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Analysis: Despite Ruling, Threats Remain For The Games Industry
Analysis: Despite Ruling, Threats Remain For The Games Industry
June 27, 2011 | By Chris Morris

June 27, 2011 | By Chris Morris
More: Console/PC, Business/Marketing

There's plenty to cheer about today in the video game industry -- and for good reason.

The definitive Supreme Court ruling that video games are entitled to First Amendment protections is something developers, publishers and industry backers have been actively trying to secure for years. Achieving the goal is laudable, but it's not the end of the fight -- not by a long shot.

Critics of the video game industry, like Leland Yee, are being forced to lick their wounds right now, but despite the bravado of the ESA, they're not likely to go away.

"We respectfully disagree with the Court when it comes to their analysis of the First Amendment rights of children and families," said James Steyer, CEO of Common Sense Media. "This is a sanity issue, not a censorship issue. If parents decide a violent game is okay for their kid, that's one thing, but millions of kids are not able to judge the impact of ultra-violence on their own."

"Today, the multi-billion dollar video game industry is celebrating the fact that their profits have been protected, but we will continue to fight for the best interests of kids and families. Moreover, we look forward to working with national and state policy makers on another common sense solution in the very near future."

The "we're not finished yet!" rallying cry of parties on the losing end of the legal spectrum is nothing new -- and while it's certainly not something anyone should discount entirely, there's another looming political threat that could be just as dangerous to the industry's bottom line -- and has nothing to do with First Amendment issues.

"I don't think this puts an end to it, " says Dan Offner, a partner with Loeb & Loeb, who specializes in the video game industry. "It may put a pin in it for a short period of time, but I see the regulation of mature content with respect to minors as a hot button issue for the Federal Trade Commission and the various state governments."

To fully grasp that threat, it helps to get a little historical perspective. In May, Disney-owned Playdom paid $3 million to settle charges it had violated the Children's Online Privacy Protection Act. The company was accused of illegally collecting and disclosing personal information from hundreds of thousands of children under age 13 without their parents' prior consent.

And as gaming companies continue to expand their footprint and increasingly use digital distribution methods -- including social networking games and mobile titles -- privacy is likely going to be one area where game industry opponents turn their attentions.

"I think the next big thing on the horizon is privacy and security," says Greg Boyd, an associate specializing in entertainment, media and publishing with the law firm Davis & Gilbert. "I think you can take a look at what's recently happened in the game industry with the hack attacks and we're going to have to pay a lot more attention to that moving forward. ... This is the very same thing that happened with Playdom. Children are our most sensitive area."

"It's less about the content in the online environment as it is in fair warning and fees," adds Michael Zolandz, partner at SNR Denton. "I think that's the big issue in the commission's context. It's not so much what children are able to access. It's hidden fees or circumstances where it's a free download that then smacks you with hundred of dollars in add-ons."

None of this, of course, should take away from Monday's court victory. Justice Scalia's majority opinion was firmly written to demonstrate how strongly the court felt that games deserved the same protections as other forms of entertainment.

That's hardly surprising when you think back to how aggressively he went after California's attorney during oral arguments for the case.

"What's a deviant -- a deviant, violent video game?," he asked at the time. "As opposed to what? A normal violent video game?" California's supervising deputy attorney general Zackery Morazzini answered yes to this question, clarifying that deviant would be departing from the social norms. Scalia quickly followed up asking "There are established norms of violence!? ... Some of the Grimm's Fairy Tales are quite grim, to tell you the truth. Are they ok, are you going to ban them too?"

It's about as solid a victory as anyone was hoping for. But being victorious in one battle -- even a monumental one -- doesn't guarantee you'll win the war.

"It's the end of round one, but round two is about to start," says Offner. "I don't see the industry getting a big breather."

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Jordan Salter
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"We respectfully disagree with the Court when it comes to their analysis of the First Amendment rights of children and families..."

Because they are somehow different than First Amendment rights for other people? Gosh, James Steyer, I guess we'll just have to take the Supreme Court at their word that they know more about constitutional law than you do. Don't quit your day job.

Stephen Horn
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"Because they are somehow different than First Amendment rights for other people?"

Actually, that was exactly the opinion from one of the dissenting justices. He went on at great length about the history of parenting in the United States around the time the nation was founded, concluding that adults of the time had never intended children to directly consume any form of speech without parental involvement. Therefor the First Amendment was never intended to apply towards children, and therefor the CA law was Constitutional.

Jordan Salter
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A legal argument based in the way popular society worked 2 centuries ago is not very convincing to me; nor, it would seem, the majority of the court.

This idea is beside the point though, since there is already a strict rating system in place (as well as the flat refusal of most retailers to sell mature titles to minors) that allows parents to filter the sort of games their children play, should they desire to be involved in that way with the mental development of their offspring.

