The Consumerist spins the sorry tale of Zach, a gamer who tried to twice download Diablo II from Blizzard's online distribution system. When a Blizz rep finally suggested he go to a brick-and-mortar store and grab a copy, Zach did.

The problem came when Zach's credit card bill showed up and the charges for the failed digital D/L's were included. Amazingly, Blizzard's response was to suggest that Zach wait until their system had the ability to process a refund.

Uh, what? Blizz never had to process a digital D/L refund before? Really?

Luckily, The Consumerist gave Zach the right advice: 

The emails Zach forwarded us show that Blizzard is willing to refund the money — but claim that their system will not allow it and that he should wait for that "functionality to become available." That's unfortunate for them, but there's no reason Zach should wait around for the company to debug its software.

 

Zach, call your bank and let them know that you've been mistakenly charged and that the vendor says they aren't able to refund your money. Tell them that you'd be happy to provide them with the emails from Blizzard. There should be no problem getting a straightforward error such as this fixed. Your bank is there to protect you from this sort of nonsense.

Video game industry types are leaning Barack Obama's way.

That's the conclusion which GamePolitics cautiously drew a couple of weeks back based on our survey of campaign donations by game industry A-listers.

Kotaku spent some time rummaging through Federal Election Commission records, but took a more global approach, compiling data on a company-by-company basis. In a story posted today, they came to pretty much the same bottom line:

About seventy-five percent of game industry presidential campaign donations went to democrats, based on a sampling of developers and publisher donations over the past two years obtained from the Federal Election Commission.Kotaku looked at presidential campaign donations for nine companies from January of 2007 through the end of July, 2008. The companies included were Activision, Blizzard, Electronic Arts, Nintendo, Sony Computer Entertainment of America, Take-Two, THQ, Ubisoft and Valve...

 

 

The database showed that the nine companies donated a total of about $97,800 to ten candidates, about $61,000 of which went to democratic candidates, while about $36,700 went to republican candidates.

 

Kotaku also serves up a number of pie charts to support their conclusion. Mmmmm, pie...

It has been reported on a number of sites, Ten Ton Hammer among them, that the upcoming Wrath of the Lich King expansion for World of Warcraft will feature something mysteriously called "Paid Character Customization."

This news reportedly slipped out at a BlizzCon press conference featuring WoW's J. Allen Brack.

From the TTH story:

In a press conference late on Saturday, Lead Producer J. Allen Brack confirmed what some data file combers had surmised: WoW will feature paid character customization:

"I don't mind stating that there will be paid character customization at some point. I can't really go into detail."

Details such as when this feature will be added and the extent of customizable features for hire are unknown at this point, but its safe to surmise that any kind of paid changes will be purely cosmetic.

But, will it be purely cosmetic, as TTH assumes? Gamasutra has something of a different take on Blizzard's news:

Emerging business models for online games like microtransactions and tiered subscriptions have long met with skepticism from the average MMO enthusiast, who's viewed Blizzard and its standard subscription model for World of Warcraft as a bastion against new monetization strategies.

But it seems possible that Blizzard might soon explore the pay-for-goods arena after a press conference at its BlizzCon event -- though specifics are still being ironed out.

So, if it turns out that Blizzard is selling character upgrades such as special items and gear, philosophically, is that much different from buying WoW gold from a third-party seller? (which I've done in the past and for which I get a great deal of criticism from some MMO gamers whenever I mention it).

Life as a Secret Service agent must be very high pressure existence, indeed. When things go well, no one notices. When things go badly, the entire world is transfixed.

Activision will give players a chance to try on the agent's typical dark glasses, earpiece, and lapel pin in Secret Service, an upcoming, first-person title for Xbox 360, PS2 and PC.

The mission, of course, is presidential protection. From IGN's write-up:

Secret Service takes place on Inauguration Day in Washington D.C. An extremist assault has been launched against the capitol - security has been compromised and it is unclear who is friend or foe. There is no time for negotiation as you are thrust out of the shadows and into the line of fire in order to protect the nation's leaders. The action takes place among famous landmarks and everywhere in between, including both Marine One and Air Force One.

