Stephen S. Wu-- SL: Legal Writer,, (408) 573-5737, 50 W. San Fernando St., Ste. 750, San Jose, CA 95113

Case Based on Addiction to a Video Game

Users of video games and virtual worlds joke about how addictive they can be. Few users, however, have thought about suing the game company for creating such an enjoyable playing environment that the game or world actually becomes addictive in an unhealthy way. Yet, that is exactly what a Hawaii resident named Craig Smallwood did. In a case entitled Smallwood v. NCsoft Corporation, No. 09-00497 ACK-BMK (D. Haw.), Mr. Smallwood claimed that he became psychologically dependent on and addicted to NCsoft’s Lineage II. In a decision issued in August, the federal district court in Hawaii permitted Mr. Smallwood’s case to move forward. For a copy of the court’s decision, click here.
The Smallwood case concerned a number of issues, including the issue of addiction. Mr. Smallwood claimed that he spent over 20,000 hours playing Lineage II from 2004 to 2009. He said he felt “euphoria and satisfaction” from playing the game. Nonetheless, Mr. Smallwood says he became addicted to the game, and complained that NCsoft failed to warn him of the danger of continued play. (I refer to NCsoft and the other defendant, NC Interactive, Inc. collectively as “NCsoft.”)

In addition, however, this game raises a metagaming issue. Mr. Smallwood claimed that NCsoft banned him from Lineage II because the company accused him of engaging in an “elaborate scheme to create real money transfers.” According to Mr. Smallwood, NCsoft locked him out of the game without warning, resulting in a loss of prepaid fees that he had provided to the company as part of his subscription.

Finally, Mr. Smallwood alleges that NCsoft undertook unfair measures to switch players from Lineage II to a new game, Aion. He contended that NCsoft’s lockout of his account was part of a scheme to cause him and other players to move their gaming activities to Aion. Mr. Smallwood claimed that NCsoft’s motive in moving players to Aion was to make Aion more popular and boost the company’s revenue.

After dismissing Mr. Smallwood’s complaint and first amended complaint, the court’s decision concerned NCsoft’s motion to dismiss Mr. Smallwood’s second amended complaint. The court denied NCsoft’s motion to dismiss for lack of subject matter jurisdiction, due to the limitation on damages in the user agreement. (Mr. Smallwood had to allege $75,000 to obtain federal court jurisdiction based on the fact that he and the company are citizens of different states.)

The court dismissed claims based on fraud, for failure to plead it with particularity. Mr. Smallwood’s claims based on NCsoft’s misrepresentations and unfair trade practices failed for this reason. The court also rejected Mr. Smallwood’s claim for intentional infliction of emotional distress, for failing to allege “outrageous” conduct, and his claim for punitive damages, since no such independent claim exists.

Nonetheless, the court permitted Mr. Smallwood to proceed under the theories of defamation, negligence, gross negligence, and negligent infliction of emotional distress. The negligence claims are based in part of the addictive nature of Lineage II. The defamation claim is based on NCsoft’s alleged false statements accusing Mr. Smallwood of attempting real money transfers. Accordingly, we may see the litigation of the metagaming issues.

NCsoft sought to create an immersive and fun playing environment. And it did its job so well, that players can’t stop playing, to the point of suing over it. I have to imagine that NCsoft noted the irony.