Blizzard announced today that it has banned an undisclosed amount of Battle.net users for using cheats and hacks while playing StarCraft II: Wings of Liberty online. Here is the official word from Battle.net:

During a panel last week at the Design Innovate Create Explore summit, Blizzard front man Mike Morhaime explained exactly what happened to StarCraft: Ghost. Apparently, as Blizzard was developing its first MMO World of Warcraft and StarCraft II, the company had to make a hard decision on where it wanted to put its resources. That choice ended up being World of Warcraft and StarCraft II, which lead to the cancellation of the action game based loosely on its popular RTS series.

"We have to choose, we can't do everything," he said during the panel. "Our vision for what's possible directs that. We like complex games and we like casual games."

"They were working on StarCraft Ghost the same time we were working on World of Warcraft and StarCraft II," Morhaime continued, "World of Warcraft exploded and we needed to make some resource decisions. It just wasn't an environment in which a project like (StarCraft Ghost ) could succeed."

I am sure that Blizzard (and other MMO companies) is delighted with today's press release from World of Wacraft gold reseller outfit BYGamer. While the press release isn't particularly thrilling one could imagine that the China-based gold farmers are not well liked on this side of the world.

The company issued a press release to announce changes to its web site - BYGAMER.com - which now offers visitors a plethora of fancy colors, improved navigation and lovely new frames. Are they mocking Blizzard? It sure seems that way.

The company tops off its wonderful announcement with customer testimonials:

"It’s amazing! What a beautiful site and Buy WOW Gold here is absolutely a good choice!, said new customer Monica to one of BYGAMER’s call center operators.

The company says that this new design is already proving to help "increase traffic and sales."

Full release below:

Ryan Winzen's Starcraft II mod, World of StarCraft, has been rebranded as "Starcraft Universe," and Blizzard apparently approves of the name change and the direction of the mod after lawyers for the company talked to Winzen at length.

The focus of the mod remains the same, though Winzen has said that many misunderstood the multiplayer aspect of it, calling it an "MMO." That confusion did not help Winzen win any affection with Blizzard. Thankfully, all of that - including the name of the mod - is now water under the bridge.

It has been interesting journey for Winzen, who in the process of defending his modification, gained the favor of Blizzard and got a job offer from Riot Games (makers of the DOTA-like online game League of Legends). Blizzard has even offered to fly Winzen out to its headquarters to meet the StarCraft II development team.

Blizzard Entertainment announced some of the things fans can expect from the sixth annual BlizzCon gaming convention, this year taking place at the Anaheim Convention Centre in Anaheim, California October 21 - 22.

This year's event dedicated to all things Blizzard (StarCraft, Warcraft, and World of Warcraft) promises hands-on play time with the latest Blizzard games (we assume that means players will get to try out Diablo III, the latest chapter in the StarCraft II series, and any new WOW stuff Blizzard has planned), casual and competitive tournaments for players of all skill levels, community contests with special prizes, "commemorative" merchandise based on the company's various game universes, and the usual assortment of keynotes, workshops, and discussions.

World of Warcraft gold sellers using PayPal as their preferred method of payment are getting a surprise from the wholly-owned eBay subsidiary: a threatening letter.

Last week Blizzard sent out complaints to PayPal, accusing gold and virtual property resellers of " intellectual property." This week PayPal jumped on a number of companies, issuing the following letter:

"You were reported to PayPal as an Intellectual Properties violation by Blizzard Entertainment Inc. for the sale of World of Warcraft Merchandise.

If you feel your sales do not infringe upon the intellectual property rights of the Reporting Party, please complete the attached Objection to Infringement Report by January 21, 2011."

Companies can certainly appeal the ruling (to what end we do not know), but to be compliant they have to cease their activities and remove all incidents of "intellectual property violations. "

Organizers of the Game Developers Conference revealed more happenings during its 2001 event including new lectures and details on the Game Developer Challenge. Blizzard Entertainment's Tom Chilton (game director, Cataclysm expansion and lead designer on Burning Crusade and Lich King) will deliver a presentation called "Remaking the World of Warcraft through Cataclysm." The presentation details what approach the design team took when creating the expansion, including what does and does not work when trying to recreate and revitalize existing content.

