Agency Sells Ads Inside Game Without Creator’s Permission

Ars Technica reports on a fascinating Subway ad campaign that took place inside the popular online game Counter-Strike. Apparently the ads for a $2.49 sandwich were injected into the game world with a special bit of ‘mod’ software distributed by an ad agency to certain operators of the server computers on which games of Counter-Strike are hosted. The ad agency paid the server operators to run the mod to give ad impressions in game.

Now advertisements in games are far from new. What is interesting is that a third-party company, entirely unrelated from Valve (the producers of Counter-Strike), has found a way to make money from the millions of people who play the game without dealing with Valve directly. Valve has implied that this violates the terms of their End-User License Agreement (EULA), which means there is likely going to be a lawsuit about the whole mess shortly.

But ignoring the EULA restrictions, we think it’s sort of brilliant. By dint of overwhelming success, Valve has created an alternate media channel all of its own—one filled with the coveted ‘young male’ demographic. But since Valve chooses to offload the cost of hosting games of Counter-Strike to fans instead of hosting all the servers on their own, they’ve made it technically impossible to prevent others from piggy-backing on their success.

In fact, since the Counter-Strike server operators have to pay all their own bandwidth fees to operate servers that generate money for Valve by way of more games sold, we think the Subway ad campaign is a pretty healthy way for server operators to recoup some of their hearty expenses. (Again, EULA violations aside.)

We’re as surprised as you, but we think we’re siding with the ad agency and the server operators on this one. Why should server operators have to pay the operating expenses for an online game without being able to generate their own revenue if they choose?

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  1. SamC says:

    Usually, I would side against a EULA, as there’s generally a lot of royal crap in there.

    However, not this one. IMO, what you do with a personal product on your own machine is your own business. It’s a different beast when money changes hands.

    This really boils down to a copyright infringement.

    Subway (via proxy – Engage & IGA) is using another’s copyright-protected work to sell a product, without permission from the copyright owner. Last I knew, this wasn’t legal. And, to make it clearer, the EULA makes it explicit that permission is not granted if money is exchanged. (well, as clear as EULAs get, that is)

    “You are entitled to use the Steam Software for your own use, but you are not entitled to: … (iii) exploit the Steam Software or any of its parts for any commercial purpose.”

    Copyright law gets pretty murky, but I think this particular case is pretty straight-foward.

    (As an aside, we’ve got ads coming in video games, across the cell phones, almost everything. I’m just waiting for ads to show up on toilet paper… at least those would get put to good use.)

  2. Joel Johnson says:

    I think arguing about the legality of this particular case misses the bigger point, though: If ads are going to be slapped onto everything, why can’t individuals use that to their financial advantage?

    Microsoft doesn’t ask for a cut of the revenue every time you run an ad on your website that is being served by IIS.

  3. SamC says:

    MS doesn’t want a percentage, they want a flat fee, up front, plus a chunk of change every couple years for upgrades.

    Microsoft has a different way of taking away all your money. MS licensing fees are almost calculus – per server, plus other costs based on desired functions.

    If you’re a webhosting company, you pay an additional per-user fee for each hosted site that uses IIS. So if you want to resell IIS, you have to pay extra.

    Here’s another comparison. How is this unlike Gator putting ads onto other people’s websites? (Sarcasm alert!) They needed to somehow recoup the cost of giving you that free password organizing software.

    More later, I really should get back to work. :p

  4. Very interesting topic.
    I’d hope that Valve would recognize that people are spending large amounts of money on their own servers to host the game and allow for the server owners to do this – seems an alternative than server owners charging a fee for its own users to access the server.
    However, by buying the product and installing the software on your machine you’re consenting to the User Agreement. Unless the User Agreement in itself is illegal, it needs to be followed. End of story.
    But Subway isn’t forcing its mod on anyone, so I think suing them is inappropriate (although, financially, the only sane target). The only people who should be sued for violating the User Agreement are the users, and Valve would be insane to press charges against their customer base.

  5. SamC says:

    I wouldn’t call it a ‘large amount of money.’ A CS server with 20 slots is about $30/mo. $30 pretty is cheap on the entertainment scale, considering the costs of movies, etc.

    I have little sympathy for people who complain about the cost of a game server. If you can’t afford it, play on someone else’s server or even host your own game.

    I’ve got my own gameserver (not CS) and shell out about $25/mo for it. I’ve asked for, and received about 2/3rds of the hosting costs via donations from the players. It was my agreement with my players.

    I could see Valve getting an injuntion against Engage and IGA for promoting that mod. The creators of the mod (IGA) are in violation of Valve’s license (and of copyright/trademark laws), so they’re open to being litigated against.

    No users would need to be sued. But they’d no longer make any money.