videogame developers on legal matters. Don explains what exactly Technology Transactions are, how EULAs protect the developers, virtual property law and a little about his work with Sigil Games regarding Vanguard: Saga of Heroes." Shelkey, himself a rabid online gamer, argues of MMOs: "EULAs [End User License Agreements attached when you buy a game] are enforceable contracts and there is nothing to indicate that a clause prohibiting the sale of online goods wouldn't be enforced. So, courts should enforce the EULA in the company's favor based on a breach of contract if the company were to proceed to trial on the matter."

Comments

Online property laws

[Doctor Cat]

You know, 50 or 100 years from now, there'll be legal precedents, court rulings, and/or laws establishing what does or doesn't happen in the courts when someone steals your castle or your magic sword, who pays real world taxes on what, etc. For better or for worse. But somehow, I like the era where mostly the courts and the legislators and the police haven't even noticed the idea of "virtual property law" yet. When you might just say "Well, how do I want my game to work" and try and get away with it. It leaves us developers a little more elbow room to try and do that "innovation" thing. Hopefully, in the long run, we'll end up with laws that do more good than harm. But I like the whole "settling the wild cyberspace frontier" feel in the current marketplace.

Re:Why turn your back on a revenue stream?

[Ronny Cook]

If the items sold are regarded as assets, the company has an obligation to maintain the value of those assets. Otherwise it can get sued.

For example, I sell you a virtual sword for $1. I've made $1 for that, but if I then shut down the game where the virtual sword exists, you no longer have access to that $1 "asset" and you can sue me for (effectively) stealing it from you.

One possible way around this is to code depreciation into the game engine - assets depreciate by 50% per annum and lose all value after 5 years. Until the 5 year mark the company will buy your virtual sword for its full depreciated value. If the depreciation is described up-front, before the purchase, there's no contractual basis to sue; the company has used assets in "maintaining" the virtual object and the depreciation simply reflects that. Such virtual property will have to appear on the company balance sheet as a liability until fully depreciated.

There are other reasons for these restrictions - once an item becomes your property rather than theirs, they can't freely change the object (whether it be the graphic model, or some other characteristics for balance purposes), restricting how the company can adjust the game they've written. The quality of the game may suffer as a result - if a munchkin item is released it can't be rendered harmless, and those who possess such items become disproportionately powerful. "Stealing" within the game starts to matter more, and the company may be forced to take on some law enforcement functions that they could really live without.

However, I suspect the main reason is just so the MMOG companies retain their freedom to pull the plug when they want to do so.