Correction:An earlier version of this story erroneously reported that Blizzard / Activision had served the maker of the World of StarCraft mod with a "Cease and Desist" letter. This was not the case, and we have corrected the record, headline, and story below to reflect that. Apologies to all parties involved. Corrected story below: 

Activision has made a copyright infringement claim on YouTube, successfully getting a mod makers video removed from the service. The developer of World of StarCraft, an online StarCraft 2 MMO mod that combines the lore and gameplay elements of both games. Naturally the mod maker known only as "Ryan" is hurt and shocked by this action. Speaking at length on the mod's official forum, Ryan appeals to Activision to give him a break:

The NPD Group said total video game sales for the year were $18.58 billion, compared to sales of $19.66 billion for 2009, and $21.4 billion in 2008.

Console hardware sales were down 13 percent and new video game software sales dipped 6 percent year-on-year. Sales of new and used games and downloadable content were flat (or down one percent), NPD estimates. Video game accessories jumped 13 percent above 2009's numbers, thanks to Kinect and Move.

Blizzard Entertainment's World of Warcraft: Cataclysm, the third expansion for its popular massively multiplayer online role-playing game, has "sold through" more than 4.7 million copies in its first month of release. Blizzard claims that this milestone sets a new record for monthly PC-game sales. The numbers are based on "internal company records," digital distribution numbers, and "key distribution partners."

World of Warcraft: Cataclysm was simultaneously released in the United States, Canada, Mexico, Argentina, Chile, Europe, Russia, Southeast Asia, Australia, and New Zealand on December 7, and became available in Korea and the regions of Taiwan, Hong Kong, and Macau on December 9.

For more information visit www.blizzard.com/games/cataclysm.

Video game retailer GameStop reported record sales of $3.02 billion for the nine-week holiday season that ended on January 1. This marked a 5.4 percent increase over the same period last year, driven by Kinect sales, and "strong sell through" of PlayStation 3 and Xbox 360 titles such as Call of Duty: Black Ops and Assassin’s Creed: Brotherhood. The company also reported 32 percent growth in gift card sales during the month of December.

New hardware sales improved 7.4 percent based mostly on the successful debut of Microsoft's Kinect. New video game software sales increased 3.3 percent.

Activision Blizzard vice president and chief public policy officer, George Rose pens an editorial in the San Francisco Chronicle explaining why the "California ban of violent video games must go." One would expect that the opinion of a pro-industry lawyer would be that the law penned by State Senator Leland Yee and signed into law by Governor Arnold Schwarzenegger in 2005 would be that it is wrong-headed over regulation and overreach on the part of the state.

The bulk of his ire is pointed at supporters of the law, who grasp at straws like "Postal" and cite studies that back up their positions on violent games:

According to a new study by Arizona-based research firm ABI Research, the worldwide online gaming market will be worth slightly more than $20 billion in 2012. These revenues will be driven by demand in North American, European and Asia Pacific markets, and by new devices and technologies, the firm said.

The Asia-Pac region - most notably China - will be the "engine behind much of this growth." 

"According to industry analyst Michael Inouye, "World of Warcraft, for instance, generates significant revenue for Activision in Europe and North America on a subscription basis. But in China, despite a large ‘subscriber’ base, the revenues are far smaller: it's more of a pay-as-you-go model (prepaid game cards). This also creates a greater reliance on ‘cloud’ or server-based games."

While Blizzard was launching its biggest product of the year, behind the scenes it was having some serious problems with a data leak in China, according to a report on VentureBeat. According to that report, citing several news stories from MMOGameSite, Blizzard's release schedule and subscriber numbers were leaked from its China offices, and the general manager of the studio, Ye Weilun, was subsequently fired for it - allegedly.

While we can’t find correlation anywhere, Cowen Group analyst Doug Creutz states in a research note that China’s NetEase has submitted Activision Blizzard’s StarCraft II to Chinese government authorities for approval.

In his note Creutz wrote that “Although the timing of governmental approval is (as always) uncertain, we believe the submission likely means a launch of 'Starcraft II' sometime in 2011.”

The analyst called this “welcome news,” as the game represents NetEase’s “next clear growth catalyst."

NetEase issued third quarter results today, reporting total revenues of RMB 1.4 billion (approximately $215.1 million) for the three-months ending September 30, versus total revenue of RMB 879.4 million in the same quarter one year earlier.

Blizzard Entertainment announced the release of the new Battle.net Dial-in Authenticator. The Battle.net Dial-in Authenticator is a tool that provides another layer of security against "unauthorized account access." The Battle.net Dial-in Authenticator is a free opt-in service that will actively monitor an account and request additional authorization from the user when a "potentially unauthorized login attempt occurs."

