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  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Union Facebook Page Not Picket Line Extension: NLRB Judge
A National Labor Relations Board judge ruled Wednesday that federal labor law did not require a union to disavow statements posted on its Facebook page by its members that threatened workers who chose to continue to work during a strike.

Parody New York Times Twitter Account Restored
You can’t keep a good Twitter account down, it seems. According to Politico, the micro-blogging site has restored a New York Times parody account one day after it was pulled amidst complaints from the paper.

How to Account for a Virtual Good
U.S. market regulators are demanding more details about how companies account for virtual goods — the virtual clothing, food, tools or powers sold in online or in social media networks and games.

Zynga Takes Gambling Step in Nevada
Zynga Inc. has taken its first official step toward offering real-money gambling games in the U.S. by filing preparatory paperwork in Nevada, as the embattled firm maneuvers to take advantage of a shifting legal landscape.

In D.C., Social-Media Surveillance Pays Off
The local government in the nation’s capital is paying hundreds of thousands of dollars to a startup to gather comments on Twitter, Facebook and other online message boards as well as the government’s own website. The data help form a letter grade for the bureaucracies that handle drivers licenses, building permits and the like.

Zynga to Bundle Games with Cable TV
Social-games provider Zynga Inc. and Synacor Inc. reached an agreement to make Zynga game currency available to pay-TV and high-speed internet providers as part of their consumer bundles, a move that could reduce Zynga’s heavy dependence on Facebook Inc.

Study Points to Videogame Popularity Among Boomer Women
A new study of more than 32,000 videogame players has found that women make up a solid majority of “baby-boom” gamers, aged 50 or more, and they spend far more time playing than their younger counterparts.

Netflix CEO Hastings Faces SEC Action Over Facebook Post
Netflix Inc. (NFLX) and Chief Executive Officer Reed Hastings said they may face a U.S. Securities and Exchange Commission civil claim over a July Facebook post that coincided with the stock’s biggest gain in almost six weeks.

PokerStars In Talks to Buy Atlantic City Casino
Online poker company PokerStars is in talks to buy the troubled Atlantic Club Casino Hotel in Atlantic City, N.J., just four months after forking over $731 million to the government in order to settle fraud allegations, according to Friday news reports.

Facebook Says Teens Have No Personal Claims In Game Suit
Facebook Inc. on Thursday said a proposed class action alleging the company improperly profited from game credits unknowingly purchased by minors with their parents’ credit cards should be tossed because the minors want to recover money paid from their parents’ accounts but aren’t seeking a remedy of their own.

FTC looks at mobile apps firms over child privacy concerns
An agency report shows that a majority of app developers may have violated laws aimed at kids’ apps.

Opponents say ITU treaty threatens Internet freedom
The United States joined 20 other countries in refusing to sign a treaty that the objectors say will harm Internet freedom. The proposal was hammered out at an international communications conference that ended Friday in Dubai.

Guardian nixes its Facebook social reader, regains control over its content
After a year-long experiment that saw its Facebook “social reading” app gain more than six million monthly users – and then lose more than half of those after the network changed the ways those apps work – the Guardian has decided to take back control of its content.

Senator Richard Blumenthal (D-CT) recently introduced S. 3636, the Gift Card Consumer Protection Act of 2012, which would ban expiration dates and specified fees for inactivity or services on gift certificates, store gift cards, or general-use-prepaid cards (“Cards”), including those issued in connection with loyalty, award and promotional programs (“Loyalty Products”). The legislation would change current federal gift card law, which permits issuers to charge certain fees after 12 consecutive months of inactivity, permits expiration after 5 years, and excludes Loyalty Products from these restrictions if certain disclosures are made. Senator Blumenthal commented: “Today I am introducing legislation to help substantially remedy that problem and to ensure that consumers receive the full value that is stored on their gift cards.

Whether it is a bankrupt company that refuses to honor a gift certificate, a gift card with hidden fees that slowly withers down to nothing, or a ‘promotional’ gift card that expires in the virtual blink of an eye, consumers in Connecticut and across the nation are in danger of seeing the value of their gift cards disappear.”

