[ NNSquad ] Re: Using the Internet to control the market for pre-owned games

[Barry Gold <BarryDGold@ca.rr.com>]

Lauren Weinstein wrote:
> Using the Internet to control the market for pre-owned games
>
> http://bit.ly/azoFjK  (MCV)

The legal analysis of this is interesting, to say the least.

From a pure copyright perspective, there is nothing wrong with what 
Sony is doing.  The First Sale doctrine says that Sony cannot prevent 
the resale of its products, but to the extent that the games need to use 
Sony's servers, there is nothing in copyright law that says Sony needs 
to provide service to "heirs and assigns".

I can think of at least three other ways of thinking about it though. 
One is antitrust: if Sony has a large percentage of the game market, 
this move could be seen as an illegal "tie-in" (you have to X if you 
want Y).

Another take: might the use of the server be considered similar to a 
warranty?  If you buy a piece of equipment that comes with a warranty, 
you can sell or give that widget to somebody else, and the warranty 
usually goes with it.  (There are exceptions: some car manufacturers 
require paying a fee to transfer the warranty.)

A third is by analogy (or counter analogy) to other "service" type 
contracts.  If you rent an apartment, you can't transfer the apartment 
to a third party and expect the landlord to continue renting to hir. 
The rental agreement includes an element of trust: the landlord trusts 
you to pay on time and not trash his apartment, and hence doesn't have 
to accept a substitute who may not be as trustworthy as you.  In 
general, an obligation to provide service is not transferable. 
(Consumer warrantees are a notable exception.)

*But* the service provided by a computer server isn't "personal 
service".  It's about as impersonal as possible: the server doesn't know 
or care who you are.  Only that you have a (we hope legitimate) copy of 
the game.  So logically this _ought_ to be a transferable right. 
However, the contract that the game was sold under can modify this 
default: if you agree to a clause that says the server access is 
non-transferable, then (as a general rule) they don't have to provide 
that service to anybody else.

*But* if the game was originally sold (and registered) without such a 
clause, then adding it now might be an attempt to change the contract 
after the fact -- which is generally not legal.

So much for the legal aspects.  As to how the consumers will see this, 
only time will tell.  There have been lots of "good ideas" (as seen by 
the executives of various companies) that bombed in the marketplace. 
Usage caps are one example -- AFAIK no ISP has been able to make these 
stick in a market where there was even one other competitor.

The one thing I've been able to observe is that consumers respond better 
to "paying extra to get something extra" than they do to "paying extra 
for something you were already getting."  That's why the games where you 
can pay real $$ to get virtual goodies that you can use inside the game 
(both things that make you more powerful or otherwise improve your 
abilities in the game, and "cosmetic" changes like fancier avatars) have 
been highly successful.  But attempts to "take away" a privilege that 
consumers have been used to having (as with the caps on previously 
"unlimited" bandwidth) are generally met with resistance, and people 
will change if they have the option.  Even if there is no competition 
for this particular service (as with a particular MMP video game), 
consumers will feel ripped off and be less likely to buy from that 
manufacturer in the future.

One example from the real world.  Back in the 1970s, the California 
Dept. of Transportation (CalTrans) implemented HOV lanes, aka "diamond 
lanes" on several freeways in the Los Angeles area.  Most of these were 
done by re-striping the freeway to add a new lane for carpoolers.  But 
on the Santa Monica freeway, CalTrans took the existing leftmost lane 
and marked it for carpools only.

The response was immediate.  Unlike other carpool lanes, commuters felt 
cheated by having a lane "taken away".  They ignored the carpool 
markings and drove in the lane anyway.  And then merged back into 
regular traffic whenever they thought they saw a CHP car.  The result 
was utter chaos.  After about 2 months, the lane was restored to normal use.