Laws of Play

GA Passes Law Providing Tax Incentives to Game Devs

In an effort to increase incentives for entertainment developers to conduct business in Georgia, The Weekly reports that Georgia Governor Sonny Perdue recently signed into law the 2008 Entertainment Industry Investment Act. The bill creates a twenty percent tax credit for qualified movie, TV, commercial, video game, and music video productions created in the state of Georgia. Qualified productions that feature an animated promotional logo for the state are then eligible for an additional ten percent tax credit.

Government officials hope the new bill will create jobs and “jump start the Georgia film industry.”

The new bill replaces the 2005 Entertainment Industry Investment Act, which used similar incentives to introduce $475 million to Georgia’s economy from the television and video game industry. Previously, the television and video game industry were responsible for only $124 million of Georgia’s economy.

While numerous states provide tax incentives for in-state entertainment production, Georgia’s law is one of the few that supports the $17.9 billion video game industry.

Three Reasons Why Gamers Should Care About the ESA

Recently, the Internet has been abuzz with discussion surrounding Activision and Vivendi’s decision not to continue their membership with the Entertainment Software Association (”ESA”). Coupled with a rumored defection by LucasArts, gamers have begun to wonder if this is a portent of troubled times for the gaming industry’s premier trade association. While it is too early to declare that the ESA is “rapidly taking on water,” a continued decline in membership over the next year could signal trouble.

Overall, news of the Activision/Vivendi departure was met with a predominantly favorable response from gamers. While there was an occasional expression of concern for the future of the organization, the majority of gamers seemed to be bewildered with what the ESA actually does. As a result, many were proud of Activision and Vivendi for pulling out of an organization they viewed as being largely irrelevant.

Interestingly, complaints went beyond anonymous remarks from Internet users. Wedbush Morgan’s Michael Pachter chastised the ESA for being too passive since the departure of former president Doug Lowenstein. And, perhaps strangest of all, Mike Wilson, CEO of Gamecock Studios, recently released a snarky video announcing that he is running for ESA President.

Despite these complaints, the vast majority of hostility towards the ESA has come from gamers and journalists. The gaming industry, on the other had, has been largely supportive of the ESA’s efforts. Industry heavy-weights Capcom and Electronic Arts have come forth and shown their support for the ESA and Take-Two, a company in perhaps the best position to judge the ESA’s performance, has stated that it “supports the Entertainment Software Association, its leadership and its efforts on behalf of the industry” and that “Mike Gallagher has done an outstanding job as president of the ESA…” (hyperlink added).

The reason for the ESA having a fair number of opponents among gamers is not hard to cognize and was well put by Mike Musgrove of the Washington Post:

The [ESA] makes headlines on game news sites only when there’s been an anti-piracy crackdown or a new uproar over a game’s rating. Neither of those types of story tends to win the organization fans in the gamer community.

However, it is time for the ESA make headlines for entirely new reasons. It’s time for gamers to discuss what the ESA does and why it is so imperative that this organization continue to defend the interests of the gaming industry.

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Content of the “New” Video Games Ratings Enforcement Act

Time for a quick update that, due to its predictability, is dangerously close to fitting in the “not news” category:

The Library of Congress now has the full text of H.R. 5990, the Video Games Ratings Enforcement Act, available online. Unsurprisingly, the bill is substantively identical to H.R. 5345, a bill previously introduced by Rep. Matheson (D - UT).

It would appear that Rep. Terry (R - NE) replacing Reps. Renzi (R - AZ), Stark (D - CA), and McIntyre (D - NC) as the bill’s sole cosponsor and a pair of grammatical improvements are the only changes that have been made to the bill since it was first introduced on May 10, 2006. Reintroduction of a bill to the House is extraordinarily common and, hopefully, this bill will similarly be tabled or ignored.

GamePolitics Interviews Rep. Terry

Today is particularly busy here at Laws of Play, so most of our updates won’t be arriving until later this evening. In the mean time, GamePolitics has posted an exclusive interview with Rep. Lee Terry, co-sponsor of the Video Games Ratings Enforcement Act, which we discussed the other day.

In the GamePolitics textual summary, Rep. Terry seems to come off generally well informed on some of the issues surrounding game ratings. However, he was off-base on a few points and I still find the legislation to be misguided. Regardless, head over to GamePolitics for the full interview and stayed tuned to Laws of Play this evening and tomorrow for an onslaught of updates we have simmering on the back burner.

Retail Ratings Enforcement Improving

In light of the growing controversy surrounding the re-introduction of the Video Games Ratings Enforcement Act and Grand Theft Auto IV, Sean Bersell of the Entertainment Merchants Association (”EMA”) forwarded me some welcome news this morning: Retailers have shown “major improvements” in ratings enforcement.

According to the FTC’s latest nationwide “undercover shop” of movie, music, and video game retailers, only 20% of underage shoppers were able to buy M-rated video games. The FTC commented that this was “a major improvement from all prior surveys, and down from 42% in 2006.”

Among the retailers tested, EB/GameStop scored the highest and rejected “an impressive 94% of underage shoppers.” Wal-Mart and Best Buy came in second and third, respectively rejecting 82% and 80% of underage purchasers.

