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In light of recent reports by WoWInsider (1) (2) that Blizzard has filed countersuit against Michael Donnelly, owner and founder of MDY Industries (maker of WoWGlider, popular but highly controversial automation software for World of Warcraft), I thought it would be a good opportunity to examine some of the compelling issues surrounding this case set to begin initial proceedings in Federal Court early this spring. Donnelly asserts that his business has in no way violated any rights owned by Blizzard who has in fact created “an actual controversy” through accusatory “threats and actions” (See claim). Blizzard has responded by reasserting such allegations ranging from tortuous interference with contracts, copyright, DMCA and trademark infringement to “illegitimate...cheating, scamming and exploit” (See Counterclaim).Yet upon closer examination, it appears that neither side has been particularly straightforward in their accusations. The legal game at its finest.     The story begins on October 25, 2006 when three Blizzard representatives allegedly arrived “unannounced” at Donnelly’s residence and place of business in Phoenix, Arizona. It is believed that among these representatives were an attorney, a vice president of Vivendi and a private investigator. According to Donnelly’s complaint, which interestingly enough was filed by his attorneys later that same day, Vivendi’s representatives “expressly threatened” to “file a complaint against MDY if Donnelly did not capitulate to their demands” (2.23-24). Judging by Blizzard's complaint, which surprisingly was not filed by Vivendi’s attorneys until February 20, 2007, these demands probably included shutting down the WoWGlider website, relinquishing the program’s source code to Blizzard, and monetary relief for financial “damage” caused by the program’s use. This is affirmed by an interview with Marcus Eikenberry, a close friend of Donnelly and possible collaborator (see The Escapist). This series of events raises some interesting questions concerning the extent to which negotiations have been taking place. First, the rapidity with which Donnelly filed suit suggests that he and his attorneys had already been in contact with Blizzard for quite some time and had prepared to go to court when and if negotiations had failed. However, this may not be the case judging by the rushed poor quality and minimal extent of the complaint. Next, the four month time delay before Blizzard responded to the initial complaint is unusual in this modern era of fast track court proceedings and suggests that somebody, mainly Donnelly, was engaged in settlement negotiations as the plaintiff (Donnelly) is responsible for serving the defendant (Blizzard) and once served, there is a twenty day file response period for federal cases. Yet to what extent have negotiations been taking place? One can only speculate...     While negotiation issues surrounding the case are food for thought, tremendous implications regarding EULA and TOU enforcement are potentially at stake. Blizzard has argued that by selling WoWGlider, MDY has “induced, caused, or materially contributed to infringing activity” on seven accounts: 1.) Tortious Interference with Contract 2.) Contributory Copyright Infringement Under the Copyright Act 3.) Vicarious Copyright Infringement Under the Copyright Act 4.) Violation of the Digital Millennium Copyright Act 5.) Trademark Infringement 6. Unfair Competition 7.) Unjust Enrichment     Despite the partial merit of many of these claims, it seems that Blizzard is once again conflating contract and intellectual property law as one and the same in an attempt to persuade the court to codify their EULA and TOU. The court will hopefully make the necessary distinction between the two. While Donnely initiated proceedings in pursuit of Declaratory Judgement as to the legality of his business, Blizzard first and foremost seeks the court’s assistance as high-powered GMs– mere referees– to “protect the integrity of the game,” a practice I liken to youth sports leagues requesting local police to serve as referees in order to create better enforcement of the rules. This seems to be a longshot and asking a lot of our legal system. Blizzard bemoans, “Unfortunately, the gaming experience of legitimate players of WoW is under near constant attack by cheaters, scammers, and other wrongdoers seeking to exploit WoW for their own illegitimate ends.” (Paragraph 17) Yet does “illegitimate” necessitate the courts’ intervention? Doubtful. While a legitimate contract is legally binding, it seems WoW’s EULA and TOU are both overreaching and adhesive (ie trying to deny users the right to legal means to resolve disputes, prohibiting class-action suits brought against the company, etc). Regardless of whether or not the EULA is enforceable, in the end, it seems the most the court can do under current contract law is to rule that Blizzard does in fact have the right to ban players for “harmful” game play, but players do in fact have the legal right to break game rules in the first place (contract is not law, but rather governed by law to regulate behavior where law does not). This may work to legitimize Donnely’s line of business, as scary to some as this may seem.      In my opinion, the strongest case Blizzard has stems from DMCA violation, unfair competition and unjust enrichment to the extent that WoWGlider causes “significant [financial] damage” (Counterclaim paragraph 1) through circumvention of Warden, security software that Blizzard hides deep within the code of the game, to prevent “unauthorized access” to the “WoW gaming environment”. Yet even this seems highly questionable as Warden’s legality itself is doubtful, undermining claims of copy protection circumvention. WoWGlider also works completely separate from all WoW code. Although the legality of Warden itself is suspect, the idea that Blizzard is losing money is even more so. While Blizzard claims “great harm in the direct loss of revenue from terminated users, the loss of subscription revenue from WoWGlider users availing themselves to the cheat, and from the severe damage to the goodwill of the non-cheating population of WoW users” to what extent do such losses actually occur? I believe the crux of the case will boil down to answering this question as the burden of proof will fall upon Blizzard to provide the evidence. Accordingly, virtual world scholars will finally have some empirical data concerning the impact of farming, botting and all things RMT related. An accurate cost-benefit analysis will hopefully be possible. No more fabricated elasticities!     