Posted by: Zach Smith
Licensing agreements appear in day-to-day life whether we know it or not. The proliferation of technology has individuals hitting accept on software license agreements before they even begin to think what it might mean for how they are able to use the software. In an attempt to lock in both the price and future value of their software and media, companies typically look to litigation for a way to keep software out of the hands of those not authorized to use it. However, sometimes litigation is not the easiest route.
Video games are no different than other software or popular media, and are becoming increasingly important in cyber law as they can now be purchased and directly downloaded. The direct downloading creates the same problems as any other software purchase because a “click” agreement to the license is still the standard operation. However, video games present a unique problem because of the possibilities within game-play. The best example is how video games like World of Warcraft and Diablo III have such a large player base, players have started to give actual dollar value to in-game items. The issue is that there is money being derived from their software yet they are not capitalizing on it, which begs the question of what happens next?
The answer is exemplified by Blizzard Entertainment’s decision to shut down the “auction house” for one of their recent games, Diablo III. The “auction house” has been an aspect of several of Blizzard’s most popular online games, most notably World of Warcraft. The action house essentially allows players to put items they find in the game up on an online auction house for other players to purchase with in-game currency. Issues first started to arise with the auction house idea in World of Warcraft because Blizzard underestimated the value of what they were offering.
The players in conjunction with the auction house had given much more value to items in the game than Blizzard anticipated. Items in the game began to gain so much value that the in game currency of World of Warcraft become worth actual money, similar to the uptake of Bitcoins recently but on a smaller scale. Individuals were actually making a living off of collecting the in-game currency and selling it in real life to other individuals. As any self-respecting software giant would do, Blizzard decided to step in only a few months after the release of Diablo III, deciding to shut down the auction house this year.
The “Auction House License Agreement” was essentially an attempt to set up a legitimate auction where individuals could spend real or in-game currency to buy items and Blizzard would take a percentage. (http://us.blizzard.com/en-us/company/legal/d3rmah_tou.html) This is not surprising considering Blizzard’s desire to capitalize on Diablo III’s auction house without having to litigate prior user agreement infringements. However, people have been reluctant to agree to the new agreement in order to use the auction house. With a decline in auction house activity Blizzard did what most software companies would do when not making money, shut down the auction house. With the auction house non-existent there is nowhere to spend the in-game currency so the value of the currency is essentially gone.
Blizzard could have litigated numerous license agreement violations by people selling “gold,” but in the end decided to stop the problem at the source. The exploitation of the currency in games as prolific as World of Warcraft and Diablo III is going to present the same challenges as trying to stop everyone from streaming movies and music. There are just too many people exploiting the system, so Blizzard chose the simplest solution to resolve the problem. If they are not going to be able to get a piece of the pie why should anyone else, right?