http://www.zam.com/story.html?story=23033

Blizzard was awarded $88 million in damages last
week from its lawsuit against Scapegaming, a large private WoW server;
meanwhile, the rest of the gaming industry is taking new copy protection
cues from MMOs

While piracy in MMO gaming isn't as prevalent as
in other video game markets, Activision-Blizzard and other publishers
remain aggressive in their hunt for operators of rogue, "private
servers." Last week World of Warcraft publisher Blizzard made headlines across the blogosphere after the company was awarded more than $88 million in damages in federal court; the complaint was originally filed in October 2009,
alleging Alyson Reeves—the defendant and operator of a popular
"Scapegaming" private server—broke the company's EULA by hosting the
illegal server and selling in-game items for real money via PayPal.
The recent lawsuit is one of the most extreme cases of piracy in the
MMO industry; Scapegaming hosted 427,393 total users, with 32,000 to
40,000 players online each day, according to the court order [via THR, Esq.].
But is piracy in MMOs a widespread problem for most of today's
publishers? Or is online gaming, by nature, more prohibitive to "digital
theft" than traditional video games? Some publishers are taking cues
from the cloud-based nature of online gaming, adopting new forms of digital rights management (DRM) for single-player or "offline" games that rely on users' Internet connections to constantly validate their usage rights.

From the perspective of non-gamers and MMO rookies, the recent news
fiasco might lead some readers to believe that piracy in the MMO market
is running rampant, or that private servers like Scapegaming are
robbing game publishers blind. While it's true that private MMO servers
almost always have a negative impact on the industry (and we at ZAM
would urge players to stay away from them for a variety of other
reasons, as mentioned below), it's important to recognize the relative significance of this case, as opposed to the rest.
This is one of the largest of such private servers to be pursued in
court by Blizzard; the defendant earned more than $3 million by
collecting PayPal "donations" from users in exchange for leveling boosts
and epic gear, according to Gamasutra.
Reeves failed to show up in court to defend herself last week and
Blizzard was awarded a default judgment of $88 million. That total
equals "$3,053,339 in profits from the improper private server, $63,600
in attorneys' fees and a whopping $85,478,600 in statutory damages for
willful infringement," according to Eriq Gardner of the THR, Esq. column. Blizzard later issued the following statement in response to the ruling:

"Our ultimate goal is to create the best games in the world, and
that means we need to protect our games and safeguard our players’
experiences with them. Server emulators that use Blizzard’s IP
facilitate piracy and offer unauthorized, inconsistent gaming
experiences that can damage Blizzard’s reputation and goodwill with
players. We take these types of threats very seriously and will continue
to take every available measure to protect our rights globally."

Scapegaming was one of the largest and most popular private WoW
servers in 2009 and Reeves was essentially selling in-game content in micro-transaction format, so it's no surprise that her server was at the top of Blizzard's hit list. As Scott Jennings notes in his BrokenToys blog,
420,000 users is huge; the size of most legitimate, "second-tier"
MMOs, let alone the player base of a private server. This case is
clearly an example of Blizzard setting a legal precedent, similar to
its 2008 lawsuit against MDY Industries, retailer of WoWGlider (a utility that allowed players to "bot" and take advantage of other game client mechanics).


Legal actions like these aren't just about preserving a publisher's
EULA and proprietary server technology, however; it's also about
combating piracy under the broad wings of the Digital Millennium Copyright Act
(DMCA), which video game developers and publishers have been doing for
years. Historically though, online gaming and MMOs were targeted much
less than traditional PC and console games because of their intrinsic
nature; the client requires a constant connection to the server, which
also validates a user's game license.
But the advent of server emulation, free virtual private networks
(VPNs), network tunneling and other technology has increased the
accessibility of private servers in recent years, allowing users
unlicensed access to MMOs and other online gaming. It's usually a game
of cat-and-mouse with the smaller private servers; DMCA takedown notices
are sent to the service provider, the server goes down and another one
pops up to take its place. Sometimes private servers grow so big and
popular that publishers get the FBI involved, as was the case in
NCsoft's 2006 Lineage II private server takedown.
In the MMO realm, most community members regard private servers as
shady and often dangerous; a back-alley endeavor that isn't worth the
risk of getting caught and banned by the game's publisher, or having
one's machine infected with malware and other unscrupulous logging
software. Many private server invitations and registrations are a ruse
in themselves, designed to trick users into providing login credentials
and other personal information.


