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CURRENTS
Issue #101
March 4, 2009
Black and White
Front Page

After some technical difficulties (produced by yours truly—apparently it's important to upload your stories in order to have them viewed online), we're back to Currents being a regular feature. You may have noticed that the date for last week's article was almost pre-dated by a week. This was due to the fact that the article had been finished for some time before it actually made it to the page. Ipso Facto, the news articles from this Currents have been gathered over the last two weeks. Just thought I'd bring that out. I also want to bring out that the current goal I've set is to put these out regularly on Wednesdays.

Reading the forums during the last week or so was an interesting experience. Very poignant and logical points were made in discussions concerning the litigation around Earthbound. I appreciated reading the varying points of view and look forward to joining in discussions a lot more frequently in the future.

So, this is what happened in the world of gaming this (past two) weeks...

Over 14.5K Items of Content Available for Download
The Wal-Mart of the Digital Download World

As of this week, Sony's competition to the Wiiware, the PlayStation Network is claiming the attention of some 20 million people.

Sony has revealed that over 20 million users have registered PlayStation Network accounts as of February 20, 2009.

The figure comes two years and three months after the service went live on November 11, 2006, offering PS3 and PSP users access to digital content, multiplayer gaming and other social features.

The Network is available in 55 countries and regions, with Sony stating that over 600 PlayStation titles now incorporate online play.

The PlayStation Store features more than 14,500 items of digital content, said Sony, including full games, demos, and over 5900 movie and TV episodes.

Interestingly, I was mostly unaware of what this network consisted of until doing the research for this article. I was aware from commercials and other advertisements that movies and games were available for download. However, the figure at the bottom of the above quote piqued my interest as to what else was offered—14.5K items is quite a large number to offer. Even more surprising was, as the article above (located at GamesIndustry.biz) stated, the figure of some 380 million individual pieces of content downloaded! To put that into context, that's more than one downloaded item per person living in the United States!

So... what's in this network? The Sony PlayStation website gives an 'Unofficial' listing of most available content. From what I can tell, the list consists of the following categories.

Games to Download: 9 – 12%
Game Add-ons*: 40 – 44%
Game Demos: 8 – 10%
Game Trailers: 7 – 8%
Movie Trailers: 5%
A News Channel: - 3%
PS3/PSP Themes – 7%
Wallpapers – 8%

(* - The vast majority of these add-ons appear to be songs for Rock Band, Guitar Hero, et al. Note: Percentages are not accurate—just an estimation based on the items on the site. After all, I'm not going to sit and count 15,000 items)

With there being 20 million users, the above listing is probably not news to many, but I listed it for the individuals, such as myself, who have yet to join said Network. With talks of the PS3 going down in price over the next Fiscal Quarter or so, the number of those joining PSNet will probably increase, directly affecting the number of items available for download.

(Interesting Note: Of all the games available for download—only two were listed under the official subheading 'RPG'. I'm sure some of the Action/Other games cross-over, but it would seem that the RPG market hasn't been officially represented well yet.)

Sources: Gamesindustry.biz |
Square-Enix Defends Intellectual Property in Lawsuit
Manufacturers busted for making Buster Swords.

Seems each and every week one does a search around the Video Game world online, a person can find at least one lawsuit instigated or defended by a top-ranking game company. However, my find this week down Litigation Street (That actually sounds like a nice Currents themed section) seems a little more legitimate than last weeks' “That song sounds kinda like a song that The Who did” article.

Square-Enix, famed for making video game heroes with unusual, even exotic and/or bizarre swords, settled in-court with a number of manufacturers who were making and selling replicas without permission. The lawsuit, officially filed 12 months ago with (at least) three US-based manufacturing companies, ended with an official apology and restitution of $600K. According to the article, this was not the first of this kind of issue questioned by Square-Enix.

The lawsuit named at least four national wholesalers of unlicensed sword replicas and their principals that have infringed Square Enix's FINAL FANTASY® franchise of video games and CG-animated film. This settlement follows previous out-of-court settlements against [four web-based sword-replica industries].

However, this was apparently the first lawsuit that forced Square-Enix into court and involved litigation from the known RPG makers.

The current action is the first major U.S. anti-piracy lawsuit for Square Enix but will not be the last. Square Enix is stepping up its anti-piracy enforcement with aggressive initiatives against individuals and organizations involved in the theft and unauthorized use of the company's intellectual properties.