Meanwhile, one can always speculate. In an attempt to investigate claims of financial loss, it is revealing to examine the practices of WowGlider users, especially those who have been banned and their responses immediately after being banned. It is apparent from examination of the WoWGlider forums that many WoWGlider exiles, banned for “illegitimate” use of third party software immediately return to the game after having bought a new authentication key. Blizzard does not ban the user, but rather the account. All it takes is a new key to get back in the game. Users are even able to use the same credit card. Thus as one glider customer sums up quite nicely, “If Blizzard bans me, ah well, time to go out and get another CD key and start it all over again, not like I lost a lot of hard work.” Many gliders also recycle accounts of friends who no longer play. Some even have multiple accounts in order to glide on some and play “legitimately” on others. Either way, the net result is a continuous flow of subscription revenue to Blizzard as gliders continue to play WoW, albeit differently than “legitimate” gamers. Pages and pages of postings are filled with lists of all the accounts these users have had. It is common practice to post this list upon conclusion of one’s post. One glider customer named Rowley tops the charts with 8 “glided” accounts: ~~Glided~~ 1-60 Undead (Holy) Priest *BANNED* 1-60 Undead (Frost) Mage *BANNED* 1-60 Undead (Shadow) Priest *BANNED* 1-60 Troll (Fire) Mage *BANNED* 1-60 Troll Shaman *BANNED* 1-42 Undead Rogue (Melee classes aren't for me  So I gave up on this one  ) *BANNED* ~~Gliding~~ 1-46 Troll Hunter *BANNED* 1-49 Tauren Druid *BANNED* Revenue Generated: $20 x 8 accounts + $15 subscription x 12 months = $340 or $28.33/month @ 12 months.*   This is almost Double what ordinary gamers pay. *This is a conservative estimate of the time it takes to level 5 accounts to 60 and 3 to the 40s. One study (Ducheneaut, Yee, et al.) estimates that it takes an average of 15 days of cumulated play time to reach level 60 through normal playing. Assuming that using WowGlider is about the same it should have only taken 4 months to perform the above feat. Yet with all the banned accounts and the time it takes to purchase new accounts and configure WoWGlider, 12 months seems reasonable.         This extensive list of accounts as well as numerous others suggests that gliders are in fact hardcore revenue generating machines being exploited by Blizzard for financial gain, undermining claims of lost revenue. The average accounts per glider comes to about 3.48 accounts as calculated from the 27 gliders that listed their accounts on the WoWglider forums. This translates to about $20.80/month or $249.60/year about 33 percent more than gamers with a single account. Yet this estimate could be too high as it is unclear in all circumstances whether or not the list represents accounts or characters or a combination of the two. Thus these numbers should be taken with a grain of salt, considered merely on the basis of the questions they provoke, mainly to what degree does Blizzard suffer financial loss?     Furthermore, before the above claim can be validated one must consider the extent to which traditional gamers are turned away by Gliders’ varying degradation of game playability? To what extent does botting, gold farming and RMT quantitatively turn away the average gamer? That is, how many players have actually quit (ended their subscription) due to these activities. Based on my own experiences, I would be willing to bet that such activity is a minor factor, amongst greater deterrents. Atop the list are cost, time-commitment, content, grouping and guild related issues. Nonetheless, it will be interesting if Blizzard can convince the court that WoWGlider significantly harms profit. That said, Blizzard has tremendous financial incentive to ban people in light of knowledge that they will come back– and in droves. But what does this suggest about their business rational? Why would Blizzard want to sue MDY if WoWGlider does not in fact harm their bottom line? The answer, as it usually is with developers, is power. It is evident that many gliders are playing WoW as much if not more than those who do not use it, suggesting an emergent style of play that Blizzard seeks to further marginalize through litigation. Blizzard wants to micro manage how gamers play World of Warcraft. Perhaps gliders do cause harm to the WoW gaming experience, but Blizzard’s solution to this externality is exploitive rather than beneficial to the whole of their gaming community. What easier way for a company with loads of money to get rid of a pesky problem than through the courts? Compare this with Sony’s introduction of server specific Station Exchange to deal with similar problems of real money trade in Everquest II. Rather than employing systems of exploitation and litigation, Sony has provided these gamers a means to buy and sell items as they would like. The result has reduced customer service costs and generated a fair amount of fee revenue. More importantly, however, Sony has provided gamers a useful money generating utility that maximizes fun for both buyers and sellers. Blizzard could easily combat their boting and RMT problems by opening a private server or two where such activities are permitted to obtain a similar result with less malfeasance. Yet Blizzard’s exploitive tactics to combat a similar problem undermine claims of financial loss and point to poor customer service relations, leading to numerous complaints filed with the Better Business Bureau (see here).      Although it would seem surprising if Blizzard did not ultimately win the case given the nature of their available resources including backing by high ranking Vivendi officials, private investigators, and high powered DC attorneys and the very nature of the automation activity in question, many of Blizzard’s claims of financial loss caused by WoWGlider are not only questionable, but dishonest and unfounded. World of Warcaft continues to expand, breaking numerous sales records for its latest expansion The Burning Crusade and toppling previous subscription records. Yet bullying litigation is all part of the game Blizzard loves to play. After all, escaping the grind isn’t easy, especially in face of substantial systems of exploitation. Brain Food                          2007 Ludogrind All opinions expressed herein are solely those of Lavant All company and/or product names and logos are trademarks of their respective companies