Analysis: Despite Ruling, Threats Remain For The Games Industry

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."