This doesn't appear to be the case, however; it seems they would prefer the government to step in and censor media for them (again).

Darcy Nelson
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@Jordan: Reasonable minds can differ on the subject, otherwise the case would've never made it this far. It wasn't a unanimous choice, so clearly there was room for interpretation there.

Jerry Hall
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CA State Senator Leland Yee, who authored this bill, needs to write better bills. He wasted 300k of CA taxpayer money just on the trials courts alone, not to mention at the appellate level and at the Supreme Court. He wrote this bill shortly after the Hot Coffee mod and tried to ride the bandwagon on protecting our children.

Darcy Nelson
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Augh, this hurts my heart. Thats enough money to cover the yearly salary of 5 mid-range state workers.

Jonathan Murphy
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They need a law that prevents people from running for political office without first reading the constitution, recalling any section, and it's meaning whenever asked.

Joshua Sterns
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Dam straight this is only round one. Give the nut jobs enough time and they will find another avenue of attack.

Online content, purchases, and experiences are the easy targets.

PC: "My kid download Nude Raider (hehe boobs)."

Console: "My kid downloaded an arcade game that awards points for decapitations (boy did I tone that down)."

PC/Console: "My kid spent all my money on digital crap. That's not my fault."

PC/Console: "My kid just learned every insult known to humankind after one hour on Xbox Live."

Obviously all of the above should be regulated by the parent, and modern day gaming systems feature plenty of parental options. This doesn't mean parents will use them, or claim their kids are too dam tech savvy--finding ways around the parental features. was a good day for the gaming community/industry.

Cody Scott
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well for xbox lives defense i think the terms and agreement for live requires one to say they are at least 13 years old, and if a parent hasent taught their child to not say dirty words by the age of 13, i dont think you can blame xbox for it.

Yuliya Chernenko
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That's seems a little bit wierd. Of course I am not to judge, such cases could be called negative aspects of rulling form. So you have different court cases, some maybe stupud or even hilarious, in Russia it is even hardly a court, though game industry is still developing.

Luckely.. todays world is much more international than before, i mean if company would have some trubles in one country it can continue selling some copies in another one, untill problem is solved.

Mathew Doolan
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You got a good point the world is growing ever smaller due to technology and the growth of more intuitive social mediums. Gaming is one of those avenues that brings the world together one curse word at a time. I've learned so many curse words in other languages form playing XBox Live, and how could anyone not consider that international savvy. Heck I learned more than ten years ago how to tell a Chinese gold farmer where to go and how to spit out leather the next day. We have to realize that her ein America that all the corporations and industry don't revolve around us. We may have a large monetary decision on where games are heading, (And I know I've spent more on games than I should have at times), but as a hobby I love and a future career, it is important to remember the global outlook and those countries that are coming up out of the dust of economical chaos and becoming a buying powerhouse. Russia, China, south American countries are all primed for a technological revolution.

Christopher Engler
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If this now defunct law was shot down based on the First Amendment (which apparently extends to minors given the lack of agreement with Thomas's argument, even though minors don't have other rights like voting or gun ownership), does this mean that parents are violating their own children's Constitutional rights if they don't allow their sons/daughters to buy whatever games they wish? If so, it's a little ridiculous. If not, this could be California's next plan of attack.

Doug Poston
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"..does this mean that parents are violating their own children's Constitutional rights if they don't allow their sons/daughters to buy whatever games they wish?"


Just like parents are not violating their children's rights by making them go to bed.

This law *does not remove any parent's rights*, it just denies the government from passing a law that denies rights to minors.

Jakub Majewski
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I don't get it. What's the big deal? What are we celebrating here? It seems to me the industry has basically shot itself in the foot... with a rocket launcher. This "victory" gave the industry no benefits - instead, it will serve to raise a whole lot of suspicion about game industry hipocrisy ("yes, of course we have a rating system, of course we don't want this game sold to children - that's exactly why we just went to the Supreme Court to strike down a law preventing us from selling this game to children"). There was no inherent threat to the industry in the law that was struck down - but there sure bloody will be now.

1. The law that was struck down merely prevented the sale of certain games to minors. Why combat this? I thought the whole point of having a ratings system was to prevent the sale of certain games to minors? What problems or losses did this law cause for the industry, that we bothered to fight it at all?

2. The First Amendment... really? As has been pointed out already, the exact same logic that struck down this law should be used to not merely overthrow the games rating system as a whole, but to overthrow any ratings system. If the government can't restrict anyone from selling violent games to minors... why should retailers bother to enforce the ratings system? Why should cinema ticket sellers bother to enforce the movie rating system?