In summary, the bill proposes to:
·         Ban inactivity fees on Cards
·         Ban expiration dates on Cards
·         Eliminate the exclusion for Loyalty Products
·         Provide stronger consumer protections for cardholders when a company that issues or sells gift cards files for bankruptcy protection

Click here to read the complete bill.

Many issuers of Cards will be surprised to learn that the bill would prohibit expiration dates on Loyalty Products. Loyalty Products typically include strategically developed expiration dates designed to incentivize patronage during periods of time when sales are generally slower or when competition is fierce. If expiration dates on these products are prohibited, Loyalty Products may be far less effective for these and other purposes.

The U.S. DOJ’s announcement last December –that it was now interpreting the 1961 Wire Act as primarily prohibiting only online sports betting– generated a lot of excitement and speculation that many states would move to legalize online gaming.

Today, almost one year later, the excitement remains although little actual activity has occurred. So far, only Nevada and Delaware have enacted legislation permitting online gaming. DC enacted legislation, but it was repealed before it was implemented.

As this article makes clear, however, social gaming continues to provide a viable and profitable online gaming alternative, while states craft legislation to address online gambling.

Meanwhile, a number of companies are jockeying for position in anticipation of more online gaming legislation. Numerous acquisitions have occurred in this space. For example, International Game Technology acquired Facebook casino games developer DoubleDown in January, 2012 for $500 million.  DoubleDown does not permit betting with real money, but rather generates revenue by selling virtual gaming chips.

Social entertainment company RockYou acquired Facebook casino developer Ryzing, creators of Bingo by Ryzing.

Social game developer Zynga is doubling down on its gambling-based business strategy. Zynga rakes in some serious profits from Zynga poker (selling virtual poker chips that cannot be redeemed for cash). Reportedly, Zynga is expanding its focus in this area to include online gambling.

Social game developer Big Fish launched a new iPhone app called Big Fish Casino, which includes real-money gambling (in the UK) in conjunction with the Betable gambling platform. This is the first time that a real-money gambling game will be available in the App Store.

Facebook, too, has started hosting real-money gambling games, by offering Bingo Friendzy by Gamesys on its platform.

Casino operators are also jumping on the band-wagon.  Las Vegas Casino operator Station Casinos announced it is acquiring a stake in Fertitta Interactive, which offers online games, social gaming, and entertainment services, including an online poker game.

And the list continues.

As this sampling shows, many companies are diving into online gambling, where it is legal. Others are leveraging social gaming and other models that (ideally) do not involve real money gambling. Others are employing creative business models and strategies involving contests, sweepstakes and gambling-like activities in social games or what we refer to as gamblification!

Pillsbury’s Social Media, Entertainment & Technology Team has prepared a white paper on legal issues associated with these “gamblification” strategies.

  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Cypress Hill Singer’s Grand Theft Likeness Suit Put To Rest
A California appeals court refused Wednesday to revive a former Cypress Hill backup singer’s suit claiming that his likeness was misappropriated in a Grand Theft Auto video game, ruling the game’s creative elements transformed it into more than a mere imitation of the plaintiff.

VCs invest $150m in mHealth during Q3: YTD total hits $616m
In the third quarter of 2012, mhealth companies received $150.1 million in venture capital bringing the year to date total investment in the sector to $616 million according to data collected by Mobile Health Market News.

Feel The Force: Angry Birds Star Wars Tops U.S. App Store In Record 2.5 Hours, Says Rovio
Rovio’s Angry Birds Star Wars mash-up launched yesterday — and took just 2.5 hours to reach the number one spot in the U.S. App Store. In a blog announcing the figure, the games maker noted that the speed with which its latest Angry Birds incarnation rocketed to the top of the chart beat all its previous records.

Twitter unintentionally resets some passwords trying to plug breach
Twitter reset some passwords in an attempt to protect members whose accounts may have been compromised by a hacker, but inadvertently reset a larger number of accounts than needed, the micro-blogging service said Thursday.

