Xbox Live 360.com. Games and Games.

In the latest LGJ, we take a look at the Online Pass and some potential unwanted consequences.

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On this week's LGJ, we talk about the interesting refund issue that has accompanied the PS3's loss of Linux support. Be sure to note, though, this is basically an advertising issue, not a discussion of Sony's EULA.

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This week's LGJ focuses on the FTC potentially targeting the EULA.


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This week's LGJ focuses on the announcement that the FTC is considering consumer protection related to digital rights management and what that could mean for consumers and developers.

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Recently, I wrote a piece on Joystiq which referenced the then still pending UMG v. Augusto suit. The verdict is in on that case, and it's a big win for consumer rights. The motion for summary judgment is available here, but I will summarize it for you. Promo CDs are in fact governed by the first sale doctrine even though they are never sold to the consumer. This means that, by extension, promotional DVDs and games are also covered by the first sale doctrine in the same manner. So long as the producer transfers title in those items to someone else, then that satisfies first sale. Should the producer actively recover the products, then first sale would not apply, but since these items are distributed without any intention of being returned to the producer, then it is considered sold.

The victor here is clearly the consumer. This means that if you get your hands on a promotional CD, DVD, or game, even one labeled not for resale, you can keep it or sell it on eBay without worry about repercussions from the game's publisher. More importantly, it prevents an expansion of the first sale doctrine, which could have limited your ability to resell games you've purchased at all. Game resellers, both those on eBay and the major retail chains, should be applauding this decision as it supports their livelihood.

This was a big win for consumer rights, and a big win for all of us as consumers.

I'm certain many of you, the readers, have seen the latest Jack Thompson coverage on Game Politics found here and here. Dennis was quick to point out the FTC provision about credit card ownership being adequate proof of age for online transactions, and the FoxNews contributor was quick to play the free speech card. However, there's an elephant in the room I'd like to address.

Everything Mr. Thompson has said about games applies to movies on DVD.

Anyone with a credit card can go to Amazon.com and pick up Saw I, II, or III (unrated, meaning the more violent cut than the theatrical one) just as easily as you can order Manhunt 2. The same applies to Best Buy, Circuit City, or whatever other entertainment online store you'd like to site. To the same ends, in-store id checks are equally lacking on these (and other) movie titles. While I haven't played Manhunt 2, I can only imagine the graphic content is probably on par with the Saw series, which is exceptionally brutal if you haven't seen the movies. Given that the research on the impact of media is mixed, and that movies have been found to affect young people like games by some studies, why ignore the movie industry?

There can only be a few answers:
1. Mr. Thompson is afraid of the people in the movie industry, as they would likely be viewed as "more powerful" than the game industry.
2. Mr. Thompson is giving undue weight to the unproven link between interactivity and a heightened impact.
3. Mr. Thompson has an unhealthy fixation on and unequivocal bias toward games, which cannot easily be explained.
4. Mr. Thompson's logic is flawed, for some other unexplained reason, so that he either ignores or actually favors violent movies. (Perhaps he is a Saw fan.)

The simple point being: If you would like to go on a crusade against the media, go on a crusade against the media, not one medium.

Ultimately, the decision should still be left to the parents, and the tools are in place for the parents to make those decisions. It is not up to the government, or Mr. Thompson, to make those decisions for society, parents who are failing to perform their duties as parents, or parents who are actively monitoring their child's media consumption. And if anyone is to be held responsible, it should be the inadequate parents, not the game manufacturers, game retailers, or game raters. I can only hope that the news media will tire of this issue soon, or that the American people will begin to realize that playing the "For the Children" card has reached a point where it should be accompanied by automatic scrutiny, as it is rarely actually being used to help the children anymore.

Last evening, my second Xbox 360 died, approximately 7 months after it arrived. I had a launch console, which died about 8 months ago, and was replaced by the recently deceased refurbished console. I know what you are thinking, "Join the club." Or "Yep, and it seems Microsoft is never going to tell you why."

However, Law of the Game is a site about video game law, and while my second dead Xbox 360 may seem like it has nothing to do with the law portion of that description, it works as an interesting lead in to a short post on the law of warranty and the concept of consumer protection.

