Posted on

Dazed & Confused, Not Shock and Awe

For 2009, here are my predictions:

The economy and strife, regulation and surveillance will dominate the agenda, with the burden of paying for everything from wars to bailouts right in the crosshairs: watch those advertising budgets boys and girls, the taxman cometh.

Privacy and advertising, long separated by passive print, television and radio, will continue to collide—Congress will either pass ineffective and inappropriate legislation because it’s too busy to pay attention, or will defer legislation another year because it’s too busy to pay attention.

Wireless and mobile technology will continue to make us say “wow” and will continue to miniaturize our lives, putting not just communication, but also our wallets, calendars, purchasing, entertainment and working tool kits in our hands, not our laps.

The use of wireless and additional licenses, spectrum and bandwidth will bring the FCC and the FTC colliding in their zeal to regulate, and they will either cooperate because they are too busy to fight or fight because they are too busy to cooperate. In either case, regulation, re-regulation and self-regulation will continue to increase, unregulated.

Marketing, promotions, new media, digital content and distribution platforms will transform gaming and interactive play into entertainment, education and information—giving us more choices, but continuing to blur the lines between advertising, entertainment and information.

Continue reading “Dazed & Confused, Not Shock and Awe”

Posted on

Japan Arrests Woman for ‘Killing’ Her Virtual Spouse

Last week, Japanese authorities arrested a woman for killing the digital avatar of her online husband—no, we didn’t make this up. Arrested in her home in southern Miyazaki, she was taken to Sapporo in Northern Japan. The woman became angry on learning her online husband divorced her. She used his ID and password to log onto the “Maple Story” interactive game to execute the virtual murder. Although not yet formally charged, she was arrested for suspicion of illegally accessing a computer and manipulating electronic data. Although the police thus far have no reason to believe she was contemplating any real world criminal act, she still could face five years in prison or a fine of as much as $5,000 if she is ultimately charged and convicted of the computer access and manipulation charges. Maple Story, like many interactive, online virtual world games, allow real world participants to create digital characters called “avatars.” While many virtual experiences are essentially sophisticated online interactive games themselves, even non-game based virtual worlds enable avatars to engage in social networking, relationships with other avatars, transactions involving the exchange of value, and the creation or deployment of intellectual property—content ranging from video programs to musical concerts to creating wardrobes for their avatars. Because avatars exist in a virtual, digitally created world, their owners often engage in activities they would never consider in the real world.

Continue reading “Japan Arrests Woman for ‘Killing’ Her Virtual Spouse”

Posted on

Cyber Attacks? It’s Not Just War Games Anymore

Is a cyber attack an act of war? Analysts reported that while the Russian military was acting against the Georgian republic, Georgian websites were also under attack. Cyber warfare can exploit security gaps to take control of civilian infrastructure, such as power grids, as well as government websites and military command and control operations. It has long been known that cyber-weaponry could supplement (and sometimes replace) traditional military activities. But when does a cyber-attack itself constitute an act of war? (We all appreciate the notion of “war” as a historical concept is and continues to change.) Tactics such as urban warfare, bioterrorism and suicide bombers have caused grave concern, not only over government’s ability to deter violent and damaging non-traditional acts of war, but also how to respond when they occur. A big challenge in the cyber warfare world is identifying who did it. In 2007, Estonia asked NATO to come to its defense when a cyber attack disabled government and bank websites. Apparently in 2008 we didn’t need a cyber attack to bring down some of our financial institutions (sorry, couldn’t resist). Question—how does one respond to a cyber attack—with bullets or chips?

Posted on

Are You For Real?

In the 1960s, Stanley Milgrim, then a psychologist at Yale University, conducted a controversial experiment. In an obviously controlled setting for the study, Milgrim and his associates directed their subjects to give ever-increasing electrical shocks to strangers whenever they gave the wrong answer to questions in a test of memory. The strangers were really actors pretending to experience pain and did not actually receive any jolts of electricity. The study, intended to measure how compliant people would be to obey authority figures, even to the point of inflicting pain on otherwise innocent individuals, was disturbing, to say the least. The subjects, despite some discomfort at first, continued to “shock” the test-taking actors. The experiment raised ethical concerns about subject study methodologies, among other things.

However, recently, Mel Slater, a computer scientist at University College London in England (with a joint appointment to the Universitat Politecnica de Catalunya in Barcelona), reproduced this experiment without running afoul of the ethical concerns that the original study raised. Mr. Slater conducted his experiment in a virtual world where test-taking “victims” were avatars whose expressions changed from happy to pained in response to the actions of participants in the study—much the same way the real-life actors did more than 40 years ago. Not only were the results astonishingly similar, but to the surprise of many, the real-life participants experienced increased heart rates and described feelings of regret or feeling badly about delivering electrical shocks—even though they knew the strangers on the other side of the screens were avatars and not real people!

Continue reading “Are You For Real?”

Posted on

Hey Baby, Remember Me? You Will.

