Experienced Points: The Litigation Hammer

By Shamus
on Aug 6, 2010
Filed under:
Column

splash_money.jpg

My column this week is about how the legal system is often used as a weapon. If you’re curious about the stuff I saw in the dot-com era that I alluded to in the article, then I have a bit more about that right after the colon at the end of this sentence:

It’s true that I was a paper millionaire back in 1999-2001 or so. It’s not as big a deal as it sounds. There were a lot of us at the time. Mostly tech types who knew lots about HTML, Java, C++, SQL, and very little about business.

For you young folks: How it worked was that every investor out there knew the internet was the Next Big Thing. They pictured how profitable it would have been to invest in automobiles just before the Model T started rolling out. Or how great it would have been to buy a slice of IBM in 1950. Or Microsoft in the early 80’s. And they were basically right. The internet WAS the next big thing. But so many people had come to that same conclusion at the same time that there was a lot more money than opportunity. The net wasn’t quite ready for what people wanted to do and (more importantly) the public wasn’t ready to start shopping online. Traditional companies weren’t ready to advertise online. It was just too soon. The market didn’t exist yet.

The reaction to the glut of investment money was that a lot of shady companies cropped up. Some were run by white collar con-men. Some were run by idiots who believed the hype. Some were run by genuinely smart and honest people who just happened to try to go into business when all of this was going on.

“Hey, it’s too late to get in on Cisco (the next AT&T!) but you can invest in our company, www.buy-unrefrigerated-milk-online.com! Our business plan is right in the domain name!”


Link (YouTube)

These companies would then entice techs like me to the table, “Hey, we can’t afford to pay you the kind of bucks you’d make at a big established firm, but we’ll pay you $insult a year and give you this big pile of stocks. We estimate that the stock will be worth an $OMGillion dollars once our company launches in a couple of months, which will more than make up for the low pay now.”

“Wow. Sounds good. I can just sell a bit of the stock to make up the diff-“

“Uh no. You can’t just take an investor’s money and then dump your own stock. There are SEC regulations controlling how all of this works. You’ll have to wait a couple of years before you can sell.”

Then the crash came and those stocks that were supposed to be worth $50 a share were worth $0.05 a share if they were worth anything at all. Then everyone turned on each other. The investors felt like the company sold them a pack of lies. The people that got hired were angry that they worked at a $60,000 job while carrying $80,000 in student debt and living in a city with a sky high cost of living, and suddenly learned that they weren’t going to be rich overnight. Then came the lawsuits. And the pink slips. At the time I remember reading a blog that posted every time a dot-com company went under, imploded, or got sued out of existence. It recorded how long the company had been running and how many people lost their jobs. That blog updated multiple times a day.

I actually had it really easy. I kept my job, I didn’t make any enemies, I was never personally dragged into court, and I managed to make just enough getting out to pay off most of the debt I racked up while I was in. A lot of people did a lot worse. I saw people lose their shirts, marriages wrecked, and friends taking each other to court. It was a sad time.

I wasn’t really all that upset about not being a millionaire anymore. I knew I hadn’t earned a million bucks. I hadn’t done any work that was worth that kind of money, and so it never really felt all that real. If it had worked out I wouldn’t be rich because I was smart or clever or hard working. It would have just been dumb luck, like finding a suitcase full of money.

Internet business is a lot healthier now. There are still pipe dreams and ill-advised knockoff companies, but that’s probably true in any business. We’ve got the bandwidth to actually do some of the stuff they were dreaming about in 1999, people are willing to shop online, investors are a lot more savvy, and the technologies (stuff like operating systems and web browsers) have stabilized quite a bit.

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From the Archives:

  1. Xodion says:

    I wish I had more free time, then I’d like to make that game. Except mine is called Lawsuit Tycoon™, so it’s totally nothing to do with yours.

  2. eri says:

    I don’t have that much interesting to say on this topic other than that I’m glad you wrote on it. Thanks for sharing your insight and experience.

    Also, that video is pretty great.

  3. wtrmute says:

    It’s a terrible world, sometimes. I sympathise with you, although that doesn’t help any of the people who had their lives destroyed… I guess I can be glad I live in a country where this lawsuit mentality isn’t quite as prevalent as in the US — and, I guess, that here judges in general have a Communist enough mind-set that they usually favour the little guy automatically, unless they’ve been bought.

  4. krellen says:

    I will point out that this litigiousness is not a new trend. The US has always been a litigious nation. When we were a British colony, we were full of litigious Brits. Now that we’re our own nation, we’re full of litigious Americans. Suing is simply part of American culture, and has been since at least the early 18th century.

    Other cultures found other ways to settle disputes. Americans sue. It’s just what we do.

    PS I hope you’re aware than Blizzard is now a full subsidiary of Activision, Shamus. You haven’t advocated a boycott, but you don’t seem to hate Blizzard and their business practices either, even though those business practices are Activision’s. It’s a bit of a double standard you’re holding.

    • eri says:

      It’s unfortunate that Blizzard has anything to do with Activision. As I understand it, Activision leaves Blizzard well enough alone, since Blizzard has already figured things out and Activision doesn’t want to ruin a good thing. Supporting Blizzard isn’t necessarily a bad thing – it’s not the people buying Blizzard games that are the problem, it’s the people that buy into everything else Activision does without a second thought.

      It’s much like the recording industry: if you want to support a band, you are going to have to pay that label, no matter how cruel and evil that label may be. In the case of games, supporting the developer also means supporting the publisher. Publishers know that gamers don’t care about the Activision or EA name all that much – they care about the games. They abuse this fact and try to get away with whatever horrendous crimes against humanity they can, because they know that gamers have no other choice if they want their developers to keep making games. It’s a very sad relationship which is not at all healthy or mutually beneficial.