3. Of course, if the above applies to the First Amendment, it also applies to any other part of the Bill of Rights that doesn't specify age. So, yes - the above ruling sets a precedent that should, by any logic, allow five-year-olds to carry guns. Not because anybody actually wants to sell guns to five-year-olds, but simply because any law that would prevent such sales is now evidently unconstitutional.

4. Apart from law, of course, a sale also requires consent, naturally. A retailer does not have to sell anything to anyone... right? Well, not necessarily. Here in Europe, for example, we've had cases where people sued retailers or service providers for refusing a particular service, and winning, on the grounds that this refusal supposedly constituted discrimination. So, how long before sales people start selling 17+ games to anyone that asks, out of fear that they would be sued for violating kids' constitutional rights?

5. How long do you think it will take for the people who wrote this law to figure out all of the above - especially since it's basically been written in the dissenting opinion? The most natural answer on their part would be to start campaigning for a constitutional amendment - something that would actually specify at which age what constitutional rights apply. It would be perfectly natural for the constitution to specify that the right to free speech only applies to people over the age of 18. And yes, this amendment would get through - because it would be presented as something to prevent kids from getting into porn, not into violent video games.

So, yeah - congratulations, ESA. Your utter stupidity has just given the Supreme Court one more opportunity to throw its weight around, overstepping its rights and responsibilities to illegally restrict the executive branch. If the State of California had any guts, they'd ignore this evidently unconstitutional Supreme Court ruling, just as the federal government had done with one of the pro-slavery Supreme Court rulings back in the 1850s. But they will not. Instead, everyone will accept this, and it will become a legal precedent in a variety of other, totally unexpected situations.

And nooooo... of course not, pandering to judicial activism couldn't possibly ever come back to bite the industry in the butt. Never, ever.


Tyler Martin
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1) A law regulating what could be sold to minors puts the government in the position of deciding what's appropriate and developers and publishers are left to guess what they can get away with depending on which way the political wind is blowing. I'd also guess that major retailers like Wal-Mart may reconsider even stocking M rated titles if they could suffer hefty fines for selling them to minors, either intentionally or accidentally. Publishers may start to think twice about releasing anything with an M on the cover if that did happen and that would be bad for the industry, and for adult consumers such as myself.

2) It's in the industries best interest to enforce the rating system. There are enough people out for blood so to speak simply based on the existence of violent games, and that's with some pretty strong enforcement of the ratings system. I doubt any retailers or developers would want to face the blow back from not enforcing it at all. Negative consumer reaction alone should be sufficient to ensure this isn't an issue.

3) This is poor logic since guns aren't restricted based on artistic content, but rather that they can kill people and people below a certain age are generally not going to know how, or depending on their physical size, not even be capable of handling them correctly. In no way does this ruling impact on the legal right for a child to carry guns. You're comparing apples to oranges.

4) Again, this is poor logic. I somewhat disagree with the idea that anyone should have to provide service to someone they don't want to (if they are discriminating then in an ideal world word of mouth should take care of their business pretty quicly, though I realize this is unrealistic even in this day and age). That is the case here in Canada though it isn't in the states to my knowledge. That said, there's a big difference between not selling a game with a lot of violence to a 12 year old and not selling it to someone because their black. One is clearly immoral, the other is simply a case of requiring the parent to buy it for them. Nothing is stopping the child from getting the game in that case, except the wishes of their parents in theory. And since the parents have custody over them until they're 18 this makes it a non-issue legally.

5) This ruling isn't about wpplying a right to free speech to children, but a right to free speech for the people making games. They've deemed that the evidence and arguments for restricting the speech of developers wasn't sufficient to justify it. And until violent games are proven to actually damage the mental development of children (which I don't see happening), this was the correct call. There should be a very very good reason to limit anyones right to free speech and parents not wanting their kids to play violent games is not sufficient reason to limit the speech of developers. Demonstrable harm to society might get you there, but the evidence is not on your side with that argument relating to violent games.

And if my stance on this isn't obvious, I fully support this decision. If anyone has any criticism of my arguments or my understanding of US constitutional law though I'm happy to hear them. I don't claim to be an expert on the matter by any means.

Jakub Majewski
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Let me make sure my stance is obvious as well - I'm fully against this decision, because I think it makes laughing stock out of the American Constitution. And I have a great deal of respect for the American Constitution specifically because I'm looking at it from a distance - here in Poland, we come from the European continental (important distinction - the UK is different) legal tradition, where the citizen has whatever rights the government deems fit to grant it, as opposed to the citizens collectively deciding what restrictions the government can lawfully apply.

The problem I have here is that this is classic judicial activism - it's the judicial branch granting itself additional prerogatives, and taking them away from the legislative and executive branches. In this case, there was no reason for the Supreme Court to get involved, and the fact that they overthrew a state law based on some spurious First Amendment argument should be exceedingly disturbing. There's precious few things that the First Amendment cannot be used to justify.

