The following article should not be taken as legal advice. I am not a lawyer. You’re welcome to discuss my opinions with your lawyer, of course.  ;-)

NDAs, aka “non-disclosure agreements,” are common to every industry, but the video game industry has a special fascination with them. We fear that our ideas will be stolen. We worry about alerting competitors to our plans (and thus giving them time to respond more effectively.) We worry about losing control of the marketing message.

Your idea isn’t as sacred as you think it is

In general, we worry excessively — particularly about the theft of our precious ideas. The overlap between companies who will steal raw ideas and companies who are competent enough to execute upon them is very, very small. And the number of ideas that are genuinely worth stealing is even smaller.

Don’t confuse the theft of ideas with game cloning — the latter is common because execution has already taken place and the market for the idea has been proven. Executing on a design and proving out a market are hard things to do, and only the best companies (Valve, Blizzard, etc) successfully do so on a regular basis.

Evaluating the circumstances around an NDA

Nevertheless, it’s fair to say that sometimes game developers really do have good reason for wanting to keep a secret (which may or may not relate to design ideas.) And sometimes, that secret must be shared for business purposes. Time to whip out the NDA, right?

Not necessarily. In my opinion, an NDA is only appropriate in certain circumstances. Those circumstances depend largely upon who you’re speaking to and what you’re offering that person, aside from awareness of your secrets. An NDA is basically a company’s way of saying: “we think you can probably be trusted with the information you’re about to receive, and we know that NDAs are extremely difficult to enforce anyway, but we hope the act of signing this document will make you slightly less likely to (carelessly or intentionally) spread our secrets around.”

That’s an OK message to send to potential business partners who might ultimately reap some value from their interactions with you. But, for example, it is probably not an appropriate message to send to friends who you’re asking for advice, for help networking, etc. An NDA only has a very small chance of actually inhibiting malicious or careless behavior — enough to barely justify the existence of the NDA, but not enough to risk offending your friends or to reduce the likelihood that they will feel inclined to help you. Remember that you’re essentially asking for a gift. Imagine calling your neighbors and asking if they will babysit your kids, but requiring them to sign a legal agreement first. This is similar.

The same is true for friends-of-friends when you’re asking them for free advice, etc. It is true that you don’t personally know these people, so “trust” is an issue. But at the same time, they don’t personally know you, so why should they give you anything for free? The answer is simple: because someone they do trust and respect has essentially requested a favor on your behalf. How are you going to reciprocate?

Signing an NDA isn’t always as simple or trivial as it seems

The aforementioned examples are not the only situations in which an NDA might be inappropriate or unhelpful. NDAs can change the nature of a conversation, and it pays to consider how they do so.

Asking someone to sign an NDA immediately cools the air. It shifts the conversation from whatever it may have been (warm? exciting?) to something more formal and wary. It creates a little bit of friction. Sometimes this is what you want, but sometimes it isn’t. My point is: consider the circumstances and make an intelligent decision. Don’t be on autopilot with NDAs.

Some venture capitalists and publishers won’t sign a developer’s NDA on principal alone. They are pitched so many concepts on a regular basis that it’s inevitable some concepts will be similar, if not identical. An NDA might cause them to be sued by a developer who mistakenly believes her idea to have been stolen. An NDA might prevent a VC or publisher from making obvious, helpful comments, simply because another developer made similar comments earlier that month. I can sympathize, having been exposed to a great many (similar) concepts while I was working for Microsoft.

Carefully consider whether you really need someone to sign an NDA. And if you ask someone to sign and they refuse, do not immediately assume that it means they are treacherous fiends. It certainly might mean that, but it could also mean they don’t care enough about hearing your idea to sign your NDA. Not exactly the sentiment you want floating through someone’s subconscious when you’re trying to impress them!

For these (and for many other) reasons, I very rarely ask people to sign NDAs of my own unless I’m compelled to do so by an obligation to a client or partner. I’m simply unconvinced that the value of an NDA is great enough to justify the hassle and the negative sentiment it might generate, as opposed to the value of unrestrained feedback on my ideas and plans, which I truly appreciate. Your mileage may vary, of course.