      • krellen says:

        Activision makes money off Blizzard, and Activision still has a say in Blizzard business – as the RealID fiasco proves.

        Giving Blizzard a pass just because they’re Blizzard doesn’t fly. It’s not even run by the Blizzard people any more.

        • eri says:

          I hate to do this, but… source? I’m trying to remain idealistic here. :p

          Of course, I’m not saying that Activision doesn’t have a say in what Blizzard does. However, I do think that we should show Activision we appreciate dedication, honesty, and well supported products; and we should also show them that we despise their normal sweatshop/extortion model of doing business. I’d still like to think it’s worth making an effort on the basis of principle, even if in the end our numbers are too few to really make a difference.

        • Will says:

          Both Activision and Blizzard are owned by Vivendi, in fact Vivendi took over Activision and then merged Vivendi Games (their game division that included Blizzard) with Activision to create Activision Blizzard.

          Activision is actually a subsidary of Activision Blizzard.

          So, in fact, there hasn’t actually been any change of leadership at all; Blizzard is still owned by Vivendi.

          What the RealID fiasco proves is that Blizzard are still trying to innovate and come up with new solutions to old problems. What it also proves is that even Blizzard don’t always get it right.

          Vivendi, btw, Owns half the planet, so yeah.

      • Fenix says:

        If Activision is indeed leaving Blizzard alone I think that says something even worse: That Blizzard are the ones responsible for all the horrible anti-consumer practices put into place in SCII.

        No LAN and no spawns (want to play with friends? Everyone must have their own copy of the game and a strong Internet connection). On-line activation DRM and needing to login for single-player (unless you do off-line mode in which you need to disconnect your Internet and put in a lengthy activation code). 5 maps or 25MB of storage for custom maps (no local storage, forget custom assets, so much for the next DOTA), oh and also, those maps you made, according to the EULA Activision/Blizzard owns them and is free to take them down, repackage them, and sell them as DLC without your permission. Oh and if you want to play with your EU friend and you’re from the states (or vice versa) you need to buy a second copy and set that as your location (or if you selected the wrong region by mistake, Blizzard informs you that it’s not their problem and that you should just by another $60 copy of their game (true story, happened to a friend of mine and also saw 2 other posts in the support forums saying the same thing, no way to change it)).

        Also as a last small gripe that most people wouldn’t notice or care about they removed opengl mode on the Windows version of the game (on older Blizzard games (WoW, War3) you could add a tag to the command line for the game exe that would make the game run using opengl instead of directx (-opengl), it was mostly good for Wine users on Linux because the Wine directx libraries are never current and rarely run games at full speed (on a powerful rig things need to be turned down to medium to get a playable frame-rate and low to get a competitive one)) (Wow. This small gripe turned into a rambling paragraph.)

        In the end the game is awesome, but I wont buy it because it violates far to many of my principals for me to support Blizzard (and doubley so for Activision). Instead I played the singleplayer on my friends copy and will play the original SC for my competitive needs.

        Sorry, I just had to vent that somewhere and at least here it pertains to the discussion at hand (sorta).

        (Edited to look less like a super-massive wall of text)

        • houser2112 says:

          I’m boycotting SC2 for the same reasons. I really couldn’t care less about the multiplayer issues, since I suck at competitive RTS games, but I can see how they would be features people want that have always been there. What is the sticking point for me is that I don’t like having single player games that must phone home to work. I just finished playing through SS2, a game by a now-defunct company, and it if had similar “features” at launch, would be unplayable today. Sorry Blizzard, you just lost a customer for SC2, and you’ll lose me again if you release D3 with this bullshit.

          • Blackbird71 says:

            I’m steering clear of SCII for many of the same reasons. My LAN parties have been running the original SC for over a decade now, and it appears that they will continue to do so.

        • Malkara says:

          Wow, this is the largest bag of mis-information I have ever read.

          • acronix says:

            Then by all means don´t perpetuate it! Let´s us know what is wrong and why. Saying “this is totally false!” is totally useless without evidence.

            I myself haven´t got the game (too pricey down here where I live) and haven´t read much about it´s technicalities. So, please, inform those of us who are ignorant in this matter.

    • Nathon says:

      Speaking of Blizzard, I know you went off on the lack of LAN play in StarCraft 2, but what about the asinine activation? In order to play the campaign, the single player bit, you have to both have and use a working Internet connection. They get around the five nines uptime requirement for their servers by only requiring you to check in once a month or so, but you have to check in periodically in order to play the game. This is bad.

      It’s not as bad as being required to check in with their servers every month. You only have to connect to them within 30 days of when you want to play the game. That’s not good, it’s just a correction of a common misunderstanding of the system. I know that I can still play StarCraft on Battle.net today, and it came out over 10 years ago, but where is my guarantee that their nanny-servers won’t ever go down?

      I really would like to give them my money. While LAN play is important to me, I’d be willing to pay for just the single player game. But then they pull this crap and I’m stuck having principles but no game. Grr.

      • Tesh says:

        I still find it funny that when Ubisoft pulls something only slightly less idiotic (Assassin’s Creed 2 for the PC) with nanny servers, gamers went nuts. SC2 pulls the same sort of nonsense, and the game makes millions.

        Speaking with your wallet just doesn’t say enough sometimes.