I don't see why the industry should have a problem with this law in general - most likely all of the games affected would have been rated M by ESRB anyway, so making it illegal to sell these games to minors should have been right up our alley. However, had the industry deemed it so utterly necessary to fight this law, they should have gone about it in a totally different manner. Instead of going to the judges, they should have gone to the people. Getting a referendum on this issue would not have been difficult. But of course, to win a referendum, you actually have to persuade the majority, so you have to have a sound argument - which the industry evidently does not have here...

In regards to your responses to my points:

1. This is spurious. You could say the same thing about the ESRB rating system - gee, who knows what rating they'll slap on my game? Well, *I* know, because they've set forth some clear rules. Whatever makes you think the State of California couldn't set forth a clear guideline as well? They would actually have to, for this law to function - for much the same reason that you cannot ban alcohol sales without everyone having an understanding as to what constitutes alcohol.

2. Yes, it is in the industry's best interest to have a functional ratings system - and this ruling has effectively scuppered the ratings system in its entirety. It is now potentially unconstitutional to not sell an M-rated game to a ten-year-old.

3. Ah, but these are details that do not matter in the face of the law. The Constitution grants everyone the right to free speech, and the right to bear arms. It does not specify why one should be restricted to adults and the other should not. You can make up any argument you like to justify restricting firearms to adults (...and I can overthrow any of them by pointing out that there's ten-year-old farm boys out there that can handle a shotgun better than you, an adult, ever will), but none of these have any legal weight. The moment the court has ruled that the First Amendment applies for kids as well, it sets a legal precedent that can be used in any case regarding the restriction of other rights to adults.

4. Naturally, this is poor logic. I'm not saying it is right for the law to dictate that I must sell my services to anyone, with no right to refuse. What I am saying is that, however nonsensical it may seem, this is already happening.

5. If this ruling is about the right to free speech for the people making games, then... why did the Supreme Court even examine this case? It's evident to anyone that being prevented from selling a particular game to kids in no way restricts anyone's ability to produce this game, for much the same reason that a porn producer's free speech is not restricted by the fact that he cannot sell his products to minors.

To finish up, let me rephrase what you wrote a little bit. I'm quoting your response, with just some minor word replacements. I'm sure you still agree with your own words, though:

"This ruling isn't about wpplying a right to free speech to children, but a right to free speech for the people producing porn. They've deemed that the evidence and arguments for restricting the speech of porn producers wasn't sufficient to justify it. And until sexual content is proven to actually damage the mental development of children (which I don't see happening), this was the correct call. There should be a very very good reason to limit anyones right to free speech and parents not wanting their kids to watch porn is not sufficient reason to limit the speech of porn producers. Demonstrable harm to society might get you there, but the evidence is not on your side with that argument relating to porn."

In short - any legal restrictions regarding the sale of porn to minors have just become totally indefensible in court.

Doug Poston
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The tl;dr version:

The game industry had to overturn this law or face the real possibility of having to deal with 50 different laws from 50 different states to see if they can sell their game in the US.

States have local rights, but they are still part of the United States of America. Unless they succeed from the nation, they still have to follow the Constitution.

Jakub Majewski
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States, according to the Constitution, retain all the rights that the Constitution does not specifically grant to the federal government. And I do not believe there is anything in the Constitution that would specifically make it illegal for states to promulgate local sales laws. Aren't there states that allow gambling, and others that do not? Doesn't Utah ban (or at least limit, I don't know the details) the sales of alcohol? Why is this a problem? And if it's not a problem for the alcohol or gambling industry, why would it be an issue for games developers?

By the way, on the subject of Utah, the crazy First Amendment line of argument does raise another question. Is it legal to restrict the sales of alcohol to anyone? I mean, given that bottles have... you know, words on them, surely they also constitute free speech. Don't alcohol manufacturers have a right to express themselves to everyone as well?

Luis Guimaraes
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The human species always need to be against something. It's seems videogames are the new witches...

Kamruz Moslemi
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It would be fun to watch what would happen if one day chance whims this law to get passed. I doubt it would be the playing one's fiddle as Rome burns scenario that people make it out to be.

Harlan Sumgui
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I must be a statistical outlier because I'm in gaming and I don't want kids to be able to buy whatever they want, just like I dont want them to be able to buy/access porn. I cant believe I'm writing this, but I support Thomas' view. btw, this law was about restricting sales fo the games to minors, not the ability fo companies to create whatever games they want.

Doug Poston
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I think the majority of us don't want kids to be playing violent games without their parent's approval. We just differ on how this is best done.

I think the current system (ESRB and self-regulation) works better then any system the government has come up with.