(Quotes above from Square-Enix website)

Personal thoughts on this article—I support the actions of Square-Enix. As much as I would love to have a replica of Cloud's, Squall's or Tidus' awesome swords, and would love to do so cheaply, ethics seem to be on a sharp decline in today's age of technological advancement. Standing up for what is honestly right has emotional benefits as well—especially if it involves standing up for the company that gave us One Winged Angel, a song that has graced many cell phone ringtones and iPod playlists.

In addition, the more that a company has to pay in fighting lawsuits and defending IP, the more that they feel they have to twist the arm of the innocent ones in pricing. That sounds like rhetoric from public relations, but in all reality, putting myself in the shoes of the company, I'd hate to lose money for something that's illegal to begin with.

Ethics and all aside, it's good to actually see a lawsuit accomplish what it's supposed to accomplish...

Sources: Square-Enix.com |
Digital Downloads To Be Taxed In a Number of States
Will it feel like Grand Theft Techno?

I'm not terribly experienced at news research; that is, not as much as the professionals who do this for a living. However, I'm sure that those who compile research for news articles probably learn this lesson: The story one starts to write doesn't always end up being the story that is there when finished.

In my casual browsing around this big (in fact, World Wide) web, I came across an interesting article from the University of Wisconsin's student paper detailing that the state's governor had signed into effect a 5% tax on all digital downloads, from ringtones to video games, though specifics on the types of downloaded material are still being worked out.

Gov. Jim Doyle approved imposing a 5 percent sales tax on a number of digital goods - including music, ringtone and video game downloads - Feb. 19 as part of a bill aimed at narrowing a $6 billion dollar state budget deficit. The new tax will go into effect Oct. 1.

"One of the problems we have with the tax code is that it doesn't grow with the economy," said state Sen. Kathleen Vinehout (D-Alma). "Right now we're moving into a whole new world of products that are transmitted over the Internet.

"It's part of keeping up with the times - part of modernizing our tax code."

Reactions to the governor's actions were varied by other politicians and included questions as to how the state would enforce said tax. The revenue generated by a 5% tax is estimated at some $11M over the course of the next three years. Supporters stated that signing the bill into effect would put Wisconsin on par with other states...

And it was that last statement that got my curiosity piqued.

Once I finished reading the story a second time, I typed in “taxing digital downloads” in a search engine to find that this idea is not a new one. Four of the five top listings were stories from the (U.S.) states of North Carolina, New Jersey, Tennessee, and New York, all of which were either contemplating or working toward putting a similar law into effect. While some of the articles were dated by some months (or even over a year), the ideas featured in the majority of the articles dealt with different levels of taxation.

For instance, many of the articles from late 2007 through 2008 dealt with the taxation of iTunes and other primarily music digital download systems. New Jersey was one of the first to sign such a bill in 2006, and a number of states are currently taxing similarly. However, of the half-dozen or so news articles I read through, not much mention was made of taxing video games (obviously, any mention would be geared toward cell phone games).

The above may not be news for the majority of readers (as much as it was for me), but as any individual who watches economic trends could attest to—this may be the springboard legislature needs to expand into other areas. I'm not familiar enough with PlayStation's online store (as discussed above), but I know that the Wii's Virtual Console store does not currently tax downloads. True, the Wii offers only Nintendo-licensed games to begin with, and therefore doesn't have as strong a need to tax downloads, but could that change? Could a state tax be enforced on the games or other media presented on the new-gen consoles—especially when compared to the fact that retail games for the systems are?

In any case, I certainly hope that Florida doesn't start charging per-word on Text Twist...

Game Developer THQ Denies Rumor of Possible Bankruptcy
Shame Power-ups don't exist in the financial world, huh?

On the one hand, it's a little rough putting up an article that based off a guess (albeit, one from an expert) as to the financial stability of another company. On the other, when they present good evidence, it's hard to ignore. According to the Los Angeles Business Journal:

In the last 10 months, [THQ] has rung up a $334 million loss and burned through about half its cash. Its stock price has tumbled from around $20 to just above $2. With consumers expected to cut spending on video games due to the downturn, there’s increasing speculation that THQ could become a bargain-seeker’s takeover target. And at least one analyst thinks there’s a chance it could go bankrupt.

“You have mediocre product and you’re running out of cash,” said Michael Hickey, an analyst with Janco Partners Inc. in Denver, who put the odds of THQ going bankrupt at 50-50. “Not the situation they want to be in right now.” THQ executives are scrambling. Chief Executive Brian Farrell last month launched an aggressive turnaround plan, slashing costs for next year by $220 million and laying off almost 600 employees.

Farrell dismissed talk of takeovers and bankruptcy as gossip.

