Zynga and Digital Chocolate have settled a lawsuit over the Facebook game Mafia Wars. Digital Chocolate sued the world's top Facebook game maker in August of last year over its Mafia Wars mobile game released in 2004. The company alleged that Zynga infringed on its copyright. Even though Digital Chocolate claimed ownership of the name, Zynga attempted to trademark the name with the US patent office. In 2009 Zynga settled with Mob Wars creator David Maestri, who alleged "strong similarities" between Mafia Wars and Mob Wars.

Terms of the settlement were not disclosed.

On a related note Digital Chocolate has secured series D investment of $12 million from Intel Capital, with further funding from prior investors Sutter Hill Ventures and Bridgescale Partners. Today's announcement brings the total amount of investment in the company to right around $43.9 million.

In yet another editorial masquerading as a news report (the last one being the whole Carole Lieberman "Games cause Rape" story), Fox News writer John Brandon takes another shot at stirring the pot about Epic Games' Bulletstorm. In his latest article, Brandon uses the censorship of the game in Germany as a jump-off point to attack Rock, Paper, Shotgun's dissection of his first article, to claim that "anyone" can buy the game online, and to throw some more quotes around. Of the censorship in Germany, Brandon opens by baiting gamers with the line: "It's too violent for Germany. But it's okay for America?”

Stories from All Things Digital and the New York Times report that Farmville and CityVille maker Zynga managed to raise $500 million in investment based on a valuation of $7 - $10 billion dollars. The Wall Street Journal contradicts that $500 Million, reporting that the company raised around $250 million.

All Things Digital claims that "Zynga has already raised more than $500 million from a panoply of Silicon Valley VCs, such as Kleiner, Andreessen Horowitz, as well as Russia’s DST Global."

The New York Times report goes on to say that the investment may "pave the way for an initial public offering next year."

Rep. Edward J. Markey (D-Ma.) has asked the Federal Trade Commission to take a closer look at the marketing practices of applications on Apple's App store and Google's Android Marketplace. Markey's concerns relate to programs geared towards children that may not adequately inform users of potential charges - particularly micro-transactions.

On Tuesday Markey sent a letter to FTC Chairman Jon Liebowtiz (and copied to Google and Apple), pointing to a story in The Washington Post about how in-app purchases on iPad, iPod and iPhone games such as Smurfs' Village and Tap Zoo have caught some parents off guard. The Children apparently used parents' passwords to buy in-game items instantly.

"I am concerned about how these applications are being promoted and delivered to consumers, particularly with respect to children, who are unlikely to understand the ramifications of in-app purchases," Markey wrote in the letter.

EA has responded to a recent Fox News story that asked the question "Is Bulletstorm the Worst Video Game in the World?" and (thanks to one participant) made the amazing claim that the increase in rapes can be attributed to playing games. There were other amazing claims in the report, but the most disturbing words came from Psychologist Carol Lieberman, who insisted that there was a correlation between playing sex scenes in games and rape. She told Fox news:

"The increase in rapes can be attributed in large part to the playing out of [sexual] scenes in video games." Of course, there is no research to back up her claims that we are aware of, but the truth should never get in the way of a good talking point.

Facebook has added two new services to its Facebook Credits virtual currency called "buy with friends" and "frictionless payments." App developers will be able to implement these features into their games, adding some small measure of enhancement above what can be done currently with proprietary virtual cash. The "buy with friends" service allows users to spam share discounts on virtual items with friends (who are playing the same game) via the news feed. "Frictionless payments" are smaller sized Facebook credit blocks that can be purchased in small increments. This allows users to spend a little bit of money to buy 30 credits or less for the purchase small in-game items.

The official Bulletstorm Twitter feed reports that its parody download of Call of Duty (to promote the upcoming action game Bulletstorm) has been downloaded approximately 1,250,000 times.

From the Twitter feed:

"1.25 million Duty Calls downloads!"

"We say thanks with Duty Calls Wallpapers over at our Facebook page."

Duty Calls is a parody of the Call of Duty series - and of the first-person shooter genre in general - designed to promote the upcoming release of People Can Fly's and Epic's first-person arcade action game Bulletstorm.

The game is set for release on multiple platforms February 22.