PS. Danc posted an article on the counter-productiveness of keeping new game ideas secret back in 2005. As always, his thoughts are worth your time.

I just finished reading Ernest Adams’ latest Gamasutra article, “Damn All Gameplay Patents!” It’s a well-intentioned piece that argues passionately against gameplay (as opposed to technology) patents, and contends that developers should not pursue them under any circumstances. I genuinely appreciate the sentiment that drove Ernest to write this article and agree with much of it, but I feel that some nuance is in order. Consider the following:

Patents are Somewhat Like Nuclear Weapons

In many ways, gameplay patents are like nuclear weapons. They’re expensive to develop, and they engender feelings of fear and mistrust. Put plainly, most of us would prefer to live in a world without them.

Unfortunately, like nuclear weapons, many gameplay patents already exist and are in the hands of many different owners. No matter how passionately we write, those owners will not simultaneously and universally revoke their patents tomorrow. Which means that some companies have nuclear weapons (I mean, patents)… and some don’t.

And just like in the real world, asking the countries without nuclear weapons to avoid developing them rarely works — even with economic perks or threats as incentive. More often than not, the countries that couldn’t afford to develop nukes anyway, or that don’t feel threatened, play along, while those that can/do proceed with development. Witness India, Pakistan, and North Korea.

Playing Chicken

Of course, Ernest anticipates this reaction. He quotes others who have argued: “patents are here to stay, and anyone who is serious about business had better make use of them before his competitors do” and retorts “this aggressive view is founded upon an assumption that patent legislation and US Patent and Trademark Office policy will not change. They may very well be wrong about that. Pressure is building on Congress for major patent reform.”

1) I’ve never heard of a good business strategy that was based on action Congress “might” take, especially when the timeline for that action was unknown, and especially when waiting meant putting yourself at risk.

2) Who says you need to “use” your patents?

Returning to my nuclear analogy, the “nice” thing about nukes (if one can say such a thing) is that, when everybody has them, nobody uses them. (Well, at least to date. We could still end up roasting in a global inferno.)

Companies with the financial resources necessary to secure gameplay patents can take the high ground, and do the right thing for their shareholders and employees, by getting patents but refusing to aggressively use them against other companies. (Nobody is forcing you to police your gameplay patents — but at least other companies will be less likely to come after you for violating their gameplay patents, given the possibility that you might retaliate.) But again, small developers really can’t afford to develop a large patent library, so this advice isn’t terribly useful to them.

Prisoner’s Dilemma

Ernest cites an article on patents by my friend David Sirlin, calling it “by far the best Gamasutra article on the subject.” But I think Ernest may have misinterpreted a key portion of the article. David wrote “There’s no hope of reform coming from companies adopting different behavior. Companies are merely playing the game with the broken rules presented to them. Reform must come from lawmakers who restructure the rules of the patent office.” This is a resounding echo of the point I’m trying to make — companies cannot be expected to behave in a manner that is inconsistent with the (broken) rules of the business environment in which they operate. It just doesn’t make sense for them.

This is a prisoner’s dilemma. And in a prisoner’s dilemma, it’s pretty clear what happens to the nice guy who acts “on principle” when he can’t necessarily trust everyone else in the group. You guessed it — he finishes last. I certainly won’t pretend the more likely outcome is satisfying. In a prisoner’s dilemma, everyone suffers somewhat — the ideal outcome can only be achieved by everyone playing nice, which rarely happens. There are too many companies in the game industry, and too many of those already have nukes.

Productive steps forward

Ernest wraps up with the following: “The only way a gameplay patent can make someone rich is by patent trolling — waiting for some party to innocently infringe on the patent and then suing them. And that’s not a way that I want to see this industry going. Our creativity is already under threat from enough directions without us terrorizing each other into mediocrity with the threat of lawsuits.”

I don’t want to see the industry go down this route, either. Gameplay patents almost certainly do hinder innovation (I won’t get into debate over whether or not they technically should exist. They do exist today, and that’s all there is to it.) So here’s what I’d suggest — and to be clear, this is just my personal opinion, aka I do not speak for Microsoft:

1) The game industry, led by organizations such as the ESA and IGDA, should band together and lobby for changes to patent law. That is something individual companies can do, as part of a whole, without undue risk to themselves.