“I know that makes for good print and sells newspapers, but those aren’t the kind of things we focus on right now,” Farrell told the Business Journal. “When the stock price is depressed, the naysayers can have their day in the sunshine. But we have a plan that we’re very confident will give us cash and return the company to profitability.”

At present, I really don't have much to add to this story myself. I'd be interested to see where it goes, but it is a news article of interest to all gamers. Why? Because the financial strength of the giants is a gauge to other companies as to the times—what the chances or percentages are that they might also face trials. While it is true that THQ has its own particular brand of games they market and challenges they face, comparison is often times the best ally to economists.

In any case, it's an interesting story to keep an eye on, eh?

QUICKIES: Three For The Price Of... Well, You Didn't Pay Anything, Did You?
Fun and quick to read!
  • Interesting Facts about piracy:
    While doing the second article above, I did a little extra research with the ESA's website and learned a few interesting facts about IP piracy that I didn't really know. Regardless how a person feels about the subject, I think these are just good to know.

    - Users across 223 separate countries, territories and colonies downloaded illegal copies of games. Downloads of the two most popular titles were estimated to have been made across 219 countries, territories and colonies.

    - During December 2008, based on a study of only thirteen titles, users downloaded 6,429,279 illegal copies of these titles. The total number of completed downloads made of the two most popular titles during this one-month period was 4,787,441.

    - Italy had the heaviest illegal download activity (17%) followed by Spain (15.1%), France (7.9%), Germany (6.9%), and Poland (6.1%).

    - Heaviest downloading countries per capita were Israel, Spain, Italy, Portugal and Poland.
  • Circuit City Liquidation Woes
    The following article make me a bit surprised—and made me think seriously about whether or not to check out the sales Circuit City was offering for their “Going out of Business” sale:

    While the closure of Circuit City may mean excellent (and not so excellent) deals on video games and electronics, it can also mean buyer remorse. Especially when one considers the "All sales are final" policy. Reader John tells us his tale of nonreturnable woe, a massive disappointment to the tune of $7.50.

    "I went into Circuit City today to capitalize on their misfortune, and saw a copy of Resident Evil 4 for PS2 on sale for $7.50. Upon waiting in the checkout line, I saw a sign that said, 'All sales are final.' I figured it was fine, because, for seven bucks, you couldn't go wrong. Well, you could."

    John continues. "I got home and opened my purchase to see [a] monstrosity of a game disc. Also I can't play or return it. All I have to say is: [censored].”

    There was a picture of the disk with the name “Danny” scratched deeply into the bottom of it, and it also appeared 'Danny' tried to put the disk in a paper shredder. It makes you laugh... but it also makes you think.

    (Story from kotaku.com)
  • Drivers in Oahu, Hawaii Have Legal Right To Drive Badly
    An attempt to ban (or make illegal) activities distracting to drivers in Oahu, Hawaii has failed via a veto by the city mayor. City legislature had attempted to pass a law making it illegal to perform such actions as texting on cell phones or playing video games (PLAYING VIDEO GAMES?!) while driving. Stated in the Honolulu Advertiser:

    “Playing video games or text-messaging while driving remains a legal activity on O'ahu (sic) roads, following the City Council's inability yesterday to override a mayoral veto. The council's failure to muster six votes needed to overturn Mayor Mufi Hannemann's veto was unexpected. That's because the council just last month voted 7-1 in favor of the bill to ban the playing of video games, and writing, sending or reading text-based communications, while driving. The effort to override the veto failed by a 4-4 vote, with [only three of the original] councilmen voting against the ban. All three previously voted for it, but yesterday they said they opposed the ban because it would be difficult to enforce.”

    So that we get this straight—they were trying to ban playing video games while driving, a feat which scares me to begin with, but the bill was vetoed and fell off because they believed it couldn't properly be enforced. So, that makes it worth not making a law at all? Now, if I ever visit Oahu, Hawaii, I'll have to watch out for 17 year old kids playing Call of Duty while driving? (I know, I know...they mean cell phone games. Still, that would be interesting to see...)

Issue #101 is 1-0-Done. ... Boy, that sounded better before I typed it out. I think I'll avoid meaningless puns in the future. As far as readership, I'd be interested in knowing what you thought about the stories or what your opinions on the subject matter are. I also apologize that the stories themselves weren't very long in comparison with last week. In the case of THQ, I'll be keeping an eye on it, as well as the impact it could potentially have on the market at large. As far as Litigation Street... I like that idea. Maybe we'll make it a regular feature...

(P.S. The Currents archive will be updated before next week)

Daniel Burnham
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