If you're not familiar with the term "private server,"
it's used—in the context of MMOs, at least—to describe a non-sanctioned
server environment that allows users to play online, without accessing
the publisher's official servers. Players use them for avoiding
monthly subscription fees, gaining access to restricted content,
testing purposes and more. Private and emulated servers are also used
for other types of games, like first-person shooters and real-time
strategy titles (usually for the same reason—to play online for free,
using pirated copies of the game).
However, the use of private servers and VPNs to play online games for
free isn't as easily-accessible as downloading a BitTorrent file, for
example. The technology is becoming a bit more user-friendly
for traditional PC games, though. Up until the past few years, those who
downloaded pirated copies of games like Left 4 Dead and Mass Effect
could only play the single-player campaigns; they weren't able to
access the official servers to play online with other people, because
the server checks to make sure each player is using a valid license. The
emergence of easy-to-use VPN services like Hamachi, Wippien and Tunngle has changed the norm, allowing easier access to third-party servers with pirated video games.Although the MMO industry might not be losing that much business from
private servers (with the exception of some markets, according to MMO anti-piracy groups like China's OGAAP), the rest of the gaming industry is scurrying to find new anti-piracy solutions. Last year Ubisoft announced it was working on new anti-piracy techniques, which were later unveiled in Assassin's Creed 2 as the infamous connection-required DRM.
Similar to MMO games, Ubisoft's new DRM protection requires a constant
Internet connection to access the game, even in single-player mode.
The new DRM technology in Assassin's Creed 2 and Silent Hunter 5 outraged thousands of gamers
and sparked a PR nightmare for Ubisoft; players couldn't access the
game if their Internet connection was down and game saves were lost if
their router malfunctioned. Ubisoft's servers even went down at one
point, denying game access to customers. Worse still, the pirate "scene"
cracked Ubisoft's DRM within 24 hours,
effectively making pirated copies more desirable than legitimate
versions. Ubisoft eventually deployed a patch that helped users retain
game saves when kicked offline, and it appears that future games will use Valve’s Steamworks API instead of the "always online" solution.


Blizzard's new Battle.net system also sparked debate last year when it was announced that StarCraft 2 wouldn't support LAN play, a defining feature of the original game. Although Blizzard's new DRM used in StarCraft 2 isn't as restrictive as Ubisoft's, the server-side authentication required to play the offline, single-player campaign is frustrating to some.
"While single-player will be available offline, installation must have an internet connection in order to proceed," Incgamers.com
explains in a Q&A with the SC2 development team. "You are also
required to have or signup for a Battle.net account in order to install
the game. All achievements and friends lists etc will be available as
soon as you logon, but the actual single player game is available
anyway. 'You can [play single player offline], but we don't encourage
it.' [lead designer Dustin] Browder said. 'We totally allow it if you
want to do it,' but the point is 'you don't get access a lot of the
stuff.'"
Online gaming piracy is forcing desperate companies to think outside
the box; Codemasters CEO Rod Cousens suggests the solution might be in
selling "unfinished games," according to an interview with CVG.
Admitting that traditional DRM isn't doing the trick, Cousens wants
publishers to "sell unfinished games" and "to offer the consumer
multiple micro-payments to buy elements of the full experience." He
explains that even if such games are pirated, the "complete" experience
won't be available unless players buy additional elements.
Cousens is essentially suggesting the equivalent of distribution and revenue models used in MMOs like Dungeons & Dragons Online, Warhammer Online, Lord of the Rings Online
and many other free-to-play titles. As digital distribution continues
to grow in popularity, we've already seen the precursor of this idea in
the form of downloadable content (which is commonly pirated in addition
to the "core" game).


So the issue comes full-circle, back to server-side authentication
and some form of "always connected" DRM, which most gamers loathe. It
works for MMOs because the whole point is online gameplay, and the same
is usually true of multiplayer-heavy games like StarCraft 2, Left 4 Dead and Modern Warfare 2. But even then—and especially with solo-oriented games, like we've seen in Assassin's Creed 2—players are having a tough time accepting the "always connected" solution that publishers are shoving down our throats.
Until the gaming industry can find some kind of compromise—which
should become easier as the older generation of "Doom LANers"
retires—the best way to vote is with your wallet. Support developers who
have enough faith in their products to release a game without any copy
protection at all, like the uber-successful World of Goo.
Snub publishers who incorporate ridiculous protections that require
"always connected" restrictions if you don't agree with them. Let the
industry know that the best way to curb piracy is to make legitimate
game copies more desirable than pirated ones, as obvious as that concept
should already be.