GP: Depending upon how it is presented, Secret Service could end up being a rather controversial game. There are those who will argue that presidential assassination scenarios should not be trivialized by turning them into a game.

Thursday was another bloody day on Wall Street and stocks of video game publishers did not escape the carnage.

As reported by GameSpot,  the likes of Activision, THQ, EA and Take-Two have seen their share price drop between 28-40% in recent weeks:

Worst off is Take-Two Interactive, which has lost 40 percent of its share price in a month, going from $21.77 to $13.01. Besides overall market woes, the decline was also in large part due to Electronic Arts' abandonment of its Take-Two takeover bid, which was $26 per share at its highest point...

 

Despite the apparent game-industry-wide drubbing, analysts are confident the game industry will fare better in a recession than other sectors. "If people aren't traveling and stay home, what are they going to do? They'll want relatively cheap home entertainment," David Gibson, senior analyst at Macquarie Research Equities, told the Wall Street Journal. "[And] core gamers will buy the titles when they come out, regardless of economics."

GP: If you're a T2 shareholder, we've gotta wonder how you're feeling about passing on EA's 25.74 takeover offer.

Another alleged game software pirate sued by publishing giant Activision has agreed to a $100,000 settlement, according to federal court documents obtained by GamePolitics.

Last month GP broke the news that Activision was quietly suing - and obtaining large settlements - from private individuals in the United States who were not represented by counsel. A case against a sixth defendant, James R. Strickland, had not been resolved at the time of that report. In the interim, Strickland signed off on a stipulation in which he confirmed that he does not contest Activision's allegations and agrees to pay the publisher $100,000. He also waived his right to appeal and agreed not to make public statements about the case.

Strickland signed the document in pro per, a legal term which means that an individual is representing himself.

Activision was represented in the case by attorney Karin Pagnanelli of Los Angeles firm Mitchell, Silberberg & Knupp. As GamePolitics previously reported, Pagnanelli has an extensive legal background involving anti-piracy matters for clients including the Recording Industry Association of America. The RIAA's tough tactics against music file sharers have been a source of increasing controversy in recent years. Pagnanelli, however, told GamePolitics last month that the Activision cases do not involve file sharing.

That being the case, the exact nature of the allegations against Strickland remain unclear. A document filed by Activision with the Copyright Office of the Library of Congress names only one game, the Xbox 360 version of Call of Duty 3. COD3 was named in several of the earlier cases as well. It is unknown what connection, if any, may have existed among the six defendants.

Also unclear is just how firm the $100,000 figure specified in court records might be. GameCyte reported last month that an unnamed defendant in one of the earlier cases claimed that the $100,000 amounts were inflated for shock value, while still terming the monetary loss "substantial."

The Strickland settlement appears to bring to a close this round of piracy lawsuits by Activision. Neither the company nor the defendants are saying much, so we don't know what form of copyright violation took place. Also unknown is whether these cases were an anomaly or signal a new, aggressive anti-piracy strategy for Activision.

Read the stipulation document here.

The BBC reports that Blizzard has won a $6 million damage award against the creator of a botting program used illegally within World of Warcraft.

Glider, distributed by MDY Industries, infringed upon Blizzard's WoW copyrights, a judge ruled earlier this year. From the BBC:

The Glider software is the creation of MDY founder Michael Donnelly who is thought to have sold more than 100,000 copies of the $25 (£14) program.

 

It proved popular with many WoW players as it helped them automate the many repetitive tasks, such as killing monsters and scavenging loot, required to turn low level characters into more powerful ones...

 

The case is due to go to court again in January 2009 when the remaining issues in the legal conflict look likely to be settled.At issue will be whether MDY broke the US Digital Millennium Copyright Act and whether Mr Donnelly will have to pay the damages from his own pocket.
 

Today's Sydney Morning Herald reports on a viral YouTube fad involving mash-ups of 2004 Adolf Hitler bio-pic Downfall.