        • Jarenth says:

          Now, I don’t know how other people’s experience with this thing are, but for me, the first time I launched SC2 offline it displayed a “You appear to be offline. Would you like to play offline? No problem for us.” prompt.

          Granted, you don’t get achievements, for reasons I can’t completely grasp. But I for one could certainly play, the single player bits at least.

          EDIT: Re-reading the earlier comments, I don’t actually know anything about being forced to go online every month or so. If that’s the case, take this comment for the quickly-posted ignorant defense-reflex that it is.

  5. (LK) says:

    Activision is a frothing retard, which would normally kill a publisher.

    However, they’re frothing retards who managed to purchase a lot of valuable IP. They will ram it into the ground eventually, but we’re stuck with them and their toxic minds for quite a long time.

    Also, honestly, all it would take to deter this kind of illicit seizing of rights would be to criminalize that variety of lawsuit when it occurs in bad faith. Attach heavy fines to be awarded to the defendant if it can be shown the plaintiff is acting in bad faith in an extortion attempt. With a big enough carrot, the defendant could likely find competent counsel who would be willing to charge less up front in exchange for a slice of that fat fine should they win.

    I’d also say that since this practice obviously is extortion, that it probably should be criminally prosecuted as such on occasion.

    Corporations don’t mind losing cases as it’s part of the game, but they would mind being forced to pay the company they tried to co-opt, and their executives most certainly would mind being individually prosecuted for running extortion rackets.

    • eri says:

      Of course, this sort of thing would never fly. The political side of the United States is tied up with the corporate side to far too great an extent, and so long as that’s the case, we will never see laws that are able to render corporations impotent with regards to the highway robbery that keeps them in business.

    • Nasikabatrachus says:

      Or, there could be a rule saying if party X is worth A times as much as party Y, party X must pay for party Y’s legal representation by an amount greater than or equal to the cost of party X’s legal representation. Assuming it passed the gatekeepers of congress (not likely) it would change the environment for a time, and Activision would have the foundation of its exploitative setup removed for a time. There will always be exploits, though, so really what’s needed to avoid the exploitation of the system is to have a periodically changing system. Then you get into the problem of who decides what is changed and when…

      • swimon says:

        Wouldn’t that system just mean that every big companies legal side gets separated into smaller individual companies that own the IPs. That way they aren’t any bigger than the defendant and can bypass this new law.

        I’m not a lawyer or anything so take this with a hand full of salt but I think that in Sweden the loser of the case, so to speak, pays the legal fees of both sides to prevent this very scenario. This has unfortunately led to the practice of excessive spending from the big companies side so that if the person with less means loses he/she is basically bankrupt. Insurance companies does this so that no one will ever challenge them in court for fear of losing.

        That said, lawsuits aren’t that common in Sweden from what I understand.

        • Mari says:

          That’s often (but not always) the case in the US as well. Unfortunately, few non-scumbag lawyers are willing to take a case on the basis of “I can’t afford to pay you for your time and work but if we win the other guy will…” Sure, ambulance chasers work on contingency but not the kind of power-suit-wearing champion of the courtroom that can take on, say, a squad of Microsoft lawyers.

    • Mari says:

      I think your solution falls under Shamus’ “closing one loophole opens another” scenario. It works on the same principle as punitive damages and we’ve seen where that gets us (McDonald’s coffee lady, anyone?) in court rooms. Who is the arbiter of “bad faith” in this scenario? The same juries that decided $1.9 million was an appropriate amount for a Jamie Thomas-Rasset to pay for sharing 24 songs via Kazaa? The ones that award $4.4 million to a guy who found out accidentally that his BMW had been repainted because it got minor damage during shipment that amounted to 1% of the car’s value and nobody told him about it?

      • Zeta Kai says:

        You are talking about some isolated incidents of bizarre extremes. The entire system isn’t like that. Anything at all like that. If every case ended that way, the whole system would collapse in a piranha-blood-frenzy as everybody sued everyone as fast as possible to get a multi-million dollar settlement. The system is horribly flawed, but not in the way & to the degree that you suggest.

        Also, many lawyers are willing to take cases pro-bono, IE paid only upon winning a settlement, & usually only a percentage of said settlement (33% is the most common figure). I’ve been the plaintiff in two lawsuits, both cases were taken pro-bono by my lawyer, & we won both times. Now, I wasn’t a defendant, which makes a big difference, & neither case required a team of lawyers from either side, but pro-bono work is more common than you imply.

        • Will says:

          Alot of really good or confident lawyers will also go for pro-bono stuff, usually in combination with a lesser up-front fee. The reason being that if they win they’ll usually get far more money than if they took an upfront fee, and if they’re successful already then the loss of money should they lose isn’t a major issue.

          Smaller or inexperienced lawyers also go for pro-bono cases for pretty much the same reason; higher risk, but higher reward. It’s the ones in the middle that refuse the pro-bono cases because they can’t afford to lose their fee.

          At least that’s the way it works down undah. Although i may have a skewed sample-space due to personally knowing a magistrate.

          • Mari says:

            I think you guys are confusing “pro bono” with “contingency” cases. Pro bono (“for good”) are cases which lawyers take on at a reduced or non-existent fee as a sort of charity, to see that justice does in fact come to the “little person” as well as the corporate giant. The American Bar suggests that lawyers work at least 50 pro bono hours per year although state bars have their own guidelines and it’s all a minimum anyway so many lawyers do in fact spend a much more significant amount of time doing pro bono work.