The concept of a warranty is simple enough: Someone selling a product assures the buyer that of something. In a typical consumer transaction, the assurance is generally that the product will work for some period of time or is free from defect. Warranties can be express (written) or implied (imposed by law on all sales). Express warranties must be available to the consumer pre-sale, according to the Magnuson-Moss Act of 1975, a Federal Law. The FTC has a fairly complete consumer guide for written warranties.

We all know what the Xbox 360 warranty says, it's right here and here. It is the second variety of warranties that are more complex, the implied warranties. Implied warranties are imposed by law, and vary from state to state in the US and country to country abroad. As a result, I could spend the next year just trying to lay out the complex worldwide warranty matrix and still not finish the task. So, instead I will briefly mention two major forms of implied warranties: Merchantability and Fitness for a Particular Purpose.

Merchantability implies that the goods are what they say they are, and they conform to the standards of trade for that item so that they can be used as expected for that item. So, when sold, an Xbox 360 is warranted to be working, packaged and assembled in a uniform way, and able to play Xbox 360 games and DVD movies.

Fitness for a Particular Purpose is more specific. A merchant in this case must know that the consumer is planning to use the item for something specific and tells the consumer that the items are fit for that purpose. Say I went into a furniture store asking for a table to support a very heavy (200+ pound) TV set. If the salesman told me that a particular table would work, and it in fact collapsed, there would be a violation of the warranty.

Neither of these implied warranties are of much use, unless your system is dead out of the box. Moreover, they typically apply to the merchant (the place you bought the item), not the manufacturer.

A related issue is the concept of a deceptive trade practices acts. Deceptive trade practices are pretty much what they sound like (an action that in some way deceives the consumer about the product), and they are also a state by state action. In fact, some states have a long list of industry specific violations in addition to the general violations. It would be a bit of a stretch to apply this as well, although some concept of a failure of represented quality might be applicable, although Microsoft has generally admitted Xbox 360 failures, which may preclude this option.

There are probably potential other causes of action related to the Xbox 360 failures, but these are the ones that seem to appear on the message boards the most.

I would also like to take a moment to point out another legal issue related to the Xbox 360 failures: Fraud. Going to Wal-Mart (or other retail store), purchasing a console, and then returning your broken console is fraud. While it may seem like an easy fix, just don't do it.

Microsoft has encountered an interesting problem with the 360. The failure rate is high, but so are sales. What is a gamer to do? Hunt for weeks, if not months, to get a Wii, which I admit I enjoy thoroughly but is a little short on software until some of the big releases later this year (Metroid Prime 3, Smash Bros. Brawl, Mario Galaxy). Buy a PS3, which is even more expensive than the 360 and has, for the time being, a weak software lineup. Or buy a 360 and play some quality games until it fails, which seems a near certainty, at which point you might be under warranty, might have to pay for a repair, or might just buy a new console. It's quite an odd problem, and one I certainly wish Microsoft would resolve. Unfortunately, sales don't seem to be suffering enough for Microsoft to really take notice. Not that I blame the consumer, since I'm just as hooked as most everyone else. This issue, though, is also one that I cannot remember happening to this degree with any other console. In fact, I have never had another console in my collection fail, including my launch PS2 (which did have a notable failure rate).

What is a consumer to do? Unfortunately, short of a product recall (which seems unlikely given that it has not happened yet and safety is not the issue) or a class action suit, the individual consumer is likely stuck. Why? The cost of an action against Microsoft would be astronomical, and more than likely, they will just settle before any court could place any actual fault on them in order to avoid future, similar suits. This speaks to the failure of consumer protection on the whole. The Xbox 360 user base is vocal and adept at using the internet, so this issue is well known and widespread. Who knows what other products may present the same result to a less technically savvy group. On the flip side, I am certain that other products that work well are being unduly burdened by consumer protection attempts. It probably balances out in the grand scheme of things, but is unfortunate in many particular instances.

And so I, like everyone else, will be once again calling 1-800-4-MY-XBOX and hoping for the best. At least this time, it is in the off season, rather than right before a major game release (my last console was being repaired during the Gears of War release).