February 2011 Archives

Around the Virtual World


A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Disney Buys Social Networking site Togetherville

Togetherville, designed for children under 10, adds to Disney's stable of Internet properties including social gaming company Playdom and mobile application developer Tapulous.

Gamification and Avoiding the Fate of ARGs

Supposedly, there's much that can be done with gamification to build deep engagement with users. Games can enhance lives. Everything can become a game, from work to social causes, education and art.

Virtual Reality Technology at City Tech Lab

New York City College of Technology (City Tech) yesterday inaugurated a new state-of-the-art psychology research laboratory, the first such facility in the college's history.

There's a Bigger Mistake You Could Make Than Offending the SEC

Opinions on how advisors and their vendors should approach social media abound. It's an interesting topic. But, perhaps because of the focus on compliance, some basic issues haven't been addressed in-depth. You might wonder: "Why the heck did Twitter get popular? What can it actually do for me? Should I just pipe my regular marketing materials into these new networks?"

Snooping on Social Networks to Vet Jurors and Hire Employees

While attorneys use Facebook and social media to vet jurors, some government agencies are demanding social network passwords from potential employees. Sometimes social networking comes back to bite you with privacy invasion.

Mobile Social Gaming Goes Mainstream

Sometimes it seems like the only thing that's permanent in the mobile industry is impermanence--the pace of innovation guarantees that nothing stays the same for very long. One exception is the enduring popularity of mobile gaming: From BlackBerry staple Brick Breaker to blockbuster du jour Angry Birds, the titles may change, but consumer interest in gaming remains intact.

hi5 Announces "Sociopay" Advanced Monetization Platform

hi5, one of the world's leading platforms for social games, today announced the launch of the SocioPay monetization platform designed to maximize revenue for social games. SocioPay

dynamically determines the optimal monetization solution for every commerce opportunity, including identifying players who are less likely to purchase and offering advertising as an alternative to traditional payment options.

MocoSpace Launches $1M Mobile Game Developer Fund

Mobile social network MocoSpace is launching a $1 million HTML5 Mobile Game Developer Fund to accelerate the development of games played on smartphone browsers.

Microsoft Allowed Access to Datel Xbox Discovery



FTC to Review Freemium Model For Social Games


Congressman Edward J. Markey (D-Mass.), a senior member and former chairman of the Energy and Commerce Committee's Communications, Technology and the Internet Subcommittee, sent a letter dated February 8, 2011 to the Federal Trade Commission (FTC) requesting more information about possible consumer protection issues related to "in-app" purchases, particularly relating to kids.
The following is excerpt from the letter:

"I am disturbed by news that in-app purchases may be taking advantage of children's lack of understanding when it comes to money and what it means to 'buy' an imaginary game piece on the Web.  Companies shouldn't be able to use Smurfs and snowflakes and zoos as online ATMs pulling money from the pockets of unsuspecting parents.  The use of mobile apps will continue to escalate, which is why it is critical that more is done now to examine these practices. I will continue to closely monitor this issue and look forward to the FTC's response."

Click here for a copy of the letter

It is important for companies to understand the potential legal issues with innovative business models and to ensure clarity so that consumers understand

Around the Virtual World


A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Region's Gaming Business Reaching New Levels

The Mario Brothers might not hail from here, and the Beltway isn't home to Halo. But the Washington area's gaming industry is definitely growing.

Is the Future of Mobile Social Games Cross Platform Play? 

Recent headlines certainly suggest that mobile games will be developed for multiple mobile devices at once. OpenFeint creator Aurora Feint announced today that its mobile social network for games will soon support play across several mobile operating systems, VentureBeat reports. 

Zynga Raising $500 Million at $10 Billion Valuation 

The fast-growing social gaming company, Zynga is close to completing a funding round of $500 million, valuing the company at $10 billion, said multiple sources. The round includes big institutional investors Morgan Stanley, T. Rowe Price, Fidelity Investments, as well as a token investment from existing venture investor Kleiner Perkins, in order to establish the huge valuation.

What Brands Can Learn From Taco Bell's Social Media Lawsuit Defense

When it comes to high profile lawsuits, it's often been the plaintiff's use of social media that makes headlines and wins those ever-important battles in the Court of Public Opinion.