2) The largest game companies should join together and announce they they will only litigate gameplay patents in a defensive manner; i.e. if someone sues them for gameplay patent infringement, they are free to fully retaliate, now or in the future. Otherwise, they will refrain from legal action. This would hopefully help reduce some of the dampening effects that current patents have on creativity.

Obviously, this plan isn’t perfect, but it’s a start, and it feels less hopelessly idealistic to me than a passionate cry for companies to refrain from getting patents altogether. Thoughts?

As I mentioned several months back, my friend Ethan Mollick and I are writing a book tentatively titled For Fun and Profit: How Games are Transforming the Business World. As our publisher’s deadline approaches, I’d like to occasionally bounce early draft excerpts off of you all in hopes of getting useful feedback. And, to be honest, I find it difficult to maintain this blog and write my book simultaneously, so I’m cheating a little bit. :-)

My first draft excerpt has nothing to do with business, per se. It tackles the thorny issue of games and violence. Ethan and I feel that we cannot ignore this issue if we want our book to be taken seriously by a broad range of readers. But we also don’t want to get mired in the issue — after all, there are so many other things we need to cover! So we’ve tried to be brief, clear, and to the point. Tell me: did we succeed in getting the point across?

Games and Violence

Games have been criticized as “excessively violent” for decades. Such criticism first reached fever pitch in 1992, when a popular game called Mortal Kombat enabled players to gruesomely slay an opponent by, for example, ripping off his head and holding it in the air while the spine dangled below. At the time of its release, Mortal Kombat was considered visually stunning, but its graphics pale in comparison to those of modern games. As the graphical fidelity of video games has improved, various social, professional, and governmental organizations, as well as high-profile politicians like Senators Hillary Clinton and Joe Lieberman, have expressed increasing concern over the potential impact of “realistic” interactive violence on children. These fears have been intensified by reports from organizations such as the American Psychological Association, which have claimed to link violent games to increased aggression inside and outside the laboratory¹.

These criticisms have been rebutted by a variety of prominent independent academics and organizations. Most notably, the American Sociological Association (ASA) and British Board of Film Classification (BBFC) recently issued reports that seem highly supportive of the video game industry. The ASA noted that in the 10 years following the release of games such as Doom and Mortal Kombat, homicide arrest rates among juveniles fell by 77%², an especially notable figure given that videogame usage skyrocketed during the same timeframe. More notably, the ASA found that much of the research employed against video games had decontextualized violence. In the words of the report, “Poverty, neighborhood instability, unemployment, and even family violence fall by the wayside in most of these studies. Ironically, even mental illness tends to be overlooked in this psychologically oriented research. Young people are seen as passive media consumers, uniquely and uniformly vulnerable to media messages.” Likewise, after performing its own extensive research study, the BBFC found that, “far from having a potentially negative impact on the reaction of the player, the very fact that they have to interact with the game seems to keep them more firmly rooted in reality. People who do not play games raise concerns about their engrossing nature, assuming that players are also emotionally engrossed. This research suggests the opposite; a range of factors seems to make them less emotionally involving than film or television.” This conclusion – that video games might actually exert less influence on aggression than film or television – is especially remarkable in light of the importance and charter of the organization that produced it.

But perhaps the most important argument against critics of violence in games is simply that games have a prominent rating system, much like movies do. That rating system can be used by parents to filter the games they are comfortable exposing their children to, an acceptable solution given that 90% of games are purchased by adults over the age of 18.³

¹ http://www.apa.org/releases/videogames.html
² http://www.asanet.org/galleries/default-file/Winter07ContextsFeature.pdf
³ http://www.theesa.ca/facts-gameviolence.html

I watched This Film Is Not Yet Rated a few days ago. Very interesting documentary (if “preachy”, but aren’t they all?) I recommend that you see it. All the issues raised in the film can be applied to the video game industry, and all are worth discussing, but I want to talk about just one, brief part. In the film, one person argues that (and I’m paraphrasing here): “violence with no gore should be reserved for adults, who can intellectually handle the fiction of it. Violence with realistic gore is what should be considered safe for kids.”