            Contingency is where a lawyer agrees to take a case with little to no up-front cost to the client on the agreement that IF the case wins, the lawyer gets a percentage of the award/settlement up to his usual fees (or above in certain cases in US law where punitive damages are awarded). It’s another way to help ensure equal access to tort for the less wealthy. Unfortunately it frequently leads to “cherry picking” cases where only the clearest, strongest cases are taken on to help ensure payment.

            And yes, high punitive damage tort abuse IS the exception rather than the rule. Beyond that, both of the cases I cited later had the awards reduced by higher courts which is common in such cases. But the fact remains that it IS a loophole in tort law that CAN BE and IS abused, just like what Activision (and other game developers, too) is doing. That was a point Shamus made in the original article. It’s an imperfect system that can be abused but most fixes for the abuse can lead to other abuses. There is no perfect answer to create a perfect system.

            • Deoxy says:

              Agreed on them confusing “pro bono” with “contingency”.

              But actually “contingency” has been a VERY bad thing for our legal system, setting up all kinds of perverse incentives. That combined with class action suits has done unbelievable amounts of damage.

              Best recent example: A Million Little Pieces (or whatever it was called). The guy went on Oprah, blah blah blah, drug abuse history, blah blah blah. The book was his autobiography.

              And then it came out that most of it was fiction. Ooo, bad PR. The publishing company offered a FULL REFUND to anyone who wanted it.

              Some lawyers file a class action lawsuit against the company. The result? A large fund of money set up to give refunds… and the lawyers got a large cut of the money. WTF? The refund was ALREADY offered to the people! They gained nothing, and the lawyers got a large chunk of money. Nice.

              “Contingency” lawyers can take several bad cases (that is to say, cases with no merit), get one or two settlements from those, and come out ahead (and often with little work involved). It’s easy to see how that creates bad incentives and damages businesses.

              Another problem with our system is that the “large fines for bad lawsuits” only go one way: to the plaintiff. If you are the DEFENDANT, you have to sue them BACK for that, and even then, you don’t have a very good chance. This also creates serious perverse incentives.

      • Sumanai says:

        The “McDonald’s coffee lady” thing wasn’t nearly as stupid as people believe. The coffee was actually scalding hot, indeed McDonald at least used to have coffee that was hotter than elsewhere. She got burned through sweatpants within seconds and I’m not talking “mild redness, with uncomfortable burning sensation”, from what I recall (and I recall wrong!) it was 2nd degree burns. It was settled out of court because McDonald knew it couldn’t win it.

        But I’ll try to look for the actual article where I read all that.

        Edit: found one.
        http://www.lectlaw.com/files/cur78.htm

        • krellen says:

          I live in the jurisdiction of that case, actually. A more important fact to know is this was the fifth or sixth time a similar case was brought before McDonald’s. The punitive award was intended to make them change policy (which it did), and not as a wholly arbitrary settlement.

        • Nathon says:

          Seconded. This case was largely misreported in the news. This is a good example, as far as I can tell, of abuse of the system.

        • Deoxy says:

          You have the details of this case completely and totally wrong.

          Coffee CANNOT be significantly “too hot” – it would boil away. The industry standard for coffee is 190 degrees, at which point, spilling the coffee in your lap can (and does) cause second and third degree burns. Starbucks, etc, serve coffee that hot RIGHT NOW.

          Secondly, they only settled after the main part of the case (settling to avoid a long appeals process is common). The amount awarded WAS indeed arbitrary, as the jury themselves said – it was supposed to be one day’s worth of worldwide coffee sales for McDs (which is completely arbitrary in regards to the case, because it had nothing to DO with the case).

          There have been quite a few such cases brought, but this is the only one that won – that is, it was a FLUKE, a mistake by the court system. McDonalds was performing to STANDARD industry practice (go measure the temperature of the coffee at your local Starbucks, for example).

          Oh, and there already was a warning on the cup that the coffee was hot – the jury decided it wasn’t big enough.

          Try Overlawyered.com for ongoing examples of ridiculous results from our legal system – my personal favorite is the guys who used outdoor glue for carpet in a basement, admitted they had read the large warning on the can about never using the stuff inside because it was highly flammable, but sued anyway, AND WON.

          • Sumanai says:

            I thought I already gave the impression that I wasn’t a reliable source, but here goes:
            I remembered wrong. Click the link, and read the facts there.

            More direct notes:
            There are levels between “warm” and “vapour”. The point in the case was that it wasn’t “hot” but “scalding”.
            The court found that the temperature was at a higher level than it was in most places (also hotter than in home). Whether or not they tested Starbucks in particular is different thing, and a question rises: did they serve coffee that hot back then?
            The charge sounds to me like it was meant to be punitive, not compensation.
            The warning thing sounds ridiculous to me as well.

            My main point however was that it’s been misreported, not that it was perfectly sensible. That is, I don’t find to be exactly the best example of the US justice system failure. Well, outside of the warning label thing.

      • (LK) says:

        I think the solution also has good precedent for the capacity to improve the system overall.

        There are holes in anti-SLAPP (strategic lawsuit against public participation) legislation, too, but the system is much better off having had such legislation passed than it was without it.

        In some ways I think this issue has obvious parallels to SLAPP litigation, in that the goal of the plaintiff is not to win the case but to punish the defendant by means of the cost and effort of their defense.

  6. eri says:

    Frankly, after reading a little bit and thinking a little more, I’m at the point where I don’t see much hope in trying to eke out a happy existence in Western society. I think that I have silently resolved to myself: should anyone choose to exploit me, or fire me, or otherwise damage me, in a way which I cannot fight back in a reasonable manner, I will resort to physical violence followed by suicide. It seems like there isn’t any other recourse, and it’s ultimately self-defeating, but it’d sure be glorious to rip some fat sociopathic fuckbag’s balls off and stuff them down his throat, tear his fingers and toes off one by one, then skin him alive.