In one version the evil dictator gets banned from World of Warcraft (hit the video). In another der fuehrer is booted from Xbox Live. From the SMH:

In yet another case of an online parody taking on a life of its own, hundreds of internet jokers are dubbing over a scene from the film Downfall, in which Hitler explodes with anger when told he has lost World War II...

 

The narratives include Hitler fulminating about being kicked off Xbox Live, football star Cristiano Ronaldo leaving Manchester United to join Real Madrid, Barack Obama giving a speech in Berlin and being forced to see an Adam Sandler movie.

 

Other Downfall clips include Hitler reacting to having his car stolen, being banned from World of Warcraft, Hillary Clinton's nomination defeat, getting rejected from university and British Prime Minister Gordon Brown's disastrous Glasgow byelection results.

The owner of public relations firm which represents video game publishers also runs a video game website at which games are reviewed.

Credit Joystick Division with bringing the situation to light.

The game review site in question is GameCyte, while the P.R. firm is TriplePoint (formerly Kohnke Communications). Richard Kain (left) runs both. From Joystick Division's lengthy expose:

Richard Kain, TriplePoint PR’s General Manager and Founder, in fact formed a new company – Pantheon Labs – under TriplePoint’s roof to create GameCyte, as a way to bring “quality journalism” to the gaming media – and then deliberately concealed his ownership of Pantheon and GameCyte.com using domain privacy services like Domains By Proxy, a Joystick Division investigation indicates.

 

Then, when it came time to put together the GameCyte team, he staffed the site exclusively with TriplePoint PR employees – his former account executive the site’s most prolific reviewer. And by Mr. Kain’s own admission, some of the highest-reviewed games on GameCyte are from Telltale Games – a company he just so happens to be invested in.

Venture Beat's Dean Takahashi offers additional info:

In a phone call with me today, Kain said, “I f***ed up in terms of the degree of disclosure.” He noted that he had links to both firms on his Facebook page but neglected to disclose the ownership in the “about” page for GameCyte. Now the “about” page has been changed to include the disclosure...

 

 You can put this one down in the “major whoops” column. It’s going to be hard for people to give the PR firm the benefit of the doubt and to trust GameCyte’s reviews, given how the relationship was unearthed. But so far, it doesn’t look like anything worse than bad judgement.

GP: We linked to GameCyte twice last week on stories which added follow-up information to the Activision piracy lawsuits revealed recently on GamePolitics. Activision is not listed among Triple Point's clients.

According to a report on GameCyte, a second defendant in Activision's campaign of secret lawsuits against alleged game pirates has spoken out, albeit briefly.

The news that Activision secretly sued a half-dozen private citizens for pirating its games was broken on GamePolitics last Friday.

As did a previous defendant, the unnamed pirate said that he too paid Activision much less than the huge amount listed in court documents. Apparently afraid to go into any sort of detail, he simply told GameCyte:

I wasn’t doing anything more than an average college student does with torrents or MP3s, so it’s surprising companies like this are wasting time on people with little money.

GP: Interesting comments. It would seem that Activision owes consumers an explanation of just what went on with these cases.

On Friday GamePolitics revealed that Activision has been quietly suing private citizens who are alleged to have pirated some of the mega-publisher's console titles.

According to a report posted on GameCyte last night, one of the defendants has spoken anonymously about the case and criticized Activision's tactics:

Asked the extent of his guilt, our source was unwilling to provide concrete details. “There was some [wrongdoing],” he admitted. But over the course of a brief telephone conversation, he remained adamant that the punishment did not suit the crime. Audibly shaken, our contact explained how he was scared into a costly settlement by attorneys who determined how much to sue based not on the actual material infringed, but on his purchase history, the equity on his home, and the number of cars in his driveway.

 

If he were to get an attorney, he was informed, he would have to pay even more...

 

Though the defendant believes that Activision shouldn’t be ruining lives over the matter, he told us that his in particular was “not totally” ruined, in part because the $100,000 figures touted in the lawsuit were inflated for shock value. Though he said the monetary loss was still substantial...