I’m not a psychiatrist. I don’t have kids. I can’t claim that I have a deep understanding of what does and does not negatively impact child development (beyond the obvious things — lack of affection, lack of education, lack of sustenance, etc — stuff we as a society manage to ignore every day in favor of more sensational news.) All that said, this argument struck a cord with me. Let me explain.

The Milgram and Stanford prison experiments

For years, I’ve felt that we shield our children (and ourselves!) from the very information that could spare us from repeating the worst of history’s mistakes. My favorite example has always been the brilliant Milgram experiments. (If you are not familiar with this, you must click that link!) Milgram’s work, along with the Stanford prison experiment proved (to me) that the vast majority of human beings, even those living in a free, “enlightened” place like the USA, have the capacity for great evil — and it doesn’t take much to expose that capacity.

So what’s my point? Well, the first time I learned of these experiments was during my freshman year of college, when I saw two video documentaries about them. Many people will never see these documentaries or learn of them. I think that’s a crime. Every single high school student should be required to watch and write about this material. (Maybe even junior high school students — after all, that’s the time when school bullying starts to become really nasty. Maybe this would help.) Teaching kids about tradgedies like the Holocaust and the Rawandan genocide is not enough. It’s too easy to learn of those things and think “wow, neither I nor anyone I know could ever be a part of something like that.” We need to teach our children that it isn’t that simple.

(Side note: my wife happens to work for an organization called Facing History which teaches kids to think about these issues. It must be working, because I’m writing this article.)

Truth in advertising (and entertainment)

Now to cut closer to home. In general, I think that we overly shield our children (and ourselves) from the truth about violence. I’m not arguing that every violent game should accurately depict reality… but perhaps a few more should.

I will never forget the first time I saw Saving Private Ryan. Not because it was a great movie, but because it literally turned my stomach. The movie recreates the storming of Normandy; at the time, it was the most honest depiction of brutality and suffering that I had ever seen. I would contend that most people cannot watch this movie and, at least temporarily, remain enthusiastic about war. (Or perhaps, anything less than the most noble and necessary of wars.)

Saving Private Ryan put violence to good use. It absolutely changed me (for the better, I hope). How many games can you say that about… at least in this context?

How many games make you suffer heart-wrenching wails of fear from your victims before you hurt them? How many games make you stomach the broken sobs of the dying? Or for that matter, the agony of their surviving friends and relatives? In other words, how many games make you feel sorry for hurting someone? (I imagine a thousand voices screaming Bioshock at this juncture. It’s a start.)

A different spin on “everything bad is good for you”…

We as an industry and we as a society need to rethink our attitude towards violence in television, movies, and games. This simply isn’t a cut and dry issue, as so many people (on both sides of the isle) like to pretend it is. Violence in media is not obviously bad, and not obviously innocuous. We have a constitutional right to express violence in our art (as well we should), but that does not give us the right to do so without reflection.

Some media really is “too violent” for young people. And some media… some media just isn’t violent enough.

Via Joystiq, an interesting controversy: id co-founder John Romero has accused the modding community of hurting the game industry by exposing or introducing inappropriate content (i.e. nudity) in PC games. His post was in response to the ESRB’s re-rating of Oblivion (which happened after a nudity mod surfaced.) John’s exact words: “modders are now screwing up the industry they’re supposed to be helping.”

There are a number of interesting comments on John’s original post which you may wish to read. Meanwhile, this raises a couple issues that I’ve been meaning to write about:

Whose Side Are They On, Anyway?

When consumers decide to create content for a game (or anything else), they’re doing it to indulge their own creative impulses, and/or to share something with friends, and/or to gain notoriety, and/or other reasons that have little to do with “wanting to help the industry” (or the developer, for that matter.) Let’s not kid ourselves: the guys who made Counterstrike didn’t do it to make Valve rich… that was simply a nice side-effect.