    • Nersh says:

      You know, I think I feel the same way, except that instead of becoming violent, I’d become moody, and my moodiness would infect my attackers. In the end, they’d be the ones commiting suicide.

      And then I would listen to Eduard Khil.

      Good read, Shamus. Enlightening, and all that.

    • Mari says:

      Wow. I kind of feel like a Disney character now (which is a weird feeling for me) next to you. I just fantasize about hosing people down with water guns and cream pies when they wrong me.

      As far as Western civ…well, it’s no great shakes but overall I prefer it to “developing nations.” In the end, though, I just dream of buying a small Caribbean island and becoming a benevolent dictator to a small indigenous population of glistening men in loincloths. OK, that Disney feeling is gone now.

      • eri says:

        I have a morbid sense of humour sometimes, but I’d like to clarify that I’m not really serious. :p In practice I’m actually a pacifist, it’s just extremely difficult to reconcile problems with words when you have so many parties who refuse to listen, and then do everything to ruin you in ways you cannot possibly defend against. I feel like my life would be better spent in the eyes of the corporate world if I dumped my wallet on their desks and then slit my throat.

        • Mari says:

          I never thought you were or I would NOT have spoken up, I would have edged away so as not to draw the notice of the crazy person ;-) It just shows how different people can be. Both of us are engaging in fantasy but yours is gritty and grim while mine is – well, outright silly. But it serves the same purpose for each of us: to relieve anger and a sense of powerlessness.

    • acronix says:

      You could also try to flee to the East, and see how the legal system is around there. Then you can decide to become hara kiri with more reason!

    • Deoxy says:

      You know, as crazy as it sounds, I think society would benefit from a few of those. That’s not to say that something like that would be a GOOD thing, mind you, but that things are that bad (or at least, pretty close to that bad).

      People in positions of power are often almost completely isolated from the consequences of their bad decisions. Changing the system to fix that would be better, but I’m not even sure where to start, nevermind convincing enough people to get it done. A simple reminder to certain people that completely ruining someone’s life might have real consequences to them would have a good effect.

      It’s a sad day that I could even contemplate that. :-/

  7. Zeta Kai says:

    I remember that website, which I guess you’d call a blog now, even though back in 2001, the word “blog” didn’t exist. For the record, just so other people know about it (I’m sure that Shamus is familiar with it), the site was called Fucked Company, the Dot-Com Deadpool (pardon the language, but that was it’s name, a parody of Fast Company magazine). I checked it everyday, because it was something to laugh about while I watched my internships evaporate. I was in college for a Digital Media degree, which might have been worth something 2 years prior (graduation date? February 2001). I actually saw some of the companies that had offered me internships & even paying jobs implode before my eyes on that site.

    It was a very surreal experience for everyone involved. I liken it to thousands of young men across the country (& indeed the world) all coming together to start a rock band. The band makes a huge hit on their first EP, & all the band-mates become coked-out rock stars overnight as more money than they know what to do with is suddenly thrown at them. Then the follow-up album tanks, the fans scatter, the money dries up, the band-mates start arguing, & the whole house of cards collapses in a wreckage of shattered hopes & disillusioned youth.

    Not that I’m bitter about it or anything… ;)

  8. thebigJ_A says:

    Dear Shamus,

    I am a lawyer representing Big Game Publisher X. I’m sorry/happy to inform you that you are in violation of our trademark of “SimLawsuit”.
    We have been in possession of this trademark since [Insert date several days before you thought of this game]. We are reasonable people, there’s no need to bring this to court. Simply send me, er, I mean, our company, a check for $2 OMGillion, and this will all go away.

    Thank you for your time,

    ThebigJ_A,
    Lawyer for Tim Langdell

    (not really, so please don’t sue me, Timbo)

    • Andy_Panthro says:

      You have to watch the edge of your edginess when using Tim’s name in vain, he might get so annoyed he goes over the edge!

      Of course with your note at the bottom edge of your post, I’m sure you’ve edged away from any legal problems, provided you remember to keep yourself within the approved edges of humour…

      • Pickly says:

        Thank you for reminding me of that comic. :)

        As for the lawsuit, trademark be D*mn*d, I’m making the game anyway. Questions, comments, and legal matters may be sent to:

        Pick Lee
        1060 W. Addison
        Chicago, Il, 60-whatever the last few numbers are.

        edit: the names Pickly, Pick, Pick Lee, Lee, and all variations are trademarks of vinegar cucumber industries, LTD. and may not be used without permission, etc., etc.

  9. Tizzy says:

    Huh. Way to bum all of us out right before the week-end! :-(

    That being said, an interesting read, especially the part about your own experiences.

    As far as the tendency of big companies to sue at the drop of a hat, Dave Sim of Cerebus fame (infamy?) wrote extensively and lucidly about the comic book industry, and the parallels with the video games world abound. He notes in particular that big publishers have big fixed legal costs anyways, so they might as well put their lawyers to work while they’re at it, the added expense is negligible. The lawyers on the other hand have every incentive to inflate the necessity to go to trial (esp. over intellectual property issues) to keep the publisher hooked on their indispensable legal services.

  10. Jarenth says:

    Interesting backstory you have there, Shamus.

