A License to Play

Whether you know it or not, it is virtually impossible to play a modern video game without entering into a contract with the game’s producer. The contract, which is motivated in large part by copyright law, is referred to as an End User License Agreement or EULA. This week, I will explain what EULAs are, why they exist, and what you should look out for when reviewing these kinds of agreements.

EULAs are contracts that set out the terms and conditions surrounding software. Contrary to popular belief, when you buy a video game you are not buying the game itself but are instead buying a license to play the game. The EULA describes the license you purchased and outlines the limitations surrounding that license. When it comes to video games, most EULAs authorize individual, private use of the software and require consumers to use the game as intended. Many EULAs also prohibit consumers from reverse-engineering the game engine or modifying the game or its levels. Those anti-modification provisions are what publishers use to crack down on mods and hackers. EULAs also typically contain a series of provisions disclaiming (that is, denying) liability for software errors, setting out warranty guarantees, and describing how disputes will be resolved. The latter category includes choice-of-law provisions and often requires individuals to settle disputes through binding arbitration.

EULAs exist largely because of copyright law. As computer software, video games are entitled to copyright protection. The person who owns the copyright to a piece of software (i.e., the manufacturer of a video game) has the exclusive right to copy, distribute, or modify the code. That means there is no way to sell the game itself to a mass audience since it’s impossible for multiple people to simultaneously own an individual, exclusive right. That’s where license agreements come in. In addition to having a right to copy, distribute, or modify a copyrighted work, a copyright owner also has the exclusive right to license the work to others. In other words, the owner of a copyright can give others permission to exercise any of his exclusive copyright benefits, including those needed to install and play a video game. But it’s not all or nothing. The owner of a copyright can limit the scope or extent of the shared benefits. For example, video game demos come with a license agreement that only authorizes users to play the early levels of the game. Licenses can also be limited in duration — a license to World of Warcraft is limited by the duration of the monthly subscription. Finally, licenses can be used to set or enforce standards of conduct such as prohibiting a user from engaging in harassment.

The significance of license agreements to gaming has changed over the years. 15 to 20 years ago — before the rise of digital downloads — license agreements were almost entirely separate from their associated video games. Users had to agree to a license agreement before installing a game, but there was no easy enforcement mechanism since most games weren’t networked. If a user violated the agreement, the developer would not and could not enter the user’s home and remove the game from their computer. Most games today are tied to a specific user account, and developers use automated systems to identify individuals who violate the license agreement. They can have their license revoked and be banned from a game. Depending on the license, publishers can remove or uninstall content even if the user complied with all license requirements. This is true not only of games but of ebooks. This actually happened was when, in an act of true irony, Amazon removed copies of George Orwell’s 1984 from readers’ Kindles. This means it is more important than ever to be aware of your license terms and to be cognizant of a developer’s policies regarding license violations. At the extreme end of the spectrum, some developers have required users to accept the terms of an updated license agreement in order to continue using their software. The most notable example was when Nintendo required users to choose between “bricking” their console and accepting an updated license agreement.

It is worth noting that consoles and PCs use different types of agreements. PC game EULAs are written by manufacturers and typically differ from game to game. Console games are typically governed by an umbrella agreement from the console manufacturer that the consumer agrees to as part of the console setup process. Console manufacturers require video game producers to accept the standard EULA terms in order to publish their games on the console. The PlayStation 4 umbrella agreement is a good example as it clearly indicates that the agreement applies to any software you purchase, download, or use, and explicitly references the fact that the agreement is not limited to a specific game. A violation of the agreement can result in an entire console or Steam account being locked out of the gaming ecosystem, which could result in the loss of hundreds or thousands of dollars.

It’s reasonable to consider whether EULAs should be enforceable in the first place. Most people don’t even know EULAs exist, and those who do typically accept the terms without reading them. While the law on this issue is not completely settled, the courts that have weighed in generally concluded that the agreements are enforceable and that digital contracts should be evaluated using the same criteria as paper contracts. The essential question is whether there is a clear, objective indication that the person who accepted a contract was aware of its terms and accepted them voluntarily. Pretty much every EULA requires users to check a box or click a button that says “I agree to the terms” before actually using or installing the software. As far as the courts are concerned, that’s good enough.

A potential exception would be if the terms of the EULA were so oppressive as to be deemed “unconscionable.” That is a difficult standard to meet. While a video game EULA has been deemed unconscionable in the past, that ruling involved a “perfect storm” of circumstances and is not likely to repeat itself. The Court found that the mandatory arbitration provision in the EULA for the MMORPG Second Life was unenforceable for a variety of reasons, and there’s a strong argument to be made that the decision was incorrect. But even if it weren’t, the specific facts of that ruling are not likely to repeat themselves. An EULA would likely have to contain unusual terms in order for a court to even consider deeming it unconscionable.

EULAs are long and, to most people, boring. But whether we like it or not, they’re not going anywhere. Because the agreements could impact how you can use a game, and could even impact your ability to play the game, it is important to familiarize yourself with their basic terms and language so that you can identify if they are unusual or unreasonable. And if that’s too much to ask, you could always commission someone to make the terms more interesting.