Modders (and other creative consumers) are not industry proxies, nor are they free labor. Some may feel real loyalty and affection for the developer of a game, but others may simply be looking for a particular tool at a particular moment. Heck — some may even be looking to satirize a hated developer or publisher, and you’ve just provided them with the necessary engine!

Consumers are going to produce boring stuff. Bad stuff. Broken stuff. Morally and/or legally questionable stuff. They will subvert games for their own purposes: to make political statements, to embarrass their friends, and to indulge “inappropriate” fantasies. A game developer ranting about this is the equivalent of a pencil maker ranting when customers draw dirty pictures. Get over it.

The nude skins in Oblivion were exposed by modders, not introduced. The Hot Coffee functionality in Grand Theft Auto was similarly exposed, not introduced. The developers of these games left themselves vulnerable to a negative political climate, and are suffering the (overblown, unfair, but nevertheless inevitable) consequences. Do not blame the modders. Instead, do what you can to keep things “clean” on your end, then make it clear that mods are independently-created works that you have no control over.

User-generated content extends the life and profitability of a game, and can occasionally result in great, industry-changing works. A vibrant, creative modding community is one of the best things a game can have. Most developers get this. Those that don’t will find it increasingly difficult to compete in an environment characterized by higher development costs, greater competition, and fragmented audiences. You cannot out-create the public on a regular basis, and you will have trouble beating the companies who embrace the public more fully than you do.

Resistance is Futile

Technology is making it easier and easier for consumers to modify all forms of media, not just games. Savvy consumers are inserting all kinds of things into their favorite movies and TV shows on a regular basis. This trend will only intensify in the coming years as startups and large conglomerates alike try to cash in on user-generated content and content-creation tools. (I can’t go a month without hearing a new UGC plan from a startup or VC!) And, as geographic boundaries continue to fall by the wayside, yet more user-generated content will be exposed to the American public, and yet more people will be offended and delighted. Cultural clashes are inevitable. (As one commenter on John’s post noted, topless figures don’t raise eyebrows in Europe.)

The point is: you couldn’t stop consumers from modifying games (or movies, or anything else digital) even if you wanted to. They will find a way because there are hundreds of millions of them and (at best) thousands of you. They have every incentive to break down walls, because entertainment is what ties people together in this day and age. You may know nothing about the staggering throngs of people you meet in the real and virtual world, but chances are, they’ve played Halo or watched Star Wars. Mods, maps, and other UGC are a way to connect with those people, express yourself, and maybe even gain a bit of fame. In an increasingly digital and suburban universe, this means everything.

The current console business model has been established for long enough that most of us take it for granted. Develop great hardware, sell it near or below cost, then generate profit by taking a cut of the revenue from all future game sales. If nothing else, this gets consoles into more homes, which benefits everyone in the long-term. But what would happen if the model were somehow disrupted?

I started thinking about this when I found out that the EU had voted to ban printer manufacturers from forcing consumers to buy their own-brand refills. The business model for printers is very similar to consoles: sell the printers cheaply, then profit from ink sales. (The major difference is that console makers don’t completely lock out third parties; they just exercise quality control and take a big cut of profits.)

The EU justified the vote in part by claiming that it would reduce “electroscrap”, but lawmakers must have realized that they were putting a giant industry’s business model in some jeopardy. (I suppose they didn’t lose much sleep over this, since none of the major printer manufacturers are based in Europe. Uh oh — neither are the console companies!)

This isn’t an isolated occurrence. Europe has, in general, always been less friendly to corporate acts of protectionism. For example, French lawmakers recently approved a bill that would require Apple to open the iTunes music format, breaking the exclusive connection between iTunes and iPod. Apple immediately announced that it would abandon the French market rather than comply. But if this were an EU law, it’s less clear that Apple could react so forcefully.

And, of course, we’re all familiar with the way the EU has hounded Microsoft to share information about Windows protocols and code. The EU has justified its efforts by citing Microsoft’s dominance of the OS market. So what might happen if one console maker ever managed to resoundingly defeat the others? Especially if that maker were Microsoft?