    On topic: I’m in the habit of seeing this sort of thing as the unavoidable consequence of the gaming industry becoming an actual industry. Which is what we consumers have been actively demanding – if not vocally, then with our wallets – and it carries benefits as well as downsides. It’s a situation that should be addressed sooner rather than later, but it’s good to keep in mind where it came from in the first place.

  11. Irridium says:

    This is why I’m scared with Bungie signing on with Activision. I know Bungie stated that they still have control over everything, but I would hate to see one of my favorite developers get destroyed by them.

  12. SatansBestBuddy says:

    It’s little stories like this that remind me why I’m boycotting Activision.

    Sure, I’ll think to myself from time to time, “Boy, StarCraft 2 looks all kinds of fun! And I’ve been itching to get back into WoW one of these days! Why don’t I just do it right now?”

    Then I’ll read a story about how Activision tried to buy a man’s name from him, or they’re newest plan to screw over PC players, or maybe see a clip of Guitar Hero, one of my all time favourite games, as it’s hollow husk is being run even deeper into the ground. (if memory serves and this isn’t just a rumour I randomly read, they’re actually closing down Neversoft after they finish GH6, cause, you know, the only way to reward the loyal company you’ve been cracking the whip at as they made 12 games in 3 years is to fire them all and keep any profits their games make for yourself)

    • Mari says:

      Completely unrelated to Shamus’ post, but do you mind telling me what about StarCraft 2 looks fun? No, it’s a serious question. I know NOTHING about it except that there is NOWHERE on the internets I can go right now without seeing ads for it (even though I do, in fact, use an adblocker) which makes me loathe it quite a lot. Maybe you could sell me on the actual game and I might play it in a few years when the price has gone down to what I’m willing to pay for games and I’ve forgotten how much I hated the media blitz.

      • Klay F. says:

        Thats actually a complicated question to answer. To really know why Starcraft 2 has been so hyped, you have to understand why the original Starcraft was so popular.

        If you don’t already know, the original Starcraft was extremely popular (for a PC game) in its day. So popular, in fact, that those wacky Koreans went and made it a national sport, with professional players earning somewhere around $OMGillion.

        Add to this the fact that the sequel took 12 years to finally appear (apparently Blizzard was too busy harvesting their Warcraft money farm to make any new games), and yeah, just about anybody who played the original is excited about the sequel.

        • Will says:

          Actually professional players in Korea have masses of fame, but don’t actually earn all that much money at all. The producers of the various competetive events however…

        • Herman says:

          So it’s popular… because it’s popular?

          • Atarlost says:

            It’s popular because in some bizzarro unduplicatable miracle they made an RTS with nearly perfect balance that actually has multiple viable strategies. Every other RTS either converges into all factions doing the same things and any that can’t being discarded.

            Starcraft 2 won’t live up to the hype. Nothing could. They’ve been developing their MMO too long to still have the magic touch for RTS balance.

      • acronix says:

        It´s what I call a Real Time Horde Simulator Macro/micromanager, much like it´s predecessor.

        You basically learn the game mechanics, the mechanics of your picked race, then make a horde of troops, and whomever has the biggest horde wins. If hordes are of the same size, then who has the best units wins. If units are comparatively similar, then who can micromanage (aka: control the troops directly) them better wins.
        Units are also featured in a rock-paper-scissors triangle, which means that you can´t just make any horde, you need a horde of mixed units that are effective against whatever the enemy will throw at you. This translates into using the side´s best anti-ground unit with the side´s best anti-air unit. (And best units means “the one that dishes out most damage before dying horribly”, even if it doesn´t have any bonuses agains the units it will be facing).
        It also has some sort of uber-campaign featuring 25 or so missions with a plot that ends in fanservice (if all those spoilers I read are correct), which is probably the best thing.

        So, I guess it would be fun if you enjoy learning the tricks of a game and like to throw bajillions of troops to be slaughtered. Just don´t expect any strategy. And certainly don´t expect any unit to survive more than a couple of seconds. No, not even that giant starship; guys in power armor and rifles can mow it down.

        • Will says:

          Everything in that post is wrong.

        • SatansBestBuddy says:

          Okay, lets count the ways this is wrong, shall we?

          It´s what I call a Real Time Horde Simulator Macro/micromanager, much like it´s predecessor.

          You basically learn the game mechanics, the mechanics of your picked race, then make a horde of troops, and whomever has the biggest horde wins. If hordes are of the same size, then who has the best units wins. If units are comparatively similar, then who can micromanage (aka: control the troops directly) them better wins.

          … that’s kinda right, but a very… inelegant way to put it.

          Units are also featured in a rock-paper-scissors triangle, which means that you can´t just make any horde, you need a horde of mixed units that are effective against whatever the enemy will throw at you. This translates into using the side´s best anti-ground unit with the side´s best anti-air unit. (And best units means “the one that dishes out most damage before dying horribly”, even if it doesn´t have any bonuses agains the units it will be facing).

          What do you think this is, Fire Emblem?

          “Best” does not always equal “more damage,” it’s a variable that changes with every situation; maybe a mix of Marines and Goliaths would be a good idea if you don’t know what the enemy has planned, maybe some star fighters and a battle cruiser would be best, maybe it would better to send in a troop carrier over the ravine while you set up a distraction on the other side of his base, and that’s not even getting into units with special abilities that you have to trigger yourself.

          There’s more to every fight than “his number is bigger than mine!”

          It also has some sort of uber-campaign featuring 25 or so missions with a plot that ends in fanservice (if all those spoilers I read are correct), which is probably the best thing.

