Filed under: Legal

by **Eliot Lefebvre** May 21st 2012 at 10:30PM

That this image is at all appropriate speaks well of no one.

If last week's Project Copernicus flythrough had been a hopeful note, the latest news out of 38 Studios is another downturn. Following a meeting today, the Rhode Island EDC board decided to take no action to help the ailing company at this time. Governor Lincoln Chafee said following the meeting that the financial situation of the studio remains unchanged from last week, but did note that the company has seen some layoffs and underwent unspecified internal shifts.

Founder Curt Schilling did not directly respond to press inquiries, stating that he would answer questions when he is able to do so. He did, however, state that he was not taking further taxpayer money. Whether or not there will be a company there to take any money in the near future is still very much in doubt, however, and while Chafee has been a bit more diplomatic about aiding the studio, he has stressed that any assistance would be far on the conservative side.

by **Justin Olivetti** May 18th 2012 at 2:30PM

It is not every day that a U.S. governor is the one to announce the launch window for an MMO, so savor the weirdness while you can: Rhode Island Governor Lincoln Chafee announced at a press conference that 38 Studios will be releasing code-name Project Copernicus next summer. "What I understand is Copernicus is June of '13," Chafee said. He also stated that he thought the financial deal was a "risky enterprise" from the start.

38 Studios Founder and Chairman Curt Schilling said on Facebook that rumors of his using the state funds to repay his personal investment in the company was "not true." In a separate post, Schilling attempted to set an optimistic tone: "We will find a way, and the strength, to endure."

We have been following the financial turmoil that 38 Studios is in following its default on paying back Rhode Island for its $75 million loan. The studio and state are looking for options, but in the meanwhile, 38 Studios has been struggling to make payments by holding back employee paychecks and seeking additional capital from private investors.

by **Eliot Lefebvre** May 17th 2012 at 6:00PM

Because not paying your employees for a month always works out.

If you're familiar with the phrase "robbing Peter to pay Paul," you'll understand the latest episode in the ongoing 38 Studios financial crisis. Except replace "Paul" with "the state of Rhode Island" and "Peter" with "the company's employees." Yes, in order to make the most recent payment to the state that sparked this whole crisis, the Rhode Island Economic Development Corporation has been informed that Curt Schilling's company is paying the state but not paying any of the company's employees. According to anonymous sources, all temporary employees and contractors have also been terminated.

While this measure might help forestall immediate action, the company is still on the hook for a $75 million loan, and Rhode Island governor Lincoln Chafee has made it clear that the company is looking for more assistance from the state in order to remain viable. 38 Studios continues to make no public statements at this time. We'll no doubt have more on this story in the coming days as it continues to develop.

by **Justin Olivetti** May 17th 2012 at 12:00PM

Call them lockboxes, lootboxes, super packs, gift packs, treasure boxes, mystic chests, or Chupacabra's lunchpails, but these virtual boxes of mystery, fame, and fortune are all the rage in MMOs these days. Few studios have resisted the siren's call of such easy money, much to the dismay of many-a-gamer.

The idea is that a game will dish out to players free locked treasure boxes that require purchased keys to open. The allure of the box's mystery prize is often too strong to resist, especially when there's the possibility of a huge reward inside. The result too often is strong buyer's remorse and studio glee.

There's been a lot of conversation around lockboxes here on Massively, so I wanted to dedicate this week's Perfect Ten to dissecting the truth, the whole truth, and nothing but the truth of these items for you.

by **Eliot Lefebvre** May 16th 2012 at 3:30PM

Generally, when your company defaults on a major loan, you might expect an emergency meeting about the loan and the company's future would produce some results. But apparently today's meeting between 38 Studios owner Curt Schilling and Rhode Island governor Lincoln Chafee resulted in... absolutely nothing. Specifically, Rhode Island's Economic Development Corporation will take no immediate action to prevent the studio from going under, with Chafee on record as asking, "How do we avoid throwing good money after bad?"

It's a loaded question if you consider that the failure of 38 Studios would put the state's taxpayers on the hook for more than $112 million. Schilling has declined to elaborate on the company's state in interviews, and he has not made public how much more funding the company is seeking. It's bad news for the studio, bad news for the state, and bad news for any fans still looking forward to the possibility of Project Copernicus in the future.

[Update: Joystiq reports that "it appears 38 Studios put up all present and future IP by the company as collateral," meaning that if the studio defaults, the state of Rhode Island will own all of its game assets. We've tucked some of the ensuing news coverage in the video behind the break.]

by **MJ Guthrie** May 15th 2012 at 9:00PM

Travel back two years to when Cheyenne Mountain Entertainment was filing for bankruptcy and (unsuccessfully) attempting to sever ties with Gary Whiting, Chairman and CEO of the company. Stargate fans watched as their hopes for an MMO were dashed.

Fast forward to present day, when Stargate Worlds appears back in the news. Unfortunately for fans, it has nothing to do with offering a sliver of hope that the game itself might also revive; instead, more lawsuits are being filed against Whiting and other Cheyenne employees.