This is all wild speculation, of course. I’ve never heard or read anything that suggests imminent EU action, or even preliminary investigation. But as consoles become ever more central to digital life, it’s worth thinking about how European agencies might react. Could they force console makers to accept any third party game onto the platform? Force alterations of the revenue model? Unlikely, but perhaps…

Presentation by John Geoghegan, Executive Director, The SILOE Research Institute (Former VP, Global Sales & Marketing, LucasArts)

It’s a very hostile environment out there. The Utah state legislature recently passed a bill by a landslide vote lumping violent games with pornography. Do you feel like a porn merchant? I don’t.

California, Michigan, Wisconsin, DC, Iowa, and Kansas have all passed or are considering laws like the one in Utah. These laws are unconstitutional, but that’s a technicality, people. We’re not making friends. I haven’t seen this much animosity since big tobacco told congress that cigarettes are not addictive.

It’s time for us to wake up people. We are in deep doo-doo. At the state and federal level, we’re in trouble. Hillary Clinton’s pushing her Family Entertainment Protection Act. Everyone knows hillary is a liberal, but conservatives can’t stand her, so she’s appealing to centrists with the family values issue. Republican moderates and soccer moms can relate to the violent games issue. It’s a safe and smart bet for her as a politician. It worked for tipper gore with the whole rap lyrics controversy.

We’re marketing games to a hostile environment. We have a bad reputation. We’re getting banned, fined, and pulled off the shelves. They’re crushing our product. Some of you think I’m exaggerating. I’m not. This is the perfect storm of circumstances, and we’re sailing right into it.

How not to market in a hostile environment? Basically, don’t do everything we’re doing right now. To be clear, I’m not complaining about the ESA. They’re probably still mad at me about the whole booth babe thing. For the record, I think the ESA is part of the solution, not part of the problem. But it can’t stop with the ESA.

We love video games, right? So why shouldn’t everybody else? Right now, we’re in a defensive crouch, and our critics are playing rope-a-dope with us. The best defense is a strong offense. I propose a 12-step self-esteem recovery program for the video game industry. It’s time we held our heads up high, brothers and sisters. We have nothing to be ashamed of. Games are incredibly fun, creative, and artistic. We should be evangelizing!

1. We need to promote our perfectly good rating system, put in place by the ESRB. Let’s promote the hell out of it and make sure everyone knows about it. It worked for movies and TV, it can work for us!
2. Evangelize the benefits of video games. Read Everything Bad is Good for You by Steven Johnson. Johnson says games help kids compete more effectively, and makes them more intelligent. Games require many hours of sustained concentration and problem solving. In a world where more and more kids are on ritalin and can’t concentrate, this is a major accomplishment!
3. We need to do more quantitative research with leading universities to prove the positive impact of video games, and to quantify the negatives. We need to do research with the Harvards and MITs and the UCLAs or whatever, and we need to share the good and bad news. When we quantify the negatives, it will help us dispense with most of the negative mythologies out there.
4. We need to make it clear that new media is NEVER embraced at the start. It was true for movies, radio, pulp magazines, comics; for every new music wave, INCLUDING Mozart, there was controversy.
5. We need to preach moderation and promote good parenting. Parents should be moderating their kids interaction with ALL forms of media — text messenging, internet, movies, etc. We need to get parents off our backs and onto their kids backs.
6. We need to benchmark against sex and violence in prime network TV and movies. The corpses, blood, sex, and nudity in popular media totally outshadow what you find in games! We’re not as far on the cutting edge as many people like to say.
7. Embrace the constitution. We have a right to make and market our product in an unregulated manner — or at least, not the manner some states are suggesting.
8. We need to lobby. Let’s make political donations, and play the game that everyone else plays. We’re either not paying enough or we’re not getting the results we deserve, because i’m not seeing it.
9. We need to harness our best spokespeople. People like and trust celebrities like Spielberg — let’s get people like him saying why they like and want to work on video games.
10. We need to demonstrate our most creative games. We’re more than just GTA. We need to show people that it’s not all about guns and boobs. Games like Katamari, DDR, Guitar Hero, etc. Not a gun or a boob in sight in Guitar Hero!
11. Put the problem in statistical perspective. “M” rated games are a minority of our product.
12. Be proud! You’re marketing people — so show more pride. Don’t be ashamed to say you like video games; just say WHY you like video games. The depth of talent and degree of committment and the hard work going into games is incredible. You have every right to be proud, so BE proud!

