Hector Postigo on the Economics of Modding

Postigo is wrapping up his PhD at RPI's Science and Technology Studies program and has written on the contribution of modding communities to a company's bottom line. Here are some thoughts on the GTA sex Easter Egg, mentioned in comments to Richard's censorship post. It also got attention in the halls of power, such as they are. Postigo ponders what it means for the video game business. Hook line: On the Chill Effect of Hot Coffee.

Hector Postigo: "On June 9 the economies of modding took an interesting turn. Patrick Wildenborg released a mod called “Hot Coffee” on his Grand Theft Auto modding site. Now a player can have digital sex. As many of you know, a mod is fan-designed addition to a video game that modifies game play in some form or another. Some mods can be “total conversions” which change the game significantly while others can simply change the face or clothes on a character. “Hot Coffee” is technically not a mod because it does not code for any new game elements but rather unlocks game elements already in the game. “Hot Coffee,” makes available game play designed by the original programmers of the game; specifically it makes available a sexually explicit mini-game (essential an Easter-Egg) in Grand Theft Auto San Andreas. As it is, the code in GTA San Andreas will show characters fully clothed having sex but subsequent iterations of “Hot Coffee” included nude models (these are fan-made), and removed some limitation on how many times a character could go on a “date.” The “mod” is available for all platforms that can play GTA San Andreas, X-Box, PS2 and the PC.

 

So what does this all have to do with the economy of modding? In the past I’ve written about the value (in terms of labor value and shelf-life) that mods add to video games. It is no secret that video game companies recognize this and in fact encourage it. The relationship between modders and video game companies can be symbiotic. Modders benefit from recognition that may lead to a job in the industry; they feel satisfaction at having created a novel artistic contribution to their favorite games; and it’s fun to do. Game companies benefit from the added shelf-life a good mod may add to a game by providing expanded game play, from the low cost in having large mods developed and tested for free which can then be turned into stand alone games (think Counter Strike), and from the “buzz” a good mod creates around the commercial title.

 

“Hot Coffee’s” effects on GTA San Andreas and on Take Two Interactive, owners of Rockstar Games, the developers of San Andreas, have not been so well received. When news broke out about the mod the Entertainment Software Rating Board (ESRB), for the first time in its history, changed the rating on an already released game. San Andreas is no longer rated “Mature” but rather “Adults Only” and as a consequence major retailers like Wal-Mart and Best-Buy pulled San Andreas from their shelves and said they may not put it back even if Take Two cleans up the code and the “Mature” rating is re-instated.  Further, Take Two Interacting lowered its expected earnings for the year and is thinking of taking legal action against the modders that developed “Hot Coffee.”

 

And so, we enter the murky world of the informal relationship between video game fans and software companies. Because the troublesome sex scenes were designed by Take-Two and not by modders it’s unlikely that they could be found in violation of the game’s EULA as “Hot Coffee’s” early iterations amount to a game patch. But then again nothing this economically quantifiable has happened in the history of games and modders. Take Two lowered expected earnings by 40 million dollars. This is important because up until now the contribution of modders were almost always seen as positive. In the cases where a company has had to put a stop to a mod it was because the mod was infringing on other companies’ intellectual property like, for example, the G.I Mod for Battlefield 1942 or the Duke-It-Out-In-Quake Mod for Quake. This time around Take Two is complaining about fans accessing their own intellectual property, a practice that is implicitly and explicitly encouraged in the industry. Modders find themselves in an uncomfortable position: implicitly encouraged to tinker with game code but then threatened with legal action when that tinkering is not what companies’ desire. While the case of GTA San Andreas is easy to resolve because modders simply unlocked already present code, the threat of legal retribution by Take-Two is problematic because it may have a chilling affect on a lively and creative element of game design and also because it could cost the industry in the long run.

 

In terms of industry analysis, modders are a silent group of contributors to game design but their work is important. Modders often take design risks that corporation do not. Modder groups are, in part, composed of a population of craftspeople trained outside of the university environment (often adolescents) and thus serve as an entry point into the programming profession for those individuals not able to attend one of the many emerging design schools. As such modders have the potential to add heterogeneity to the video game design profession which may become standardized as it is formalized in professional curricula. Only time will tell how this case affects modding.

 

One last point, or rather a question that is always on my mind is: How should all this work be characterized when thinking about labor and production processes that contribute to the value of the net? Tiziana Terranova (coincidental moniker duly noted) had a great article in Social Text a few years back, putting this kind of “free labor” within a post-industrial frame work rooted in capitalist hegemony. After talking to some modders about the work that they do, I wonder if their work can fit into a purely one directional model where the fruits of free labor are solely enjoyed by corporations. Like I said before, there is an element of symbiosis in modder-video game company relationships. Perhaps a more complete picture is one that understands most of the content production on the net as “passionate labor,” (I barrow the term from Michael Perelman) where the gains to the producers are both within and beyond economy because sometimes modders are compensated monetarily and often they feel pretty good or rather love the work they do."

Comments

[GamaVeda]

1.

I don't think modders have too much to fear considering, as you mentioned, this Hot Coffee "mod" is purely an unlockable Easter Egg. Other publishers and developers know of the value of modders and will likely take precautions that Rockstar did not in future releases.

Modders are typically trying to create new content to extend the premise of a particular game. The fact that the Hot Coffee "mod" is even categorized under a comparable label is quite silly. Action Replays simply aren't Mods.