GP: The GameCyte report provides an important defendant's perspective to Activision's tactics. In regard to the anonymous pirate's comments about the amount of the settlements, the figures cited by GamePolitics came directly from court documents which we included with the original article. According to those documents, three cases were settled for $100,000, one for $25,000, one for $1,000, and one remains pending.

To be sure, there are lingering questions about the case:

• what exactly did the "Activision Six" do? Not file-sharing, an attorney for the publisher told GP, but beyond that we are left to guess. Cracking? Mod chipping? Disc reproduction?
• why did Activision keep the lawsuits secret? Isn't deterring other prospective pirates a major reason to bring such actions?
• what did Activision know of the tactics its lawyers employed? If GameCyte's source is correct in his assertions, he was persuaded not to exercise his right to counsel.
• why did Activision pursue this course, as opposed to a more coordinated, industry-wide strategy? Activision, of course, dropped its membership in publishers group ESA earlier this year.

An attorney who has represented Activision in six recent copyright lawsuits involving video games has told GamePolitics that the legal actions were not related to file sharing.

Karin Pagnanelli, a partner with Mitchell Silberberg & Knupp, wrote in an e-mail:

While we don’t comment on litigation involving clients, we can advise you that we have never filed any litigation against a file-sharer on behalf of Activision.
 

GP: It would appear, then, that the six defendants we reported on in our earlier story were sued for something more complex than mere file sharing.

Activision, the largest and richest video game publisher in the world, has, since 2007, been quietly suing individuals for copyright violations in relation to its console games. Most often, Call of Duty 3 is mentioned in court documents.

Edge Online reports today that Activision is suing a New York man in federal court for copyright violations in relation to unauthorized distribution of the Xbox 360 version of Call of Duty 3.

But the New York defendant is not the only target of Activision's attorneys. GamePolitics has been researching the story and we've learned that Activision has engaged in a pattern of such lawsuits, in most cases garnering big settlements from individuals who are apparently not represented by counsel and who, as part of their settlements, agree not to discuss the case.

If the tactics are reminiscent of the draconian measures used by the Recording Industry Association of America (RIAA), that may not be an accident. Activision's lead attorney on the cases, Karin Pagnanelli, has worked on numerous copyright cases on behalf of clients in the music business.

Activision video game lawsuits uncovered by GamePolitics include cases against six defendants:

• a Washington man, apparently unrepresented by counsel, agreed to pay Activision $100,000 (CoD 3 Wii, CoD 3 Xbox 360) to settle the case.
• a South Carolina man, also apparently unrepresented, agreed to pay Activision $25,000 to settle the case. (CoD3 Wii, Tony Hawk's Project 8, Xbox 360).
• a New Jersey man, apparently the only defendant who had an attorney, agreed to pay Activision $100,000 (CoD 3 Xbox 360).
• a Minnesota woman, apparently with no attorney, agreed to pay Activision $1,000.
• a second South Carolina man agreed to pay Activision $100,000 (CoD 3 Wii, Cod 2 The Big Red One PS2, Tony Hawk's Project 8, Xbox 360). He too was apparently unrepresented.
• a New York man's case is still active (CoD3 Xbox 360).

It is unknown whether the copyright violations occurred in the course of file sharing, or whether there was some more complex mechanism afoot. Activision's court filings do not specify the manner in which their copyrights were violated, or how they came to learn of the violations.

GamePolitics contacted Activision's lead attorney Karin Pagnanelli several months ago while researching the lawsuits. Our call was not returned. More recently, a call to the New Jersey defendant's attorney was not returned. Nor was a call to one of the South Carolina defendants. That's perhaps not surprising. Each defendant's settlement contains language which would make anyone think twice about discussing the case:

Defendant shall not make any public statements that are inconsistent with any term of this Stipulation to Judgment and Permanent Injunction

UPDATE: Activision's attorney contacted GP to say that the cased were not based on file-sharing.

UPDATE 2: Although their identities are clearly a matter of public record in the court file, I've removed the names of the six defendants due to privacy concerns which were expressed to me.