Webkinz? Barbie Girls? Be-Bratz? Club Penguin? Never heard of these? Your 6-year old has. At a time when advertising and marketing to children is in the cross-hairs of regulatory agencies, virtual worlds are discovering that imagination can run wild in an environment where children—some as young as 5 or 6 years old—can shop, adopt pets, and play dress-up.

Remember virtual pets? You could purchase a small, self-contained computer (of course it wasn’t marketed as a computer, but as a digital companion) with names like Tamagotchi or Giga Pets—often with a tiny display that had the “pet’s” image.

Small buttons on the outside of the casing allowed you to feed your pet or wash it, and there were even pets that could interact with other pets (e.g., Digimon). If you didn’t treat your pet right it might even die!

Now toys purchased at retail stores—toys for young children—are showing up with flash drives which, when plugged into a computer USB port, unlock features and hold the keys to virtual worlds where children can play—in dollhouses, shopping malls, with pets and characters. Building brand awareness is critical for marketing-driven companies, and building brand awareness in young children who may carry the imprints into their teenage and adult lives…well, you know…. Next up, potty-training your virtual baby. Stay tuned.

Posted on

Content is King, but the Medium Is Still the Message

Recently lawyers have begun to debate the question of just how much control advertisers can exert when paying for product placements or branded entertainment before the line between First Amendment expression by the creative staff putting together the program and the financial subsidies from advertisers is crossed. Now, the Ninth Circuit has dealt with a similar question relating to the immunity that interactive computer service providers have typically enjoyed under the Communications Decency Act (the “CDA”). The CDA insulates service providers from liability so long as the service provider remains a publisher of information and content of others (there are exceptions, so the immunity is not blanket and you should always consult legal advice for specifics that apply to your situation). That said, a company that operates an online web service that specializes in matching roommates based on their preferences has been held in violation of the Fair Housing Act because a questionnaire put together by the company asks for certain demographic information that, when posted on the website, could be used by users and site visitors to discriminate against others. The company, Roommates.com, asked users to disclose information, among other things, about roommate preferences such as age, sex, children, etc. The Ninth Circuit held that although Roommates.com was immune as long as it was simply enabling the distribution or display of information provided by its members, when it became an information content provider, it lost immunity with respect to that activity and information. And by putting together the questionnaires and soliciting their preferences in response, Roommates.com was not simply posting content authored by users, but rather was eliciting specific information that could be abused and that might or might not have been voluntarily posted or disclosed absent the questionnaires.

Hmmmm…user profiles, play lists, segmented marketing, asking consumers to participate in promotions…this is an interesting test of the limitations of the CDA to protect and insulate interactive online service providers from liability. As social networks, virtual worlds and other digital arenas that don’t simply enable but also solicit or encourage certain information to be provided, and as web services become more targeted, focused and segmented to match consumer preferences, the immunity is likely to be tested further. Stay tuned.

Posted on

The Law of Unintended Consequences

China: A 30-year-old man in the southern Chinese city of Guangzhou appears to have died of Internet gaming exhaustion. He had been playing online for three days and was declared dead at the Internet café where he had been playing. Clinics have sprung up to treat “Internet addiction,” noting that children and teenagers often play online games or surf the Web for days at a time. China has more than 140 million Internet users, and a huge market for online games.

Poland: A bus driver in Slupsk, a city in northwestern Poland, was fired for sending 38,000 text messages on his employer’s cell phone. The driver, Leszek Wojcik, told reporters he wanted to buy a car if he won the 100,000 zloty prize ($36,000) in an SMS (text messaging) contest. According to the Slupsk city transport service, Mr. Wojcik ran up a bill of about 94,000 zloty ($34,000) in his losing bid to win, sending an average of 1,200 text messages per day at a cost of 2.40 zlotys per message. Among the lessons learned: promotions and advertising using SMS, streaming and mobile technology are extremely powerful.

USA: A U.S. federal judge didn’t recall how he spent $3,000 at a strip club. He apparently also forgot a few other things, such as using a credit card for either an Internet dating service or to pay for pornography—all reportedly while married; the marriage has since ended. At the trial, when the Judge was asked about the $150 credit card charges, he reportedly replied, “I’m embarrassed to be even talking about this. I think you pay extra to get certain features, such as if you upload a picture or—I don’t even recall.” Under the Constitution, federal judges are appointed for life, and while they are supposed to follow an official code of conduct, they can be removed from the bench for high crimes, misdemeanors, treason or bribery.

Posted on

Parallel Universe Spawns Parallel Legal Woes

You knew it had to happen, but are still surprised when it does. In what may be a first-ever, a lawsuit has been filed against a defendant that doesn’t really exist, over a non-existent furniture line. Yes, you guessed it, a bed with special embedded animations that allow participants in Second Life, the virtual reality world established by Linden Labs, to essentially recreate an adult film with their virtual persona—avatars.