Source: C&VG

Electronic Arts plans to put more effort and resources into creating Facebook games. During this week's conference call to discuss financial results, EA's Chief Operating Officer John Schappert said that the company is heartened by an increase in players on the platform this year. Last year Facebook made changes to the way games could send messages to other users, which in turn made developers' live a bit more difficult.

"Last year we saw a drop off in games related to changes on the Facebook platform, but we are encouraged by the recent turnaround," said Schappert.

"We’re seeing an increase in game traffic on Facebook and believe the site has stabilised with a current estimate of 290 million gamers playing an average of 3.5 hours per month," Schappert continued.

EA's Playfish subsidiary (which it acquired in 2009 for $400 million) is the second biggest game publisher on the platform behind Zynga.

Unfortunately, we can't embed the video here, but Fox News' "Fox & Friends" host Gretchen Carlson moderated an interesting segment about the proper amount of video game screen time for kids. The discussion featured "Reality is Broken" author and game developer Jane McGonigal, and Susan Maushart, author of the book "The Winter of our Disconnect."

What is most interesting about the segment is the level of civility of all involved. Discussions about video games and the effects on children can often get out of control as two diametrical views collide and the moderator drops the ball or interjects their own opinions on the subject.

A 29-year-old man from England accused of stealing virtual chips in Zynga's Facebook poker game has found himself in some real world trouble this week. Ashley Mitchell faces five charges for his actions, which were substantial according to published reports: he allegedly stole and tried to resell 400 billion chips worth about $12 million.

Prosecutor Gareth Evans said, "The defendant sold around one third of the 400 billion poker chips and looking at the auction history where one can purchase such items he was selling them for around 430 GBP [$696 USD] per billion. By my reckoning the total value if sold on the black market of the 400 billion was in the region of 184,000 GBP [$297,840]."

Mitchell may face jail time due to a previous suspended sentence from 2008 that he will have to serve if found guilty. Given that he has plead guilty to four out of the five charges, it looks like serving jail time is a foregone conclusion.

A new social game called Hospitopia launches on Facebook today. A small portion of the proceeds from the game will go directly to Children’s Miracle Network Hospitals, a charity that raises funds for 170 children’s hospitals.

Hospitopia, created and administered by CausePlay allows the players to create and operate a virtual hospital while generating real funds to help children across the country. CausePlay donates 10 percent of all game revenue to Children’s Miracle Network Hospitals. Users have the option of specifying which Children’s Miracle Network Hospital they’d like to see benefit from their play, which in turn earns that hospital special prizes and incentives while raising money across the network.

TechCrunch confirms that Facebook has made Facebook Credits, its official virtual currency mandatory for all app developers. All app developers will have to include Facebook's currency in its apps beginning July 1. Developers will still be able to offer their own in-game currency.

When Facebook users use Facebook Credits to make a purchase Facebook gets 30 percent of that purchase. TechCrunch says that Zynga is paying Facebook around $30 million a month for its Credits tax, which gives you an idea of how much money they make on digital purchases.

Eventually analysts believe that Facebook credits will be used for more than just buying purple cows and gold coins; eventually they expect that the virtual currency will be used to purchase other things.

Zynga is apparently trying to enforce a trademark on games with the name "ville" attached to them, according to this GameIndustry.biz report. The court action was aimed at a developer and game called "Blingville." The action against Blingville has apparently been in the works since November of last year, but last week Blingville responded by filing a declaratory judgment statement.

That judgment stated that its game's title constituted a "fair use" of the trademark. The declaratory judgment statement also asks the courts to order Zynga to pay Blingville's attorneys' fees, costs and other expenses incurred because of the court action.

The Facebook version of the online strategy game Evony - that game with all the ads that involve cleavage, even though there's no actual cleavage in the game - may have saved a man's life. 51-year old Robert Chambers, who suffers from muscular dystrophy, says that a fire started by a toaster began to fill his house with smoke.

Because of his disability, Chambers was unable to directly call police on the phone, so he turned to the Evony chat room. He asked people in the chat to call the fire department. Ten minutes later they arrived and took him out of the house.

While there was no serious fire (only a toaster was lost), Chambers credits the game and its players for getting him help quickly. His wife, who openly hates the game, says she cannot complain about it anymore because it may have saved her husband's life.

Don't worry Mrs. Chambers, the entire Internet will take up the extra slack for you.