          I’ve been avoiding spoilers, so I have no idea if this is right or wrong, but considering how intriguing the first game’s plot was, I doubt they’re gonna drop everything and just concentrate on one side of the story.

          So, I guess it would be fun if you enjoy learning the tricks of a game and like to throw bajillions of troops to be slaughtered. Just don´t expect any strategy. And certainly don´t expect any unit to survive more than a couple of seconds. No, not even that giant starship; guys in power armor and rifles can mow it down.

          Wrong, wrong, wrong, wrong, WRONG.

          There is tons of strategy, both long term and short term, that need to be considered if you want to be successful, and unit health and management is paramount to ensuring victory, so I don’t see how you can say “no unit lasts more than a few seconds.”

          I know if I spent the time and effort to build a battle cruiser, I’m not gonna be an idiot and just throw it at their defenses without softening them up first.

          I mean, if you ever want to be better at a game, then YES, you need to learn the ins and outs and tricks of the system, that’s the same as any game that you can be competitive in, be they racing (finding the best spots to drift), fighting (learning how to counter whatever your opponent throws at you), FPS (learning maps and the best route to objectives and back), and in particular, Real Time Strategy. (they have that name for a reason, ya know)

          • acronix says:

            Ah, that´s better!

            … that’s kinda right, but a very… inelegant way to put it.

            I wasn´t going for elegancy when speaking of the game. Elegancy certainly would make it look better. I´m just balancing all the elegance that is said about this game with my brutishness!

            “Best” does not always equal “more damage,” it’s a variable that changes with every situation (…)

            I guess you misunderstood. I didn´t say the best unit is the one that deals more damage, I said it was the one that deals more damage before dying. The death rate of the units against each other is the variable you speak of, basically.

            I’ve been avoiding spoilers, so I have no idea if this is right or wrong, but considering how intriguing the first game’s plot was, I doubt they’re gonna drop everything and just concentrate on one side of the story.

            There are two other campaigns on the way, so evidently the thing ends with enough ropes for the next one to tie up. However, for the information I have it seems it is actually going to be a one sided tale: the good guys´. They could still change it for the next campaign, though.

            Wrong, wrong, wrong, wrong, WRONG.
            Ending with caps after a five time repetition was a nice touch.

            There is tons of strategy, both long term and short term, that need to be considered if you want to be successful, and unit health and management is paramount to ensuring victory

            It always looked to me like there were tons of mechanics though, so maybe we have the problem that I understand “mechanic” what you understand as “strategy” and vice versa.

            so I don’t see how you can say“no unit lasts more than a few seconds.”
            Seems like I forgot to add a “in combat” there. Apologies.

            I know if I spent the time and effort to build a battle cruiser, I’m not gonna be an idiot and just throw it at their defenses without softening them up first.

            The problem isn´t being careful (though it would certainly help), the problem is that any unit, in sufficient ammounts, can kill any unit. I haven´t made the actual math on this, but I think a bunch of marines could bring down your battlecruiser or leave it red. It makes the “Battlecruiser” feel like it´s made out of cardboard.

            I mean, if you ever want to be better at a game, then YES, you need to learn the ins and outs and tricks of the system,

            Learning mechanics is not the same as making an strategy. Learning where are the best spots to drift is not an strategy: it´s a mechanic. Learning to counter your enemies attacks in a fraction is not strategy: it´s a mechanic. The same way, learning a build order to rush your enemy or one to defend against one is not an strategy: it´s a mechanic you repeat to perfection. The Starcraft actual strategy comes into play when two different mechanics clash against each other and each player has to adapt to the enemies´ chosen mechanic. And even then it´s just a matter of horde size/quality and how fast you can press the keys in the keyboard.

            • Daemian Lucifer says:

              About the duration of units:Each race has ways of prolonging their life.Sure,you can just send your marines to die,or you can mix them with medics and have them survive at least twice as long,or even never die.You can repair your vehicles on the field,so even if that battlecruisers ends in red,it will be green before the next battle.

              Protoss have their shields,and with sentries,they can even minimize the damage.

              Zerg have regeneration,and burrowing,so you can always burrow your injured units and let them heal.

              And only the zerg have units that die like flies,but thats what their races feature is:cheap but weak.Besides,in huge battles,of course youll lose tons of units.Thats what huge battles are,by default.In small skirmishes,the winner will sustain minimal losses.

              About strategy:Wrong again.So what,placing your canons behind the front lines in real life is now mechanic,not strategy?Bombarding your enemy with planes and artillery before charging in is mechanic,not strategy?Because every (sensible) general has done that ad infinitum.Thats why we teach all the known strategies to officers,so they can use them later in battles.Just because its being used again and again doesnt make it not strategic.Learning the build order,exploration order,when to expand and where,etc,thats all strategy.Rushes may be a cheap strategy,but they are strategy nevertheless.Just because you learn them and then repeat them in every game,doesnt make them non-strategic.

              Now if you were to argue that rtss are simplified strategies,then yes,youd be correct.After all,games are simulations,and lots of things are omitted.Compared to real world battles,they are very,very simplified.But that still doesnt make them non-strategic.

              As for the story,it was never black and white in starcraft 1,and its not black and white here either.Sure,you do fight the evil dictator,but the pacts you make in order to defeat him arent always that clear(for example,there is one mission where you have to choose to either side with homicidal psychos or the aforementioned dictators forces,without actually knowing which one will end up being less of an evil in the long run).

              Besides,the overarching story is not just about fighting the dictator,or the zerg,but against destruction of life.And yes,it does end in redemption,but lets not forget that first campaign of the original starcraft ended on a bit of a high note.Its the second campaign that made things darker,if you were not a zerg lover.