Take-Two was threatening to strike back because, at that time, there was question as to the origin of the Hot Coffee "mod". Take-Two didn't want to take responsibility, so they blamed those who had, supposedly, "modded" the game. It was a purely defensive posture and face saving act on the company's part. Once the source was discovered to be the publisher itself, Take-Two continued pointing the finger at the modders and companies that would profit from said unlockable. And naturally, what company would want to admit complete fault for including such scenes in a game?

I don't see the public being appalled by the hackers and modders. Their focus is squarely on Rockstar and Take-Two. If nothing else, hackers and modders have become the checks and balances system of sorts between content providers and the public at large.

[magicback]

2.

Some create with the ideal that ownership and some create with the ideal that things yearn to be free.

So perhaps the benefits of modder's production follows an endogenous growth path in that it has a linear (if not exponential) benefits to the communicty while only marginal (if not exponetially negative) for the company.

Creators may come and go, but the creation may live on with or without the creators.

Frank

[Daniel S. Holder]

3.

This is a very interesting predicament. Unfortunately, the only resolution I see involves group formation among the modding community. While this already exists on a minor level (nearly all major mods are the result of cooperative work) I think that modders will find it necessary to create more formal groups. Procurring profit for intellectual work has never been easy, but for individual modders it is nearly impossible.
Unfortunately, grouping modders could have the same effects Microsoft has had on the traditional programmer: it "formalizes" and "standardizes" the creative processes. With group re-structuring (such as is found in the revolutionary Valve Entertainment's corporate structure, or, lack thereof)I do not think it would be impossible for modders to obtain the legal rights they need and profit without compromising their unique designs.

Questions: How is this any different from the Grockster/Napster cases? Aren't game companies just selling technology- a source code? How are they legally responsible for user modifications? Theoretically, anyone with 3d Studio Max and Animator could create a sex scene: Why not put "Adult" ratings on these?

[magicback]

4.

Daniel,

3D Studio Max is a tool of creation while Grockster/Napster and games are transmission/distribution tools.

I think there is general 1st Amend. protection of creation, but legal restriction on transmission & distribution.

Organization and formalization is always an option for an collective to "bargain" collective.

Frank

[Hector Postigo]

5.

Daniel,

I think the difference between the Grokster case and what modders are doing is that Grokster is, as Frank put it, a distribution tool. The problem in terms of IP (intellectual property) is that Grokster was found to have other uses which would significantly impact the market for digital media (people use it to share songs as everyone knows)…hence the company was found to be in violation of copyright through contributory infringement. The issues of IP and modders are different; modders are confronting IP law on two fronts. First they are working with source code that is proprietary, which means that their use of it is regulated by some sort of license. These licenses typically say that the code cannot be exploited commercially without the permission of the owners, because any modifications to the code could be considered a derivative work and so by US law still under some control from the owner. So, all modders that change the source code are more or less doing so with the permission of the original authors. Modders also confront the IP of 3rd parties, i.e. folks who have nothing to do with the game but own some IP that the modders want to include in a mod. So it’s like me wanting to make a mod, using the Quake 3 engine and source code, where Bugs Bunny and Mickey Mouse go at it in Arena Combat. Warner Bros. and Disney might have something to say about that, even if id Software is “ok” with me doing the mod. So software companies are legally responsible for their code because they create the terms of a license…thus if some one violates the terms of the license by commercializing it or making a derivative work that the company doesn’t authorize, then the game company or the 3rd party owners can sue the modders…if they violated the license. The issue with hot coffee is that since the code was already in the game…modders did not put it there…the sex scenes are NOT a derivative work…they are owned and were made by the makers of GTA. Take Two tried to use the terms of its license to suggest that the modders that made hot coffee had somehow violated the license. Having read the license, I don’t see anything that might be “actionable,” because they did not make the scenes they simply unlocked them. Which brings me to my original point: even though companies often have no legal ground to stand on, they use the threats of lawsuits to intimidate and bring into line those they feel are using their IP in inappropriate ways.

In terms of organizing, modders have had a more or less amicable relationship with game companies. They get to use IP that doesn’t belong to them to develop themes in gaming they hold dear, in exchange they basically promise not to try to sell the mods. There has never been a case where the game company has brought a group of modders to court for control over a mod, probably because this is against tradition. My feeling and the feeling of modders I’ve spoken to is that the current relationship with game companies is working well for them. My concern is that these threats might multiply if modders begin to push on what is quickly being politically defined as acceptable gaming content.

The first amendment issues are a whole other ballgame. While creativity is protected the use of large information clusters like code, which have a proprietary dimension, may be considered commercial speech and so not wholly protected under 1st amendment, but now I’m in the realm of conjecture.
hector

[anon modder]

6.

I am a GTA modder, working mostly on my own, and have produced work for all three of the last GTAs.

I myself am puzzled by Rockstar's having left the Hot Coffee material in the game, and wonder at what level the decision was taken to leave it in. Was it simply the coders who knew it was there, or did it go higher? The likelyhood of it being found was very high, given the number and variety of coders who pick over the game code.

EA's reaction to the outcry over Hot Coffee was merely the standard corporate reaction to events of this type - obfuscate with language, partial denial, then making good with a patch whilst calming the waters. Altogether, EA fought a splendid rear-guard action in my opinion.

[Hector Postigo]

7.

I agree with you. Game companies have been working with modders for years. They often recruit modders into their ranks. They know how closely modders look at the code. They had to know folks had the skills to find that scene. The way I see it, there is no way that they actually believed it would never be found. I think it was simply an easter egg left behind for the hard core fans. When they started getting heat, they panicked and engaged in a lot of CYA. Like you, I’d be interested in knowing how they’re dealing with internally.

hector