In an email response to the Comcast-NBC Merger, internet rights group Free Press calls the freshly approved merger a "Comcastrophe." It’s a noun. A partial statement from Joe Silver, Free Press CEO and President, follows:

According to a VooDoo Extreme report, Riot Games, makers of the online strategy game League of Legends, has fired a customer service representative who live-streamed his misuse of administrative powers during a League of Legends bout. According to the report, the Riot Games employee "verbally abused a player and inappropriately banned him."

Riot Games' community relations director Steve Mescon announced that the employee has been fired. He added that the company will do a thorough review of its internal policy and training procedures to "prevent such incidents from happening in the future."

More than 100 million monthly active users are playing Zynga's latest Facebook game CityVille, according to Inside Social Games. The game launched six weeks ago and has proven to be a success for Zynga, who also runs Farmville, Mafia Wars, FrontierVille, and Zynga Poker.

CityVille is also the company's first internationally released game, offering English, German, Italian, Spanish, and French versions of the game. Half of the game's userbase is located outside of North America, which means that these different versions of the game contributed significantly to its growing active user base.

A report that found its way to Reuters this week reveals some interesting financial numbers from privately owned Facebook. The document, which was meant for customers of investment firm Goldman Sachs, says that Facebook made $1.2 billion USD in the first nine months in 2010. The company also raked in $355 million in net income.

The source that leaked the document to Reuters told the new organization the "the financial statements were not audited and offered little detail about how Facebook generates it revenue".

"It just shows you that these business can generate 30 percent to 40 percent, potentially, operating margins," said Ryan Jacob of the Jacob Internet Fund, speaking to Reuters. "They probably did at least $500 million in net income in 2010."

Organizers of LOGIN 2011 have put out the call for speakers this week. The annual event dedicated to online and social gaming is looking for speakers and their abstracts to be submitted so they can be properly vetted and approved ahead of the events launch on May 16 - 18 in Bellevue, Washington. Candidates are asked to review the topics of interest and session submission tips on the LOGIN 2011 website and then submit a completed session proposal form with 1,000 word abstract and biography before the deadline of Feb. 13, 2011.

The organizers offer the following five tips for submitting suggestions:

TorrentFreak has compiled the BitTorrent Zeitgeist 2010, a list of the 100 most searched for phrases and keywords on KickassTorrents, one of the top ten most visited indexes on the internet. Using a few hundred million searches a year, TorrentFreak chronicled the most looked for items in the Torrent space.

The top search in the last 12 months was Inception, a movie that also appeared in the site's most pirated movies chart of the year. Four other titles made it into the top 10: Iron Man 2, Avatar, Despicable Me, and Clash of the Titans. Movie-related searches were the most popular among users of the site.

Here is something that is pretty incredible: the entire over world from Nintendo classic The Legend of Zelda: A Link to the Past rebuilt from scratch in Minecraft. According to IndieGames.com, it took creator Roman DeNu over 100 hours to rebuild the over world from the popular SNES game.

Check out the video to see it all in real-time.

Journalist Scott Steinberg is set to speak at the upcoming Festival of Games April 28 & 29, 2011 in the Netherlands. He will be talking about how piracy may be a good thing for the video game industry and how new platforms such as Facebook and online distribution may naturally stamp out game copying.

"Instead of selling a €50 console game, the free-to-play model, where gamers play for free and pay as they go for virtual goods such as better weapons, may actually make more money in the end, while also helping stamp out game copying – and competition," says Steinberg."

Scott Steinberg is the CEO of video game consulting firm TechSavvy Global, and founder of GameExec magazine and Game Industry TV.

The Festival of Games takes place on April 28-29, 2011, at the Jaarbeurs in Utrecht (the Netherlands). The 2010 event attracted over 2000 visitors, with 180 companies from 25 countries.

TorrentFreak reports that the Spanish House of Representatives has rejected new legislation that would have shut down hundreds of legal file-sharing sites. The rejection is a major victory for the tens of thousands of Internet users who launched many protests in recent months.

As TorrentFreak points out, Spain is one of the few countries in the world where its courts have affirmed that P2P-sites operate legally. The Spanish government wanted to change this, and attempted to accomplish this by proposing new legislation. That legislation would have punished sites offering links to copyrighted works without the need for a judicial order.

The Sinde Act was an amendment to the Sustainable Economy Law (LES) drafted by Minister of Culture Ángeles González-Sinde, with input from the United States Government.