As GamePolitics reported earlier this week, Take-Two Interactive's deal with Grand Theft Auto creators Sam and Dan Houser expires in February.

The brothers' free agent status is likely to produce a bidding war for their services, and Activision Blizzard CEO Bobby Kotick may have engaged in some advance recruiting, according to Silicon Valley Insider:

A second after telling Goldman Sachs’ Mark Wienkes at the company’s investor conference today that he couldn’t talk about the co-creators of the hit [GTA] franchise, Kotick had this to say:

 

We (Activision) really embrace the individual studio model. We know how to take studios and talented teams and appropriately incentivize them. We’ve definitely become the destination location for independently minded entrepreneurial talent.

 

Translation: Housers, come work for us
 

Famed Nintendo designer Shigeru Miyamoto (#73) and Activision Blizzard Chairman Bobby Kotick (#72) are the only two video game luminaries to make the Vanity Fair 100, writes Newsweek's N'Gai Croal:

[Miyamoto & Kotick's] respective rankings...sandwiched between architect William McDonough and the aforementioned cybergossip Matt Drudge--are a full 40 spots below where [former CEO Larry] Probst and Electronic Arts placed just a few years ago. (For what it's worth, EA CEO John Riccitiello did not make the list, which may provide more incentive to close that deal with Take-Two.)

 

And this despite the videogame industry tracking to record revenues for the year. We're not sure what the solution is--it's difficult to picture Vanity Fair's silver-haired editor Graydon Carter raiding in WoW, rocking out with Guitar Hero or working out to Wii Fit--but videogame's top talents can't outrank on-their-last-legs performers like Robert De Niro (#59) and Mick Jagger (#61), something's rotten at [deal-making restaurant] Michael's.
 

GP: On the other hand, Sony's Howard Stringer (#39) and Bono (#36), who owns a piece of Pandemic (Mercenaries 2) are also on the list. True, games may not be their primary focus, but still...

At #2 is Rupert Murdoch who owns the game-hatin' Fox News.

As expected, Electronic Arts has once again extended its deadline for Take-Two Interactive stockholders to tender their shares at $25.74. The new deadline is August 18th.

EA is apparently beginning to make some progress in its bid to acquire T2. The game publisher says that 11,741,339 shares have been tendered under the offer, nearly double the amount turned in when the previous deadline expired in late June. That is almost certainly related to T2's sagging share price of late. The stock has been trading below EA's offer price, making the deal more attractive to shareholders. TTWO closed on Friday at 25.04

This morning's EA press release links the extension to the Federal Trade Commission's review of potential anti-trust implications:

Extending the tender offer allows the FTC review process to continue. The proposed transaction is still subject to certain conditions that include regulatory approval. EA retains the right to terminate the offer if the conditions are not satisfied.

Coming up later today: Take-Two's obligatory press release explaining why, in its view, EA's offer is a bad deal for shareholders.

UPDATE: Wow, that didn't take long. In a press release which followed EA's by less than an hour, Take-Two, as expected, slams EA's offer. T2 chairman Strauss Zelnick alludes to "multiple" suitors, but does not name them (Activision? Ubisoft?):

We are fully engaged in a formal process to evaluate strategic alternatives that have the potential to deliver greater value than EA's inadequate offer. As part of this process, we continue to engage in meaningful discussions with multiple parties, a number of whom have been conducting due diligence.

UPDATE: In a lively interview wiith VentureBeat's Dean Takahashi, EA CEO John Riccitiello touches on the T2 deal:

Having clever verbal sword play about Take-Two doesn’t really matter. I’m not really playing for a headline in the New York Times...

 

I don’t think we’ve played a poker hand. We have expressed our interest. We have made a public bid. We are in the Hart-Scott-Rodino antitrust review. All of the information has been disclosed. We’re playing it to the way we’ve said we would play it. There have basically been three moves and there have 6,000 articles on it. It’s sort of amusing. I feel a little bit like those strobe light things where it looks like a guy is moving a lot. The flash goes off but the body doesn’t move. Every time a flash goes off, somebody writes a story on it. To be honest with you, the last time there was news was a couple of months ago.