Here is more on how it works:

It was bound to happen sooner or later. It was inevitable that a mod for Warcraft III recently trademarked by Valve would put the two companies at loggerheads. Speaking at BlizzCon over the weekend Blizzard’s Entertainment EVP Rob Pardo said that he was confused by Valve's trademark. His confusion relates to the Defense of the Ancients mod. During the annual all-things-Blizzard fan event the company unveiled a new StarCraft II multiplayer map inspired by the popular mod. This got journalists at the event talking and seeking opinion from Blizzard.

When asked about Blizzard's trademark, Pardo said the following:

"To us, that means that you're really taking it away from the Blizzard and Warcraft III community and that just doesn't seem the right thing to do," Pardo told Eurogamer.

Pardo added that there was "a little bit of confusion" on his part about Valve's trademark.

Earlier this week at the beginning of BlizzCon, Blizzard Battle.net director Greg Canessa told Joystiq that the company had "miscalculated" how users would respond to its Real ID plans earlier this year. The short story is that most users freaked out. While some parts of the Real ID system were implemented, the company ended up adding an opt-out option for those that were vehemently opposed to it.

Canessa laid out some of the lessons the company learned from what happened:

"The vision behind Real ID was to maintain parallel levels of identity: we have that sort of anonymous character level of identity, and then that Real ID tier that spans games, and there are incremental features that you get for being part of the Real ID community," he said.

In a complaint filed on October 4 (thanks GameSpot), Blizzard Entertainment has targeted a trio of men, accusing them of creating and selling hacks for the Blizzard game StarCraft II.

Filed in the U.S. District Court for the Central District of California, the complaint names Michael VanKuipers (aka “Perma” or “Permaphrost”), Michael Simpson (aka Matt Cooper, “Cranix,” or “Cranyx) and John Roe (aka linuxawesome). 10 “John Does” are also named.

In response to a story from earlier in the week that Blizzard was banning players from StarCraft 2 who used trainers or cheats in the game’s single-player component, the company issued a clarification.

A story on the Cheat Happens website alleges that Blizzard is banning users who cheat in StarCraft 2 while playing the title’s single-player element.

The website hosts a variety of “trainers” for the Blizzard game, which can grant unlimited ammo and/or other special powers and attributes to players trying to advance through the title’s single player campaign. The site claims that some banned users had their Battle.net accounts suspended, while others saw their CD keys disabled.

One Cheat Happens user named gm0ney received a 14-day suspension for using an “unauthorized cheat program.” While he admitted he was “prepared for it,” gm0ney added, “I’m surprised they took such a blind step without doing some research into the games played.”

Activision Blizzard has signed on to help President Obama's STEM initiative, which encourages literacy in science, technology, engineering and math. Activision Blizzard will lend support to the Change the Equation, a non-profit organization that brings together CEOs and teachers with the goal of increasing awareness and interest in STEM education.

Naturally, Activision Blizzard plans on using video games to promote interest in STEM fields.

"Investing in, and collaborating on STEM education has been a priority for our company," said George Rose, Chief Public Policy Officer at Activision Blizzard. "STEM literacy is a business imperative for our nation's economic excellence, success and citizenship. Our collaboration will not only help students, but will revive our economy, fuel our competitiveness, and ultimately empower our nation."

Activision Blizzard joins Time Warner Cable, Sally Ride Science, Kodak, Intel and Xerox as part of the Change the Equation effort.

It’s not quite the prerequisite one might be used to seeing for a college course: “basic knowledge of and experience playing StarCraft.”

The University of Florida is offering a class utilizing StarCraft, in order to assist in the teaching of resource management skills, a theory which Ph.D Candidate and instructor Mate Poling outlined for the Technology Review (thanks Joystiq), saying, “In StarCraft you're managing a lot of different units and groups of different capacities.”

He added, “It's not a stretch to think of that in the business world or in the work of a healthcare administrator.”

Additionally:

Poling points out that people who manage hospitals, factories, small businesses and, say, nuclear power plants all have to manage people who have different abilities, and that they might have learned a thing or two about this process from StarCraft, which demands the same kind of resource and unit management.

Blizzard and Chinese game operator Net Ease will officially launch the World of Warcraft expansion Wrath of the Lich King just a few short weeks after it was finally approved in the Asian country.

According to a joint press release from Blizzard and Net Ease, the expansion will go live in mainland China on August 31, almost two years after it was launched (November 2008) in Europe and North America.