"Virtual Iraq" Helps Soldiers Overcome PTSD

A new study in The Journal of Traumatic Stress reveals the promise of virtual reality exposure therapy for soldiers returning from Afghanistan and Iraq. After just seven sessions, soldiers reported reductions in their post-traumatic stress disorder symptoms, and almost two thirds of the soldiers found the change to be reliable and meaningful.

Qualcomm Has High Hopes for Augmented Reality Gaming

Qualcomm is demonstrating a number of augmented-reality games for Android-based smartphones at Mobile World Congress. The games were developed using its AR SDK software development kit.

Virtual Reality is Worth Real Money in Healthcare

The market for products that rely on virtual reality (VR)--including robot-assisted surgery, medical data visualization, education and training, and rehabilitation and therapy--was worth $670 million in 2010, according to a Kalorama Information report.

Gamification Law and the FTC



Originally posted on the Gamification Blog.

Many people are aware that in 2009, the FTC implemented guidelines that addressed the use of endorsements and testimonials by bloggers. The main stream press highlighted just the part of these guidelines that require disclosure by bloggers of compensation received for recommending a product or service. However, the guidelines include some lesser known provisions which apply more broadly to consumer generated media and relate to gamification.

  • The guidelines are not limited to bloggers, but cover any advertising message, including consumer-generated media, that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of the endorser. This includes consumer testimonials, such as reviews or recommendations endorsing a product or service on any social media site, not just blogs.
  • When a connection exists between the endorser and the seller of an advertised product that might materially affect the weight or credibility of the endorsement, such connection must be fully disclosed. In one example, the FTC says that if a blogger gets a free video game to evaluate and review, he must clearly and conspicuously disclose that he received the game for free. In another example, it states that if someone receives redeemable points each time they tell friends about a product, this fact needs to be clearly and conspicuously disclosed.
  • In these examples, the FTC also states that the company needs to advise the consumer giving the testimonial that this connection should be disclosed, and it should have procedures in place to try to monitor the consumer's postings for compliance.
  • Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers. Endorsers may also be liable.
  • Whenever an advertisement represents, directly or by implication, that the endorser is an expert with respect to the endorsement message, then the endorser's qualifications must in fact give the endorser the expertise that he or she is represented as possessing with respect to the endorsement. This raises potential gamification issues with leader boards, badges and expert status to the extent that this implies an "expert" status that the user does not actually posses.
This is just one of many examples of little known laws that relate to gamification. For more information on legal issues with gamification contact james.gatto@pillsburylaw.com. Jim, who is the head of Pillsbury's Social Media, Entertainment and Technology group, delivered a presentation on Managing Legal Risk in Gamification at the 2011 Gamification Summit. A copy of that presentation can be found at here.

Around the Virtual World


A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Don't Buy and Sell Pokemon Data In Japan

Japan is going a bit copyright crazy of late. It's not cool to sell customized figures online, it's not cool to rent video games in love hotels, and now, it's apparently not cool to sell Pokémon save data.

Lessons of the NBC Agreement With Battlestar Galactica Fans

NBC / Universal has agreed to let Battlestar Galactica-themed roleplay sims continue in Second Life.   They too had been issued a cease and desist order through a DMCA (Digital Millenium Copyright Act) order.  In their case, the order was arguably even more serious - filed against Linden Lab itself, resulting in the closure of several Battlestar-themed sims and even the confiscation of content..

Wannabe Cool Kids Aim to Game the Web's New Social Scorekeepers

Today, a new generation of VIPs is cultivating coolness through the world of social media. Here, ordinary folks can become "influential" overnight depending on the number and kinds of people who follow them on Twitter or comment on their Facebook pages.

Guitar Hero Video Game Series is Axed by Activision

Activision Blizzard, which makes the Call of Duty and World of Warcraft series, says it's ditching the franchise because "the popularity of music-themed video games has faded".

Social Gaming Market Value to Approach $4 Billion by 2015

The global social gaming market's value will grow by 166 percent from $1.5 billion in 2010 to almost $4 billion by 2015, according to a recent forecast by analyst firm Business Insights.