The newest lawsuit filed in Arizona includes 17 plaintiffs who accuse Whiting of misleading investors in various ways to obtain their cash. Some of the allegations leveled at Whiting include "negligent misrepresentation, breach of fiduciary duty, common-law fraud and securities fraud"; he's also accused of issuing loans to himself from the company's funds -- money that may still be in Whiting's possession, according to Cheyenne Mountain's court-appointed receiver, Keith Bierman of Phoenix-based MCA Financial Group.

by **Eliot Lefebvre** May 11th 2012 at 5:30PM

It's better than the original plan to name it Blizzard Dot-A.

What's in a name? Quite a lot, as it turns out. A name alone was enough to send Blizzard and Valve to man the lawyer cannons over two upcoming games, DOTA 2 from Valve and Blizzard DOTA from Blizzard. The companies have reached an agreement, however, which includes Blizzard renaming its game to Blizzard All-Stars while retaining use of the "dota" name for noncommercial use in the fan community. Valve retains the commercial use of the name.

It sounds like a little matter until you remember that Warcraft III was the source of the map that spawned this game type, leading to both companies developing competing versions of a sequel. Blizzard All-Stars currently has no release date, while DOTA 2 is due out sometime next year and is currently in beta testing. Luckily, the terminology is only being changed on the corporate side, meaning players are free to continue discussing the games as they would have anyway.

by **Jef Reahard** Apr 18th 2012 at 10:00PM

En Masse Entertainment has issued a response to yesterday's developments in the long-running NCsoft vs. Bluehole Studio legal drama.

A posting on the official TERA blog says that the upcoming action MMO will launch as scheduled on May 1st despite "baseless accusations" and "unfounded rumors" regarding the theft of Lineage III assets by former Bluehole employees in Korea.

The piece states that "after extensive Korean proceedings, Bluehole Studio was not found to have made any use of any NCsoft trade secrets in the form of source code or game design." It also notes that NCsoft product performance has suffered since TERA's Korean launch more than a year ago.

by **Jef Reahard** Apr 17th 2012 at 10:00AM

Multiple news sites are reporting a verdict in the long-running NCsoft vs. Bluehole Studio litigation regarding stolen Lineage III assets. According to the sites, the Korean Supreme Court has confirmed the guilty verdict in the criminal trial originally reached in 2009. The body also doled out "tougher punishment" in the form of prison time and probation for a former Lineage III department head and a team manager.

ThisIsGame.com points out that there could be more bad news coming for the team that turned Lineage III assets into TERA, as the outcome of a $5.7 million civil suit is still pending.

MMO Culture has published a timeline of the TERA legal proceedings, though neither website cites a source for its information. We'll update the story with more details as they become available.

by **Justin Olivetti** Feb 21st 2012 at 4:00PM

While we heard about Sony Online Entertainment's partnership with ProSiebenSat.1 Games Group to publish MMOs in Europe last month, the specific details of this deal were lurking under a cloud cover of mystery and speculation -- until now. SOE has posted a quite lengthy FAQ about this partnership and what it entails for the future of the studio in the Old World.

According to the deal, ProSiebenSat.1 has the license to officially publish eight of SOE's titles in 40 countries. These MMOs include DC Universe Online, EverQuest II, Free Realms, PlanetSide 2, and EverQuest Next (although not, oddly enough, EverQuest itself). SOE hopes that ProSiebenSat.1's location and expertise will result in in a greater audience for its games as well as more support and better localization for those under ProSiebenSat.1's umbrella. SOE even hopes that the partnership will result in "special content" for European players.

Previously, SOE had distribution agreements for Europe but nothing on the scale of what it now has with ProSiebenSat.1. It looks like EU players will need to transfer their accounts and characters over to ProSiebenSat.1's domain, although SOE promises that this will be an easy process. It's also important to note that these games and their servers will not interact with their North American counterparts, effectively separating the communities.

by **Eliot Lefebvre** Feb 2nd 2012 at 8:00PM

These are the markers used to cross our names off the credits. What? It's not the most tenuous connection I've used.

One of our readers was kind enough to point us to two sites that, once again, were stealing our posts without crediting our authors or anything like that. (I don't mean "this post looks suspiciously similar"; I mean abusing copy and paste.) Unfortunately, while we're aware of these things, there's not a whole lot we can do other than request that the sites get taken down. Sometimes it works, and sometimes it doesn't, but it's all we can do. I guess it's nice to be good enough that your work is worth stealing without credit? That's something.

This week's installment of Ask Massively isn't going to focus on that, however. Instead, we're going to focus on the recent spate of MMO litigation and the potential for a boxed RIFT expansion. If you have a question you'd like to see answered in a future installment of Ask Massively, mail it along to ask@massively.com or leave a comment in the field below. Questions may be edited slightly for clarity and/or brevity.

by **Justin Olivetti** Jan 31st 2012 at 5:00PM

Is stealing a virtual good deserving of a real-world criminal sentence? According to a recent ruling by the Dutch Supreme Court, the answer is "yes."

