E-Alert Case Updates

Plaintiff Who Lost Virtual Money in Video Game Cannot Recover from Video Game’s Maker

Mia Mason v. Machine Zone, Inc.
(October 21, 2015) United States District Court for the District of Maryland
by Matthew J. McCloskey, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.mdd.uscourts.gov/Opinions/Opinions/15-1107%20Memo%20and%20Order%20for%20WEBSITE.pdf

In a recent opinion, the United States District Court for the District of Maryland concluded that a player of an online video game could not recover from the game maker for her loss of virtual currency, which was not exchangeable into “real world” currency, at the game’s virtual casino.

Machine Zone, Inc., a corporation headquartered in California, is the maker of the popular smartphone and tablet application Game of War: Fire Age (“GoW”), a game in which players attempt to conquer a virtual world through building structures, forging alliances, and advancing their character. The app is free to obtain, but Machine Zone maintains an online store in which players can purchase virtual currency for real world currency. The app also contains a virtual casino in which players may gamble their virtual currency in an attempt to gain more virtual currency or other helpful virtual items. The Terms of Service governing use of the game expressly provide: “Virtual Currency and Virtual Goods may never be redeemed for ‘real world’ money, goods or other items of monetary value from [Machine Zone] or any other person”; that players receive a nontransferable “revocable license to use the Virtual Goods and Virtual Currency” solely for personal entertainment purposes; and that, aside from the foregoing license, players have “no right, title, or interest in or to any such Virtual Goods or Virtual Currency.”

Plaintiff began playing GoW in 2014, and eventually lost $100 in virtual currency at the virtual casino. Consequently, she brought this quasi general public action purporting to represent a nationwide class of players and a subclass of Maryland players who had suffered similar losses. Plaintiff alleged that GoW amounted to an unlawful slot machine under California law, and that Machine Zone engaged in unfair business practices in operating it. She asserted four (4) causes of action: (1) violation of California’ Unfair Competition Law (“UCL”) related to Machine Zone’s operation of an unlawful slot machine; (2) violation of the UCL related to Machine Zone’s purportedly unfair business practices; (3) unjust enrichment; and (4) loss recovery under MD. CODE ANN., CRIM. LAW § 12-110. Machine Zone moved to dismiss the complaint in its entirety, arguing that Plaintiff had failed to state a claim as to any of her causes of action.

The Court began by noting that California law defined “slot machine,” in part, as a “machine, apparatus, or device.” Because GoW was not a physical object with moving parts, but rather was merely software, it did not fall within this definition. Moreover, even if GoW was a “machine, apparatus, or device,” the Court held that it was predominantly a game of skill, not chance, and thus was covered by a statutory exception to California’s unlawful slot machine statute. The Court therefore concluded that Plaintiff had failed to state a UCL claim with respect to Machine Zone’s operation of an unlawful slot machine.

The Court then addressed whether Plaintiff could establish that Machine Zone had engaged in an unfair business practice within the meaning of the UCL, which required Plaintiff to show that she had suffered an economic loss attributable to Machine Zone’s conduct. Initially, the Court found that Plaintiff did not have standing under the UCL to bring this claim, as she was not a California resident, she did not download GoW in California, and merely accessing a product created by a California company was insufficient to establish that the alleged misconduct emanated from California. Even if she had standing, however, the Court concluded that she had not sustained an economic injury. At base, Plaintiff wagered only virtual currency in a virtual casino. Because that currency could not be validly exchanged for real world currency, the Court was persuaded that buying the virtual currency was akin to buying an amusement ride ticket inasmuch as the buyer pays for the value of the entertainment itself, not the potential to gain money. Plaintiff had thus not suffered an economic loss attributable to Machine Zone, but rather made the voluntary decision to pay for entertainment. The Court therefore dismissed Plaintiff’s second UCL claim.

The Court applied similar logic in addressing Plaintiff’s unjust enrichment claim. Reiterating that Plaintiff paid for the entertainment value of the game itself, the Court held that Plaintiff had failed to establish that Machine Zone had been unjustly enriched, as it had simply rendered Plaintiff the entertainment service she paid for. As a result, the Court dismissed this claim.

Finally, the Court considered whether Plaintiff had stated a claim for loss recovery under Maryland law. Noting again that Plaintiff had not suffered a loss as a result of Machine Zone’s conduct, the Court determined that Plaintiff could not establish this cause of action. Furthermore, the Court noted that the fact that Plaintiff had wagered virtual currency with the potential of losing that currency was irrelevant, as none of the virtual items could be exchanged back into real world money. The Court concluded: “The laws of California and Maryland do not trifle with play money, and so Plaintiff’s Complaint must be dismissed,” and it granted Machine Zone’s motion.