For the past few years, Second Life’s approach to IP protection has been to allow players to keep rights to programs, animations and objects they create—although many of the tools (programming scripts, etc.) are Linden’s and are provided to enable players to build things in this virtual world. Much like user-generated content in the world of multimedia audio-visual works, creativity and innovation is creating virtual content by the boatload and creating virtual objects and businesses is not simply a recreational pastime, but also a source of entrepreneurial glee and money for many. Clothing, real estate, automobiles, virtually (pardon the pun) anything, becomes the object of virtual purchases, sales and licensing.

Well, the law has caught up with reality. One player, whose avatar is selling virtual items under the brand “SexGen” bed, is suing another avatar for selling fakes for less—undermining the business. Since you have no obligation to disclose your true identity in Second Life, who do you sue? Well, first you try to get information from Linden, presumably because their computers house the underlying registration and information that would disclose who is behind the knock-offs. But, if the alleged infringer has not registered a real name, credit card or other “real world” items to enable identification, you might only get an IP address.

So we’ll keep you posted on developments, but who knows where this will go. Will a court entertain the case? Will they discover the identity of the alleged infringer? Will copyright infringement principles apply in a virtual world? Perhaps the plaintiff will try to enjoin Linden from allowing or enabling the fake products, or send them a virtual Digital Millennium Copyright Act (“DMCA”) “take-down” notice.

Posted on

Interactive Gaming–To Boldly Go…

In a recent article in the Los Angeles Times, Michael Bay, renowned film director with cinematic blockbusters such as “The Rock,” “Armageddon” and “Pearl Harbor” to his credit, is quoted as saying, “I make world-class images. Why not put those images into a game?” Indeed! The new investor and co-chairman of Digital Domain, the effects studio evolving into a production studio, is making a bet on convergence—the application of digital technology to reduce costs and expand the horizons of entertainment and new media.

Remember watching those old cowboy movies and pretending you were the new sheriff in town? Did you secretly imagine you wielded an elegant light saber and might save the Galaxy with Luke Skywalker? How many times did you imagine yourself as Legolas, drawing an imaginary bow in the air to shoot an arrow and save Middle Earth?

But even in Middle Earth—where presumably there were no computers—there are digital effects. You trivia buffs will enjoy knowing that Orlando Bloom’s eyes are really brown. But as Legolas in Lord of the Rings, his eyes are blue, thanks to CGI technology. For example, watch Lord of the Rings: The Return of the King, and right outside the Black Gates, in a close-up, you can see his eyes are CGI blue. However, in a scene right after that, Gandalf is in the foreground and Legolas is in the near background—and Legolas’ eyes are clearly brown.

We love to be entertained, but we also love to play—play is the basis of leisure time, enjoyment, learning, and game and number theory. Play makes us active participants with interactive relationships and activities that are make-believe—in much the same way that motion pictures can move us with stunning visual sequences and transport us to places we might never see or even imagine in real life.

The computer game market represents a new—or rather a different—frontier. New motion pictures have spawned merchandising for decades—dolls, action figures, and stuffed animals, from Tarzan and Mickey Mouse to Spider-Man and G.I. Joe. In fact, product placements in motion pictures, which have gone mostly unregulated in the United States, have been used for years by advertisers to promote both reality in the movies and brand awareness to consumers. See the logo on an airplane taking off—someone paid for that. Picking up a soft drink can at the stadium with a familiar brand—someone paid for that. Watch Jack Bauer drive away or make a phone call—recognize that car or that mobile phone—someone paid for that. Do you really think Microsoft paid an estimated $6 billion for Internet advertising company aQuantive, because it does not understand the importance of convergence? Wonder why Apple Computer changed its name to “Apple”? Go to China or India or Brazil—which has more brand and name recognition, a MAC or the iPod? Which creates more buzz, the iPhone or a new operating system code named “Leopard”?

Continue reading “Interactive Gaming–To Boldly Go…”

Posted on

Internet Gambling – Hit Me!

On Oct. 13, 2006, President Bush signed The Internet Gambling Prohibition and Enforcement Act into law. The Act was actually tacked onto a piece of legislation intended to tighten security for the United States’ sea ports. The Internet Gambling legislation, originally a standalone bill, was attached as an amendment to the security legislation at the last minute. Although titled “The Internet Gambling Prohibition and Enforcement Act,” it is actually not an outright ban on online gambling. It is, however, a federal ban on banking institutions knowingly transferring funds to businesses or individuals that operate, conduct or are engaged in activities that are considered illegal under U.S. law. Thus, transactions involving the movement or transference of funds to businesses that are conducting gambling operations in states and areas where gambling is prohibited is now illegal.

The law requires financial institutions to develop and implement some type of transaction security system within the next nine months, so that fund transfers to institutions on a blacklist will automatically and electronically be blocked; presumably on the list will be those online gambling operators identified by the Department of Justice. That said, the Act is not specifically limited to gaming companies—although it appears that those are its initial focus and intended target. In the wake of passage of the Act, online gambling operators—many from the U.K., Malta and jurisdictions outside the United States—have already announced their withdrawal from the U.S. marketplace. Stay tuned as enforcement efforts start to make news.