Net Ease CEO William Ding stated, “We are fully prepared on all fronts to provide great service and support to all of the new and returning players throughout China, and we look forward to welcoming them to Northrend.”

In case you missed it, World of Warcraft developer Blizzard recently scored a whopping $88,594,539 judgment against a company that was operating and charging players to access World of Warcraft emulator servers.

The ruling was handed down on August 10 by the U.S. District Court of the Central District of California and targeted Alyson Reeves, who was operating under the business name of ScapeGaming. The huge dollar figure was calculated by combining the $3,052,339 the defendant received from users of her service via Paypal, statutory damages of $85,478,600 (calculated by multiplying ScapeGaming’s 427,393 users times the statutory minimum of $200 per “act of circumvention and/or performance of service”) and another $63,600 in attorney’s fees.

Additionally, if Reeves has trouble paying, she will see post-judgment interest accumulate at the “rate provided by law” until the entire sum is recovered.

Court documents reveal that up to 32,000 players were using the organization’s servers each day.

A statement from Blizzard on its victory read:

Another day, another story about StarCraft II moving massive units at retail. According to NPD Group retail data for the month of July, StarCraft II was the top-selling game for the month in the United States, beating out console games like NCAA Football 11 and LEGO Harry Potter.

Blizzard’s real-time strategy game sequel for PC sold 721,000 copies at retail stores in July, making it the top-selling game of the month. Compare that to NCAA Football 11 from EA Sports, which hit the 692,000 units mark during the month (Xbox 360, PS3, PS2). The only other game that came close was Lego Harry Potter, which sold an impressive 401,000 units across multiple platforms during the month.

You could probably already guess that Blizzard's BitTorrent offering of StarCraft II is pretty popular; after all the game is selling like crazy online and as a digital download. But according to TorrentFreak the game has one other dubious distinction: it is also the most sought after illegal download as well.

According to TorrentFreak, in its first 24 hours after release more than 100,000 copies of the game were downloaded online via peer-to-peer networks. That's good news for Blizzard, but TorrentFreak says that 50,000 people are actively downloading and sharing more than 260,000 copies of the game.

TorrentFreak believes it’s possible StarCraft II could be the most popular game downloaded via BitTorrent - both legally and illegally. It is at least the most pirated game software title of 2010:

File this following story under "no big surprise." Blizzard's StarCraft II: Wings of Liberty has sold 1.5 million copies to date. Blizzard says that the game also has the distinction of moving 1 million copies worldwide, making it "the bestselling PC game of 2010 within its first 24 hours of availability." StarCraft II: Wings of Liberty was released simultaneously in North America, Europe, South Korea, Australia, New Zealand, Russia, Brazil, Chile, Argentina, Singapore, Indonesia, Malaysia, Thailand, the Philippines, and the regions of Taiwan, Hong Kong, and Macau on July 27 to more than 8,000 stores throughout the world - who opened their doors at midnight to celebrate the game's release.

I have to say I am not shocked at all. Here's more from Mike Morhaime, CEO and cofounder of Blizzard Entertainment.

Uniloc, which specializes in computer security and copy protection initiatives, has filed a lawsuit against Sony Corp. of America, Activision Blizzard, Aspy Media—and a handful of other software companies—alleging that the defendants infringed on a Uniloc patent which centers on a system for registering software.

The Orange County Business Journal pointed us towards the lawsuit, which was filed in the United States District Court for the Eastern District of Texas, Tyler Division, on July 29. Additional defendants include Borland Software corp., McAfee, Inc. and Quark, Inc.

Kyle Orland's The Game Beat explores who gets hurt by Blizzard's decision not to allow launch day reviews of StarCraft II: Wings of Liberty, and surprisingly it seems to be critics. It obviously doesn't hurt consumers, who based on reputation and expectation decided to pre-order the game in droves and it certainly didn't hurt Blizzard, who analyst say will make a killing off the sequel to the popular 11 year old original strategy game.

It is critics who ultimately feel the sting of an embargo that makes them, just like everyone else, wait to play the game - and the scramble to get a review up quickly may in fact hurt their credibility; after all, who wants to read a half-hearted hastily written review on a game? Consumers (if they don't they should) demand an honest and thoughtful process, particularly on AAA. Finally, it's important to note that well known and much loved franchises could follow the precedent set by Blizzard. After all, why take a chance on bad reviews impacting launch window sales?