The Central Intelligence Agency has launched a special task force to deal with Wikileaks called "WTF," according to The Washington Post. The acronym doesn't equal the Internet standard - it stands for the "WikiLeaks Task Force," but apparently the CIA offices equate it to the popular catchphrase according to the Washington Post.

While we might get a giggle or two from that factoid, the truth is that the CIA is taking the numerous leaks of U.S. documents very seriously, and just what this task force will do in response to future leaks is unknown.

The CIA has remained relatively unscathed from the monumental amount of leaks at other U.S. agencies, mainly because the CIA's systems are separate from the rest of the government. That and the fact that the secretive agency is not in the habit of sharing information with outside sources.

Quebec, Canada-based Frima Studio is donating to Child's Play through its Facebook game, Rock Paper Sumo. The company is donating 100 percent of the proceeds from the purchase of select in-game items to the charity.

The special content is a seven-piece armor set specifically designed with a Child’s Play theme. Items are available individually from $0.49 USD to $1.49 USD, or can be purchased as a complete pack for $5 USD, and are available now.

Rock Paper Sumo is a twist on the classic game rock-paper-scissors, where players attempt to become the ultimate rikishi. Would-be Sumos must train hard, eat lots of calorie-rich foods to put on weight, engage in sparring sessions and fulfill dojo duties. Players spend Bento Bucks and Dojo Dollars on over 200 accessories such as cowboy hats, pink Mohawks, fu manchus, assorted tattoos, and body hair.

Federal Trade Commission Chairman Jon Leibowitz says that he supports the net neutrality proposal put together by FCC chairman Julius Genachowski. In an interview with the Huffington Post Leibowitz said the he supports the new proposals, and sees them as the best first step in getting some kind of net neutrality rules in place.

"There's a little disconnect between the reality of net neutrality and the big fight of net neutrality," said Leibowitz, speaking to the critics that believe it is all about government control of the Internet.

The rest of the interview deals with privacy, which the chairman has been vigorously pushing for this month. Read it here.

The FCC votes on net neutrality December 21.

An episode recap of the MTV's 16 and Pregnant reality show entitled "There's Nothing Wrong with Video Games" follows the trials and travails of teen parents Megan and Nathan. Nathan seems to be more preoccupied with lip rings and dungeon dwelling than being a father, while Megan hasn't grown up enough to give up rainbows and ponies.. There is also a lot of talk about a lack of tough love, but who cares? Let's get to the video game references:

The Federal Trade Commission says that it wants Internet companies such as Facebook and Google to craft their own solutions to privacy problems, but if they are not capable the agency is ready to do it for them, says its chairman. FTC Chairman Jon Leibowitz applauded Microsoft for exploring ways to incorporate the agency's recent suggestion for a "Do Not Track" function allowing consumers to opt out of Web tracking.

However, Leibowitz also said that the FTC is not afraid to use its voice and power to publicly shame companies that do not want to allow this functionality to their users.

"The other part of the bully pulpit is — and the commission is not in this position yet — is we can go and call for legislation. And I think many of the companies who want to do the right thing ... would prefer to do it voluntarily," Leibowitz said to POLITICO during a taping of C-SPAN’s "The Communicators."

Menue Americas Corporation launches its new free-to-play online video game, Zombie Mosh on Facebook and takes advantage of Georgia Entertainment Industry Incentive Act. The Georgia Entertainment Industry Incentive Act gives "qualifying" game developers and publishers a transferrable 20 percent base tax credit on all "qualified expenditures" within the state, such as labor, materials and services. The Act gives an additional 10 percent tax credit if the company promotes the state by placing a Georgia promotional logo in the video game.

Zombie Mosh's creators are not the only zombie-related action in town - Atlanta is also home to AMC's new zombie-themed TV series The Walking Dead.

Braid developer Jonathon Blow doesn't think very highly of Farmville's game design, according to comments he made in a recent interview with Gamasutra. During the course of discussing good and bad game design, the subject turned to Zynga's popular Facebook game:

"When you look at the design process in [Farmville], it's not about designing a fun game," Blow told Gamasutra. "It's not about designing something that's going to be interesting or a positive experience in any way - it's actually about designing something that's a negative experience."

"It actually makes people worry about it when they're away from the computer and drains attention from their everyday life and brings them back into the game ... it's about, 'How do we get players to exploit their friends in a mechanical way in order to progress?'"