The videogame industry's a big business -- and sometimes, companies don't see eye-to-eye. And what happens when a dispute goes to court, and gamers get their grubby hands on fancy-sounding legal documents? Why, wild, inane, forum-fueled speculation, of course. That's where California-based corporate attorney and GameSpy freelancer Eric Neigher comes in. Objection! is your one-stop destination to learn what all that legalese means in plain English, straight from someone who knows the twisty-turny language of the law.
Intro
A lot of consumers hate GameStop; it's just a fact. But is that hatred justified, or is it just because gamers are a fickle and unruly lot who have turned many a molehill into a mountain, and many a perceived slight into an unfair reputation? Whatever the case, GameStop ruffled a lot of feathers with its recent removal of OnLive coupons from Deus Ex: Human Revolution game boxes. If you're pissed about it, or feel like it's a violation of your rights as a customer and/or gamer, you're not alone -- but, as always with Objection!, we need to look at things from a little bit more of an objective perspective.
Facts
OK, so what exactly happened? Square Enix, publisher of DXHR, entered into a deal with OnLive (a service that allows you to remotely play games using its own servers) to include discount coupons in the PC boxes of DXHR. GameStop, having long ago realized that brick-and-mortar stores are no way to make any real revenue in the games business, is launching its own competitor to OnLive, and so didn't take kindly to being forced to point gamers toward putative competition through its own game sales mechanism. This is what happens when you have no clear business model, GameStop!
The GameStop employee memo, calling for the OnLive codes' removal.
In order to avoid pitching the competition, GameStop ordered employees (via an official company memo) to open DXHR boxes and remove the OnLive coupons, then reseal the boxes and sell the games as new copies. Naturally, when we broke this story, OnLive wasn't too happy about it, and neither were various GameStop customers, for a variety of reasons. Square Enix quickly issued a statement; GameStop, only a day or so after having sold the titles, pulled them all from the shelves and promised to honor any returns -- a rarity for PC games.
The issues that arose here are many, but they can be broken down into two major categories: actual, legal issues and butthurt. Butthurt, unfortunately for our country's political establishment, is not a prosecutable offense, but it does lead to a lot of thoughtful comments on our forums and elsewhere on the Internet. That said, I'm going to leave aside butthurt for the purposes of this article and focus instead on potential legal violations. I know, I know... butthurt is more fun to say. Don't worry, I'll probably put it in this article a few more times, just to be safe.
Analysis
Butthurt. Surprised ya, didn't I!? OK, everybody focus now. GameStop has got a few potential issues here, although most of them are really going to be between itself and Square Enix and OnLive. It's hard to say without having seen the supplier contracts myself, but GameStop has quite likely exposed itself to a breach of contract here -- or, more likely, to a breach of the warranty of merchantability and perhaps a breach of fiduciary duty with regard to its obligations to Square Enix. Square Enix entered into an agreement, presumably, with OnLive wherein OnLive paid some amount of money or compensation of another sort to put marketing materials in the DXHR boxes. Square Enix thus has a duty to ensure those coupons are in its boxes, but the question is, does that duty also extend to GameStop? The answer to that is, like so many answers to legal queries, is "it depends." What does the contract between them say? And if the contract doesn't specify, does an implied duty exist on GameStop's behalf to supply the games Square Enix provides it in their original state?
According to Article 2 of the Uniform Commercial Code, an influential (but not binding) set of prospective rules for how courts should handle contract law in the United States, buyers have a right to expect that goods purchased contain what they expected them to contain, and that they can "repudiate the sale" in the event that they don't. Of course, the UCC is talking not so much about retail transactions here as about formalized contracts between two individuals or businesses, so how much this would be on-point is unclear. It's also unclear how much customers would have "expected" the game boxes to contain these OnLive coupons and to what degree they'd even care. Some people have reacted with a sense of violation -- that someone went in and changed what they were buying without their knowledge or consent -- and that's fair. But it doesn't necessarily mean that what GameStop did was a litigable offense.
Man, remember this "warranty?"
Of course, implied quality "warranties" (that is, assurances) are in place whenever someone sells you something. Among these, the "warranty of merchantability" exists to ensure that crafty sellers can't just sell you an empty box and claim that's all you paid for. If they say it's a game, it's gotta perform like a game. But that warranty almost certainly would not cover something like the OnLive coupon, at least not in terms of GameStop's duties to its individual end-user customers (it might have some different liabilities to Square Enix and OnLive, though). The reason: The coupon itself doesn't have any direct effect on anyone's ability or willingness to use the product as it was designed to be used. Whether that coupon is in the box or not, you can still install the game, run it, and shoot people in the neck with tranq darts. So my guess is that any claims based on this kind of implied warranty regime, whether it be a warranty of merchantability or a statute of frauds or anything like that, is pretty much bound to fail. GameStop has no duty to the customer to not remove stuff like this.
Another big issue, beyond simply what customers could sue for (and it doesn't look like a whole lot), is why they would sue. Now, we all know the real reason why is that they wanna get paid, or maybe just wanna stick it to GameStop. Fine... but those aren't reasons, as far as the law is concerned, to sue someone. You sue somebody, traditionally, to "be made whole" again after suffering some damages (and that's the operative word here). It's hard to see how the removal of an OnLive coupon or the simple opening of the seal on a video game box amounts to any real damages to DXHR's potential players. And therefore, it's hard to see how courts would entertain any sort of lawsuit, especially a class action, in this case. It would just seem like unnecessary harassment via the court system. It's also worth noting that GameStop's already proactively trying to make good with a bunch of free $50 gift cards for affected parties.
Conclusion
So, as much as it probably pains most of you to read it, I don't see a whole lot of legal liability for GameStop here. Yes, it is certainly going to lose a lot of corporate goodwill and a lot of customer trust in the marketplace -- as it should. Actions have consequences, and in a market economy, those consequences redound to real dollar losses in the medium term. But, and this may sound very un-American of me, not every wrongdoer deserves to be sued or otherwise punished in the legal system. I don't dismiss what GameStop did, but I don't think it's gonna get hauled into court anytime soon, either. Let the butthurt continue.
Years ago, Eric Neigher went into law school, and started writing about games on the side. These days, he splits his time between pwning noobs on the Internet and pwning noobs in the justice system. His column, Objection!, was the 2010 recipient of the Neigher award for his own works.