Visa Acquires Playspan

Pushing into the virtual goods space, payments giant Visa has acquired Playspan, which powers e-commerce for hundreds of online games and virtual worlds, for $190 million.

How Location-Based Services Changed Social Games in Asia

As social gaming on mobile devices continues to grow throughout 2010, so will the number of applications offering location-based services. But will 2011 be the year that location-based social games take off in the U.S?

Around the Virtual World


A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

UC Legend Sues NCAA Over Trading Cards

Oscar Robertson, former University of Cincinnati and National Basketball Association Hall of Fame inductee, has joined a class-action lawsuit against the NCAA for using his name and image without his consent.

CloudCrowd: An Assembly Line for Content

"We're doing to service industries what China did to manufacturing," CloudCrowd CEO Alex Edelstein tells me. CloudCrowd collects tasks from clients--currently translation and proofreading jobs--via its Serv.io site, and then distributes them to waiting workers via a Facebook app.

"CSI" Facebook Game Offers Bonuses for Watching the Show

Thursday night's episode of CSI will have something extra for fans of the show's Facebook game: clues to unlock in-game bonuses.

Hacker Steals $12M Worth of Zynga Poker Chips

29-year-old IT businessman Ashley Mitchell plead guilty to stealing $12 million worth of Zynga Poker chips in a British court yesterday, and is now facing a substantial jail term.

Internet, Social Media Make Their Mark in Egypt's Crisis

The political unrest exploding across the Middle East is just the latest illustration that social media is no longer just for teenagers to tweet about their lives, play Farmville, and post pictures from last weekend's party. Today, it has the potential to shake regimes and drive leaders from power.

Will Social Media Leaks Or Pokes Win Nobel Peace Prize?

Two years ago, the world wondered how a newly-elected president like Barack Obama could qualify and win the Nobel Peace Prize. Even the president questioned the honor. This year, that same president might also question why WikiLeaks is now a candidate for that same distinction.

Fire Up the Avatars - Educational Virtual World Curricula Launches

Today, WiloStar3D LLC announced a joint collaboration with Exeter Township School District- Reading PA, and Manhattan-Ogden USA, Kansas to pilot Avatar Storytellers, an Immersive Learning virtual world curricula for grades 5-7.

PokerGate - 400 Billion chips Stolen from Zynga



A UK court entered  a guilty plea against Ashley Mitchell, an IT guy who hacked into Zynga's servers last year and stole 400 billion virtual poker chips. His efforts to resell them, which is against Zynga's terms of service, netted him $86,000 and a yet to be determined jail sentence.

To avoid issues with the gambling laws, Zynga sells poker chips to users for real money (and in some cases to reward user actions), but prohibits any cash out or resale of the chips.

Zynga's Terms of Service states:

"Zynga owns, has licensed, or otherwise has rights to use all of the content that appears in the Service or the Zynga games. Notwithstanding any provision to the contrary herein, you agree that you have no right or title in or to any content that appears in the Service, including without limitation the virtual goods or currency appearing or originating in any Zynga game, whether earned in a game or purchased from Zynga, or any other attributes associated with an Account or stored on the Service.

Zynga prohibits and does not recognize any purported transfers of virtual property effectuated outside of the Service, or the purported sale, gift or trade in the "real world" of anything that appears or originates in the Service, unless otherwise expressly authorized by Zynga in writing. Accordingly, you may not trade, sell or attempt to sell in-game items or currency for "real" money, or exchange those items or currency for value of any kind outside of a game, without Zynga's written permission. Any such transfer or attempted transfer is prohibited and void, and will subject your Account to termination."

With respect to chip "purchases", Zynga states:

"The purchase of Zynga Poker chips from a third party seller is a violation of Zynga's Terms of Service. We are  not responsible for any losses incurred and will not restore chips.

The only safe method of purchasing our chips is directly through the application, via the Buy Chips tab."

As virtual currencies proliferate, it is important for companies to ensure that they think through their business models, develop and enforce effective terms of service and consider up front how they can use technological measures to deal with people who inevitably will try to beat the system. This requires a careful integration of business, legal and technical strategy.

For more information on legal issues with virtual currency, see Pillsbury's Virtual Currencies Overview.