The App Conference and Global Mobile Internet Conference (GMIC) took place October 18-19-20 at the San Jose Hilton and San Jose Convention Center. This event brought together more than 100 speakers that addressed key components of app development, marketing and revenue in 6 conference tracks over 3 days. With an emphasis on cross platform development, revenue strategies, and global growth, the shows provided key insight and networking for both developers and business professionals. Pillsbury team members Jim Gatto, Ian Schick and Jessica Slater (pictured) attended the conference.

Jim Gatto participated on the “Going Global” panel. The panel discussed a broad range of international issues and answered a number of questions including: How should developers think about going global and implementing an international strategy? Is there a difference in the way apps are conceived, developed and marketed in each type of market that each can learn from? When is the right time to localize a successful domestic app for international audiences? What are some of the pitfalls to avoid when trying to market an app internationally, and who should you be partnering with for distribution? What cultural, educational and financial differences affect the way in which apps are adopted? How do you successfully launch an app for worldwide audiences?

Fellow panelists included executives from GAMEVIL, BlueRun Ventures and Tapjoy, Inc.

For more information, feel free to contact any member of the Pillsbury team.

October 9-11, Pillsbury team members attended the GDC Online Conference in Austin. Pillsbury has been participating (attending, speaking, sponsoring) GDC Online for over four years and we wouldn’t miss the final year the show will take place in Austin, Texas.

The conference brings together industry professionals and game developers for three days of sessions, discussions and networking opportunities. This year the conference boasted over 120 lectures, keynotes, panels, roundtables and tutorials. Topics focused on the development of connected and cloud gaming including social network titles, free-to-play web games, kid-friendly online titles, large-scale MMOs, and much more. This year’s conference attracted over 3300 attendees.

Pillsbury team members Ben Esplin (pictured) and Brad Blaise met with dozens of professionals and game developers. The most common topic of conversation was intellectual property (IP) protection for games. Many misperceptions cause developers to miss great opportunities to secure IP protection for their ideas. In part, this is due to a lack of a true understanding of what is protectable and/or not working with an attorney with the relevant expertise. Games are all about IP. Why make it unnecessarily easy for others to free ride on your hard work and creative genius. Check out our IP Protection for Games piece to learn more. Contact Ben, Brad or anyone of our team members should you have any additional questions.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Child’s Play: Food Makers Hook Kids on Mobile Games
U.S. food companies are reaching children by embedding their products in simple and enticing games for touch-screen phones and tablets. The new medium is far cheaper than Saturday morning TV commercials and could prove as effective.

Facebook updating its mobile apps every 1-2 months from now on
In an engineering blog post, Facebooker Christian Legnitto, who’s responsible for pushing out mobile code for the company, says that Facebookers working on mobile have been taking the same doubled-down approach to release cycles that the rest of Facebook’s engineers use for the website code pushes.

NASA, Angry Birds and the Question of Gamification
The addicting power of games, and their proliferation into each of our pockets, has created a new opportunity for organizations with a message. Each year, companies pay millions for product placements in videogames. Now, the public sector is finding creative ways to get in on the act too. 

Online push transforms Japan gaming
This year Gree, which was founded by Asia’s youngest self-made billionaire, Yoshikazu Tanaka, 35, is continuing its march on video games veterans such as Sony and Sega. But now its target is not their floor space but their core demographic of hardcore game players.

Social Media Week Chicago to Present 90 Free Events
Social Media Week Chicago 2012 will host a lineup of 90 free events across 40 venues throughout the city that explore the social, cultural and economic impact of social media from Sept. 24 — 28. The event is organized by Zocalo Group and the Chicago Tribune.

3 more companies approved for online poker
Nevada gambling regulators have approved licenses for three companies to run Internet poker sites in the state.

  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Police Embrace Social Media as Crime-Fighting Tool
We leave small clues about our lives all over the internet like fingerprints.

LinkedIn’s Profit Growth Leaves Social Media Peers Trailing Behind
The past two days have been exciting for social media investors. On Wednesday, Yelp roared 22% higher, befuddling shorts expecting the expiration of its lock up would send shares lower. And, on Thursday, music purveyor Pandora jumped 14% following its earnings release.

