Lawful Neutral: Recapping 2022’s MMO and gaming law dramas

By
Andy McAdams
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Fam, it’s been a year. I know we’ve been saying that pretty much every year since 2016, but we’ll stop saying it when it stops being true. This year was a pretty epic year for legal gaming news. Although Blizzard takes the trophy for the “Most Litigated Company” for the third year running, a lot happened this year beyond that company – so much in fact that writing my year-in-review meant having to make some tough decisions about what to include and what to toss.

I settled on focusing on themes for this year’s review. We start off with the obvious recap of Activision-Blizzard’s year, sound off on some developments with regulation of lockboxes, move on to copyright registration, and wrap up with legal-adjacent topic of terrorism and extremism in gaming.

Looking at that list, do y’all remember when the most extremist discourse we saw in MMOs was the raid leader screaming, “MOAR DOTS!” over and over again? Pepperidge farm remembers.

Activision-Blizzard: The ever-growing dumpster fire of litigation

It’s impossible to start off any sort of legal year in review without talking about the proverbial elephant in the room: Activision-Blizzard. There were times over the course of the year when I felt I could have rebranded this column into “Blizzard’s Legal Watch” because oooof. We started off the year with a bang, as Microsoft announced its intent to acquire Activision-Blizzard (ATVI). It was always going to be tough sell to the US regulators, who have been much more bullish on anti-trust and monopoly in recent years than under previous administrations. Lawsuits started rolling in about a month after the announcement, and a year later, the litigation frenzy is still going strong as both gamers and the FTC are suing to stop the acquisition. It’s still not clear whether the acquisition will proceed or not… and equally unclear as to what it means for gamers.

The merger news wasn’t the only legal quagmire that Activision-Blizzard found itself in; there was also the on-going discrimination lawsuit drama (now with even more harassment and discrimination lawsuits), the class-action lawsuits over deceitful marketing practices, and ATVI’s penchant for spending at least five MassivelyOP-sized golden yachts’ worth of cash in its own personal war against treating its employees like people.

Oh, and lets not forget the epic falling-out between NetEase and Blizzard that’s resulting in Chinese players no longer able to play the games they enjoy. So kudos to Blizzard in 2022, whose antics took up only one-third of this legal year-in-review.

Lockboxes are still here

It was a bit of a mixed bag this year for lockbox legislation. The Dutch courts, which previously had fined EA $11M US in 2019 because they said it violated the region’s gambling laws, suddenly reversed course and rolled back the fine, relying on the definition of the lockboxes as not an “independent” game but rather part of a larger game, and therefore not gambling.

Interestingly, shortly there after Norway released a report asserting that lockboxes are manipulative and should be regulated. This was followed quickly by a call from the US Advocacy group Fairplay to the US Federal Trade Commission to investigate EA over its use of lockboxes. Although the call went out to the FTC in June 2022, the Commission has yet to actually respond.

Bringing up the rear, Australian lawmaker Andrew Wilkie proposed legislation that would make games with lockboxes adult-only, which depending on the rating could mean the outright ban of the sale of games with lockboxes in Australia. While this might seem like a good thing, Australia authorities do have a history of media overreach bordering on government censorship. While this might be good for the industry overall, the actual implementation of this law could wind up hurting Australian gamers more than protecting them.

Copyright is still a thing

Allowing me to touch back to my very first Lawful Neutral, Epic scored another copyright win as the court threw out the dance-related lawsuit of Kyle Hanagami, saying there was not enough similarity to warrant infringement. There were a few other copyright related cases over the year, including a rogue server for Shin Megami Tensai MMO that was shot-down over a copyright lawsuit. And Riot Games went after NetEase for infringement after the latter’s mobile game, Hyper Front, looked a little bit too similar to Valorant for Riot’s tastes.

Wrapping up our section on copyright, we have the exceptionally odd case in which a Final Fantasy XIV in-game nightclub advertised on a real-world billboard while using SquareEnix’s intellectual property. It’s unclear whether Squeenix actually did anything here – we assume note – but the amount of /facepalm that and tired sighing this incident caused was pretty epic.

Extremism and hate in games

While it’s not strictly a legal issue, we saw a dramatic uptick this year in interest in how video games enable extremism, terrorism, and hate. The US Department of Homeland Security, for example, offered a $700K grant for researchers willing to dig into extremism in gaming. Although that job listing has since been taken down, government contractor Accenture was likewise hiring a “Gaming Platform Advisor” that required security clearance.

Then in October, the United Nations Office of Counter-Terrorism released a report detailing the intersection between extremism and gaming, which I covered in this column in-depth. The brunt of the issue, according to the report, is that gaming is already so toxic that it’s hard to differentiate between “baseline toxicity” and “toxicity leading to radicalization and extremism.”

Just last month, US Congressfolks sent letters to top-gaming companies, like Activision-Blizzard, Microsoft, EA, and others, asking what they were doing to combat extremism in their games. Then a few days later, US Senator Maggie Hassan, senior member of the Senate Homeland Security Committee, took aim at Steam, sending a separate letter asking why neo-Nazi, extremist, and hate content has been allowed to proliferate on Steam. As I said in my piece on the UN report, anyone who’s been in the MMOspace for any length of time knows that extremist and hateful conduct happens in spades in games, but only now are elected officials also starting to take note.

What does 2024 hold?

If the ATVI-Microsoft merger goes through, it will likely happen in 2023. But it’s still very much up in the air. Whether it happens or not, gamers likely won’t notice anything dramatically different in the ATVI’s portfolio of games until 2024 or 2025 because these things move glacially slowly even when they’re not bogged down in litigation.

Lockboxes will likely continue as they are today. Companies are playing coy with how quickly they react threats of regulatory pressure, opting to do the bare minimum to protect the amount of cash they swindle from undiscerning gamers while also not getting into a lengthy and expensive legal battle. I doubt we’ll see any decisive action from regulators in 2024.

I think we’ll see a lot of movement in combating extremism and terrorism in gaming, however. And as extremism and terrorism become more top of mind, I think we’ll see increased scrutiny and pressure on game developers in a way that I’m not sure they are going to be especially happy with.

Finally, the Apple v. Epic lawsuit is continuing on into its third year now with only partial resolution. The fight ultimately stills boils down to which company makes the most money through a key opportunity to screw over gamers. As MassivelyOP’s Chris Neal says, the shrieking goat noises of the appellate process continue into 2023. And who doesn’t like to think about the shrieking goat noises of the appellate process?

Here’s our whole roundup of gaming law stories from 2022:

Every other week, Andy McAdams braves the swarms of buzzwords and esoteric legalese of the genre to bring you Massively OP’s Lawful Neutral column, an in-depth analysis of the legal and business issues facing MMOs. Have a topic you want to see covered? Shoot him an email!
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