Via Gamasutra, a breakdown of the highlights from Take-Two’s 10-K report. Aside from the notable (but unsurprising) revelation that North Carolina and Connecticut may soon join Los Angeles in suing over Hot Coffee, what I found interesting was information regarding the acquisition prices of Firaxis, Indie Built, and Irrational Games.

Apparently, Irrational (a respected studio about to release the much-anticipated System Shock 2) was worth between $6.2M and $10M, depending on future performance. Firaxis (also respected, but older, and with claims to well-established IP such as Civilization) went for $26.7M, a significant portion of which is also dependent upon future performance. Indie Built (Top Spin, Amped) settled in between the two at $18.5M.

So, does this mean that Sid and Civ are worth approximately $17M? ($26.7M – $10M). Or does it mean nothing more than “Take-Two will pay whatever it takes to cease being ‘Just the Parent of Rockstar, Inc.’” ?

Via Gamasutra, news of a squabble between EA and Ubisoft over the latter’s habit of asking employees to sign one-year non-competition agreements. Says EA: “In the spirit of creative freedom, economic emancipation and workers’ rights, EA has in fact accepted the application of an employee who had been working at Ubi Soft…”

A bit bizarre hearing the industry’s 800-pound gorilla complain about competitive practices. (Was EA acting “in the spirit of creative freedom” when it inked an exclusive agreement with the NFL, torpedoing any franchise that competes with Madden in the process?) Irony is alive and well.

Note to future Ubisoft employees: a non-competition clause (like most things in an employment offer) is negotiable. Ubisoft has the legal right to request that you temporarily restrict your future employment opportunties following termination of your relationship with Ubisoft… and you have the right to request a higher salary, bigger bonus, and/or a significant guaranteed severence package (etc) in exchange for sacrificing some of your precious liberty. Capitalism cuts both ways. ;)

Terra Nova just posted an article about a recent change in Second Life that has effectively devalued the property of many SL denizens. The article quotes a lawyer who cites established legal precedent to explain why Linden Lab (developer of SL) may be at legal risk in this (and related) matters. The basic argument: LL gave users good reason to think that some virtual land plots are worth more than others, so LL can be held liable for actions that devalue the land, no matter how many waivers users agree to when playing SL.

This is just one of the many unresolved legal issues popping up for MMOGs, and especially MMORPGs. I couldn’t find a good, succinct list online, so I’ve compiled one:

1. What happens when one player steals another player’s property?
2. What happens when players generate content that infringes upon the copyrights or trademarks of real-world companies? (Here’s an example other than City of Heroes). For that matter, what happens when one player copies another player’s work? Can they sue each other, and/or the developer?
3. What happens when players (especially underage players) engage in “legally indecent” acts? Can EA (developer of Sims Online) be sued for letting a ten-year old operate a virtual brothel? Can it be sued by players who suffer real financial damages at the hands of a virtual mafia?
4. Can developers be sued for impeding free market forces that generate real monetary value for players? (An especially interesting question, given that those forces are the key to many other potential liabilities on this list).
5. What forms of gambling are permissable in an MMOG? Is it really legal for me to play slots in Second Life, given that SL currency has real world value?
6. Do players have a right to free speech and expression? Can game EULAs contain (and developers enforce) a morals clause, like those in some employment contracts?
7. At what point (if any) does a developer become liable for failing to prevent players from harrassing other players? What constitutes sexual harrassment?
8. If virtual property has tangible value, how badly does a player need to violate a game’s EULA before a developer may evict them… without compensation for their virtual property?
9. Can players use legal means to prevent the deactivation of an MMOG, or to force developers to open source a game prior to deactivation? (i.e. to protect the value of their property?)

I wonder how long it will be before the first in-game court system pops up in an MMOG….

PS. If I’ve missed any notable legal demons, don’t hesitate to comment.