Interestingly, “big box” merchants such as Best Buy and Target seemed to be more strict about the sale of video games than other forms of media, a possible reaction to the negative spin on game retailers in the media. The FTC report stated:

Some stores had very different results for different media. For example, while Best Buy rejected 80% of underage buyers of video games, it turned away underage shoppers for PAL music only 47% of the time, R-rated movie DVDs only 38% of the time, and Unrated movie DVDs only 17% of the time. Similarly, Target refused to sell M-rated games to underage buyers 71% of the time, but refused sales of PAL music only 40% of the time, R-rated movie DVDs only 35% of the time, and Unrated movie DVDs in only 23% of the cases.

Read on for a complete breakdown of the FTC’s findings and the full press release from the EMA.

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Blizzard Turns to Copyright to Fight Cheaters

In a case that has been described as “pitting distasteful gaming behavior against an unsavory over-assertion of copyrights,” Blizzard Entertainment and Vivendi SA seek damages against software company MDY Industries for alleged tortious interference with contract and secondary copyright infringement. Blizzard claims that MDY’s program “Glider,” which is used by players to automatically level up their character as they go about their daily lives, not only illegally interferes with Blizzard’s End User License Agreement (”EULA”) and encouraging users to breach said agreement, but also makes MDY secondarily liable for copyright infringement.

While companies and individuals can be held secondarily liable for copyright infringement in a number of ways (contributory infringement, induced infringement, and vicarious liability), this liability is always contingent upon plaintiff proving that some sort of direct infringement occurred in the first place. Here, Blizzard claims that the portions of World of Warcraft (”WoW”) that are copied into RAM whenever a user plays the game are infringements. However, Blizzard “excuses” these infringements through the terms of the EULA. Therefore, whenever a user violates the EULA by running Glider, Blizzard claims that the copy of WoW loaded into RAM is no longer “excused” and becomes a direct infringement, which would entitle Blizzard to statutory damages.

So, what’s the big deal?

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Video Games Ratings Enforcement Act Redux

Variety and ABC News report that Representatives Lee Terry (R-Neb.) and Jim Matheson (D-Utah) introduced the “Video Games Ratings Enforcement Act” to the House floor today. The bill, H.R. 5990, was subsequently referred to the House Committee on Energy and Commerce. Substantively, H.R. 5990 mandates that retailers perform ID checks on purchasers of ESRB-rated “Mature” and “Adults Only” games. Retailers caught violating the bill face a $5,000 penalty, enforceable by the FTC.

Reactions to the proposed legislation have been mixed. Chris Anderson, owner of the Alexandria, VA Play N Trade store, said that he follows the Entertainment Software Association’s rules and will not sell any M-rated games to kids under seventeen. When asked if the Video Games Ratings Enforcement Act would affect his business, Anderson said:

It really wouldn’t change our life at all. It’s just a way for a politician to make a name for themselves.

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GTA IV Ad Controversy Roundup

The Internet has been rife with Grand Theft Auto IV stories as of late. It seems as though any website with a merely tangential relationship to video games has mentioned Rockstar’s blockbuster and many gaming-centric sites have turned into little more than Grand Theft Auto RSS feeds. With record-breaking sales, unprecedented critical acclaim, and GTA’s uncanny ability to agitate pundits and parents alike, it is no wonder that people are finding plenty to talk about.

Laws of Play has been laying low and avoiding most of the hype because all that has really happened is a lot of political posturing. Or, at least, that was the case. Yesterday, Reuters reported that Grand Theft Auto publisher Take Two Interactive filed suit against the Chicago Transit Authority (”CTA”) earlier this week. Take Two alleges that by pulling advertisements for Grand Theft Auto IV from public transportation and bus terminals, the CTA has breeched contract and violated the company’s First Amendment rights. The suit seeks an order for the transit authority to run the ads as well as monetary damages of at least $300,000.

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San Diego GOP Chairman: Video Game Pirate?

According to a lengthy article posted at The Raw Story, San Diego Republican Chairman and head of the state party’s budget committee Tony Krvaric is co-founder of Fairlight, one of the world’s largest and oldest software cracking rings. Krvaric, known online as “Strider,” started Fairlight in 1987 with two friends, “Black Shadow” and “Gollum.” The group of Swedish high schoolers quickly rose to prominence among online bulletin board users for cracking the copy protection on Commodore 64 games that Krvaric would “borrow” from his job in a Swedish game store. After the games were cracked, Krvaric and his friends would post the software to the Internet where it would be downloaded by other users for free.

The Raw Story chronicles Krvaric’s cracking accomplishments and Fairlight’s history, which includes setting up offices in California, recruiting new crackers, and selling a variety of goods from game copying devices to nonperishable foodstuffs.

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JT and GTA IV: A Match Made in Heaven

I typically don’t post an image without story behind it, but Dennis over at GamePolitics just posted a pretty spectacular picture.

I don’t know what it is, but I can’t help but chuckle when I look at it. Maybe it’s the look of triumph in Jack’s eyes; maybe it’s the laid-back atmosphere the picture is taken in; maybe it’s the fact that the subject line of the email containing the photo was “Evidence.” Whatever the case, I would like to thank GamePolitics for sharing.

Update: Larger (and possibly scarier) picture.