Party conventions get social, with major social media ramp-up
Democrats and Republicans, for all their differences, are joining in the same revolution this political season.

Badgeville and Acquia Partner to Deliver First Gamification Platform Capability for Thousands of Drupal Communities
Badgeville provides first gamification platform solution to be layered on top of Drupal, driving better user engagement and a stronger community.

Internet Poker: Federal standards would benefit Nevada
Michael Gaughan’s South Point Poker made history last week, becoming the first U.S. casino to be licensed to operate in an in-state, real-money poker website.

Wolfram Alpha Launches Personal Analytics Reports For Facebook
Wolfram Alpha, the “computational knowledge engine” that quietly handles a large number of queries from Apple’s Siri, launched a new feature today that allows you to quickly get an overview of all your data on Facebook. The new report, says Wolfram CEO Stephen Wolfram, expands Wolfram Alpha’s “powers of analysis to give you all sorts of personal analytics.” The company plans to expand these reports with new features over time, but they already give you a pretty deep look at your Facebook habits.

Plank in GOP platform urges ‘prohibition’ of Web gaming
A plank in the Republican platform, approved earlier this week at the party’s national convention in Tampa, Fla., calls for a “prohibition” on Internet gaming and reversing December’s re-evaluation of the Federal Wire Act.

Date: March 7, 2012
Time: 5:00 – 8:00pm PT
Place: Pillsbury’s San Francisco Office

How do you navigate the sale of your video game company? Join us and find out.

Join Pillsbury as we host a discussion with prominent industry players from Electronic Arts, Zynga, Lightspeed Venture Partners and KlickNation (acquired by EA in 2011) to discuss all aspects of the process surrounding video game company acquisitions. Topics will include how deals are sourced in the video game space, how to decide whether or not to sell, how to shop your company and how to negotiate deal value and other key terms. Panelists come from both sides of the table to provide insights as to how deals work from the perspective of the strategic buyer and the founder/VC investor.

Following the panel discussion, we will take questions from the audience. Questions should be emailed to GDC2012@pillsburylaw.com and will be read to the panel by the moderator.

Agenda
Networking 5:00 – 6:00pm
Panel Discussion 6:00 – 7:00pm
Additional networking 7:00pm – ?
(We promise you’ll be done in time to party! But if you want to stay, feel free! We’ll be there!)

Speakers
Michael Chang
Director, Corporate Development, Electronic Arts

Grant Olsen
Corporate Development, Zynga

Jeremy Liew
Managing Director, Lightspeed Venture Partners

Mark Otero
General Manager of Bioware Social and former CEO of KlickNation (acquired by EA)

For more information, please contact meggan.maromonte@pillsburylaw.com

A new survey by Interactive Age about the best law firms advising on video games and other interactive entertainment named Pillsbury one of the Top 3 firms in the nation.

According to the survey, more than 530 attorneys at 30 major law firms now practice in the area of video games, new media and interactive entertainment, so it is increasingly important to know which firms have the most experience and widest range of offerings. With over 30 attorneys on Pillsbury’s multidisciplinary team, it is also one of the largest and most diverse in the nation.

“The numbers indicate that big firms are staking a claim and operating significant video game practices. The appeal for these big firms is that this sector lets them leverage all of their expertise across the board for a single client,” said Interactive Age’s Evan Van Zelfden in the press release announcing the survey results.

“We are delighted that Pillsbury ranked among the foremost video game and interactive entertainment law firms in the United States, said Pillsbury partner Jim Gatto. “We have been involved in this space for a long time, but this recognition validates our firm’s decision to formally create and invest in the nation’s first multidisciplinary team focused on Virtual Worlds & Video Games more than three years ago, and our recent decision to expand the team to cover other aspects of Social Media, Entertainment and Technology.”

Pillsbury’s Social Media, Entertainment and Technology team includes the Virtual Worlds & Video Games team and also covers other emerging areas such as: Virtual Goods and Virtual Currency; Location-Based Services and Mobile Applications; Augmented Reality and Mirror Worlds and other aspects of social media and interactive technology.