The New York Times' Deal Book blog speculates today that Activision Blizzard may be eyeing an acquisition of Grand Theft Auto publisher Take-Two Interactive.

Electronic Arts, of course, has been chasing T2 for most of 2008 and has a tender offer outstanding. EA's problem, however, is that T2 shareholders just aren't jumping on board so far.

Analyst Mike Hickey of Janco Partners told the Deal Book:

We absolutely believe Activision will take a look at Take-Two. If a competitor is for sale, you take a look, and if EA is your real rival, why wouldn't you stir the pot a little bit?

However, UBS Securities analyst Ben Schachter pooh-pooh any such deal:

It is highly unlikely that Activision would try to outbid EA. They have enough on their plate at the moment.

The oft-quoted Michael Pachter of Wedbush-Morgan had his own opinion:

There are only three players involved — EA, the FTC and the arbs. Is EA likely to withdraw or lower their offer? No, because they want Take-Two. The odds of the FTC not approving the deal on market concentration is virtually zero. And if the arbs want to sell the stock, they'll sell the stock — they don't care what [T2 chairman] Strauss Zelnick thinks the stock is worth.

Variety's Ben Fritz serves up some new info on Activision's recent departure from the ESA, although his interview with CEO Bobby Kotick raises as many questions as it answers.

While Kotick's comments to Fritz seem to indicate that Activision's departure from ESA is only temporary, actions always speak louder than words and the monolithic game publisher is apparently hiring its own exec to handle government relations. That would include things like lobbying and First Amendment issues. 

Here's what Kotick told Fritz:

I said don't view [pulling out of ESA] as anything but time off... With the combined companies [from the merger with Vivendi], the [ESA membership] dues went up enough that I said for it to make sense [to spend that money], we have to make a strategic plan. We don't have that because nobody owns it for us right now.

 

We have our own issues that are not the industry's issues. Our challenges are sufficiently different from other publishers' issues that we need our own point person. We'll have someone soon.

The Activision-specific issues reference by Kotick include Blizzard's enormous WoW subscriptions as well as substantial dealings in China. So, will Activision ever return to the ESA fold? Kotick said:

We'll consider it.

Mike Musgrove of the Washington Post reports that the Activision-Vivendi merger is now official, following a vote by 92% of Activision shareholders to approve the deal.

The new company will be known as Activision Blizzard. We hope to see a new logo unveiled, as opposed to mock-ups, like the one at left, which can found around the web.

Referring to EA's now-former status as the biggest kid on the game industry block, Wedbush-Morgan analyst Michael Pachter told Musgrove:

It's good to have a duopoly instead of a monopoly. This just makes the industry that much more interesting.

An attempt to block Activision's merger with Vivendi has ended with a ruling issued by William B. Chandler III (left), chief judge of the Delaware Court of Chancery.

As reported by the Wall Street Journal Law Blog, the judge has apparently taken notice of what World of Warcraft - one of the leading assets in the merger - is all about.

In denying a municipal pension plan's request for a preliminary injunction which would have put the Activision-Vivendi marriage on hold, Judge Chandler wrote:

In some ways, perhaps, the world of Mergers and Acquisitions is a massively multiplayer role playing game as well. Like in World of Warcraft... the participants in the M&A field take on certain roles, interact in their own community, hone specialized skills, and even develop a unique, somewhat curious vernacular.

 

One particular quest in the world of M&A is disclosure litigation. In the instance of disclosure litigation presently pending before this Court, the world of M&A meets the World of Warcraft.

 

In the role-playing game that is this disclosure litigation, both sides have played their respective roles well. Like any game, this one has rules, and the most essential rule of disclosure is materiality. Because the plaintiff could not establish the materiality of its final three disclosure claims, the motion for a preliminary injunction is denied. . . .GAME OVER.

GP: Very cool, indeed, your honor. Read the full decision here (31-page pdf).