The court recently upheld a ruling of a criminal case in which teens attacked another youth and forced him at knifepoint to relinquish his possessions in RuneScape, including an in-game amulet and knife.

The incident happened in 2007, and a lower court convicted the two thieves in 2009. One of the defendants then appealed to the country's supreme court on the grounds that the stolen goods "were neither tangible nor material and, unlike for example electricity, had no economic value."

However, the judges declared that these virtual items had value because they represented "time and energy invested" to acquire. The thieves were sentenced to 144 hours of community service.

by **Justin Olivetti** Jan 27th 2012 at 8:30PM

It looks like being a young gamer in South Korea is getting tougher and tougher. Last year the country put into effect a "Cinderella Law" that prohibited online gamers 18 and younger from logging in to popular games between the hours of midnight and 6:00 a.m.. Now the government is taking a close look at an additional law limiting the amount of time played each day for minors.

The proposed policy comes from the Ministry of Education, Science and Technology (MEST) and would yank account privileges for minors if they played either more than two hours in a row or more than three hours daily. The MEST is concerned about game addiction in minors, citing that it may come from the duration of play sessions.

The game industry is concerned about possible over-regulation by the government spurred by theories on addiction that haven't been proven. Some are calling for earlier shutdown policies to be overturned if this one is implemented.

by **Jef Reahard** Jan 27th 2012 at 9:30AM

En Masse Entertainment has commented on a pending lawsuit by NCsoft that seeks to prevent the North American launch of TERA. As you would expect, there is virtually no detail on the proceedings, but En Masse publishing vice president Chris Lee does come out swinging, saying that the firm "outright rejects" NCsoft's position and will fight it to the last.

NCsoft has alleged that former employees stole Lineage 3 code and art assets that were used to make TERA, and the firm has already scored a legal victory in Korea that resulted in jail time for some of the ex-staffers.

How all of this affects TERA's U.S. release is unclear, though Lee says it's business as usual for En Masse and its fans. "This situation has no impact on our continuing efforts to realize the vision we have for our game. We are committed to making TERA awesome and delivering the game to you on time on May 1st," he writes.

by **Jef Reahard** Jan 25th 2012 at 11:50PM

It's been a long road to completion for En Masse Entertainment and its upcoming TERA MMO. If NCsoft has its way in court, it might be even longer. MMO Culture reports that NCsoft filed a lawsuit earlier this month stating that a group of its employees quit the company and went on to found Bluehole Studio (TERA's original Korean developer). In doing so, the former employees allegedly stole "copious amounts of confidential and proprietary NCsoft information, computer software, hardware, and artwork relating to Lineage 3" and used it to produce TERA.

The employees were convicted of stealing trade secrets by a Korean court in 2009, and the convictions were "mostly upheld by an appellate court." NCsoft filed a Korean civil complaint against Bluehole in 2010 and won damages and an injunction, both of which were subsequently overturned by an appellate court.

Despite the fact that both criminal and civil litigation is still pending, Bluehole launched the Korean version of TERA in early 2011. En Masse (Bluehole's American subsidiary) is scheduled to launch the U.S. version in May of 2012.

Name	Date
Cataclysm Launch	Dec 7, 2010
DCUO Launch	Early 2011

Name	Title
Shawn Schuster	Editor-in-Chief
Brianna Royce	Senior Editor
Rubi Bayer	Community Manager
Brendan Drain	Contributing Editor
Eliot Lefebvre	Contributing Editor
Jef Reahard	Contributing Editor
Justin Olivetti	Contributing Editor
Krystalle Voecks	Contributing Editor
Larry Everett	Contributing Editor
Beau Hindman	Columnist
Edward Marshall	Columnist
Greg Waller	Columnist
Jeremy Stratton	Columnist
Karen Bryan	Columnist
MJ Guthrie	Columnist
Patrick Mackey	Columnist
Ryan Greene	Columnist
Lisa Poisso	Columnist

Filed under: Legal

Layoffs confirmed for 38 Studios, Rhode Island takes no action

38 Studios' Project Copernicus to release in June 2013, says RI governor

38 Studios paying state back by not paying employees

The Perfect Ten: The truth about lockboxes

No relief in sight for 38 Studios after emergency meeting [Updated]

Stargate Worlds is not resting in peace as new lawsuit emerges

Blizzard renames Blizzard DotA to Blizzard All-Stars

En Masse addresses TERA lawsuit speculation

Korean court confirms guilty verdict in TERA criminal trial

SOE opens up about multi-year European partnership

Ask Massively: Thieving on the fast track edition

Dutch Supreme Court declares RuneScape theft a real-world crime

Three hours and out: South Korea considers additional gaming ban for minors

En Masse comments on NCsoft TERA lawsuit

NCsoft files TERA-related lawsuit against Bluehole and En Masse

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