              • acronix says:

                You are right. I´ll still stick to my idea that when you repeat something ad infinitum then you are making it a mechanic (because I´m hardheaded like that!). It becomes strategy again when you need to adapt it.

                Edit:
                Other thing: about the storyarc, I wasn´t complaining it wasn´t “grey morality”, I was pointing out that you don´t get to see the evil ones point of view like in the original (You got the Zerg in the original campaign, then the Directorate (though I guess we could argue if they were bad guys) and Zerg again in Brood War).

                “Besides,the overarching story is not just about fighting the dictator,or the zerg,but against destruction of life.”

                I guess stopping the destruction of life is not a good thing.

                • Daemian Lucifer says:

                  Yes,but thats why we will get the expansions with the zerg and protoss stories.And having 26 missions that are all interesting and different is much better than having 10 samey ones,so I prefer it this way.

                  Well,entropy is a natural thing,so you may go to argue that destruction of all universe is a good thing because its natural.Also,kerrigan helped everyone fight against the directorate,but still plotted against everyone else while doing so,so she hardly was doing a good thing.

            • SatansBestBuddy says:

              me·chan·ics (m-knks)
              n.
              1. (used with a sing. verb) The branch of physics that is concerned with the analysis of the action of forces on matter or material systems.
              2. (used with a sing. or pl. verb) Design, construction, and use of machinery or mechanical structures.
              3. (used with a pl. verb) The functional and technical aspects of an activity: The mechanics of football are learned with practice.

              Compared against:

              strat·e·gy (strt-j)
              n. pl. strat·e·gies
              1.
              a. The science and art of using all the forces of a nation to execute approved plans as effectively as possible during peace or war.
              b. The science and art of military command as applied to the overall planning and conduct of large-scale combat operations.
              2. A plan of action resulting from strategy or intended to accomplish a specific goal. See Synonyms at plan.
              3. The art or skill of using stratagems in endeavors such as politics and business.

              To go back to the racing analogy, learning to drift is learning the mechanics of a system, learning when and where to drift is where the strategy comes from.

              Same principle can be applied to Starcraft 2, or really any game with depth that uses competition against other people as it’s main selling point.

          • Pickly says:

            Better to just ignore this comment, actually. It’s one of those deliberately snarky comments that’s just there to grab attention.

        • Sanguine says:

          This is either blatant trolling, or a conclusion born of hideous incompetence.

          Please don’t play any random team games. :(

          • SatansBestBuddy says:

            I only ever played SC1 with friends over LAN, and we all despised cheap tactics ala Zerg rush.

            Another reason to avoid SC2; all my friends I played with are off doing other things and I haven’t played with them in forever, plus even if we did get together and try to play, we’d all have to have an internet connection and a copy of the game.

      • Sumanai says:

        Best way to find out if you’d have fun playing Starcraft 2 would most likely be by playing Starcraft 1. So if you find it cheap with the Brood War -expansion, I suppose you could just go for it. Assuming it works in your OS. So I guess easiest would be to watch videos of either one.

        The basic gameplay is thus:
        You have to collect resources (Crystal and Gas) in order to build places, which is in order to manufacture units. Which in turn do their best to be ineffective, while appearing active (they fire on enemies automatically), unless you micromanage them.

        I’ve read that one of the unofficial resources is the player’s attention, by which the writer meant that you can’t micromanage everything and that part of the game is to know what to micromanage. Also it seems that the fandom is dead set against units that can actually do sensible stuff like prioritised targeting, because Micromanaging Is King.

        I guess what I’m trying to say is, that it’s a Realtime Headache Inducer, at least if played online. But Starcraft 1 had an interesting story, in my opinion anyway. It was also kinda fun to play against the CPU with a friend. Base building is still boring though.

      • SatansBestBuddy says:

        It looks fun because it’s taking what made StarCraft 1 fun and adding on to it without fucking it up, a delicate balancing act that takes a masterful hand to do properly.

        To really get into why, well, why does anyone enjoy a RTS game?

        Strategy and tactics, unit management and base management, weighing whether it’s worth the cost to upgrade weapons for your ground troops to better defend the base or build a few more star fighters to hit up enemy attacks before they even get to the base, and then there’s the rush you get with combat, like, you’re setting up a second base when an enemy patrol finds you, oh shit, better get those defenses up FAST and hope that you can fend off his next attack while simultaneously preparing to mount an attack of your own because your cloaked scout found his main base and you can see he doesn’t have as many defenses as you but he’s already got a bigger army.

        It’s a damn fun game of chess, only with pieces you can power up and grow in number, economic management, and all in real time, so it’s not just if you can think fast, it’s if you can react fast, too.

        It’s a lot of fun, just find a demo and try it out for yourself, you’ll see.

        I’m not gonna buy it, though, cause most of what made SC1 really fun was LAN play, which is now gutted and tossed for reasons that amount to, “We’ll make millions doing it our way!”

        • acronix says:

          That´s actually quite true. They took Starcraft 1 and added stuff to it without corrupting it´s essence or changing it completely: they didn´t try to innovate with the gameplay, for once: they saw it worked and that people loved it, and kept it intact. Which, for me, is reassuring, even when I don´t like the game very much.

          • Blackbird71 says:

            I’d argue that they did not in fact keep it “intact”. Gutting any kind of LAN support removed a core piece of what made the game popular – the game was a huge hit at LAN parties and other group computer events (which were a big thing back in the day, and still are among some). Also, the ability to “spawn” multiplayer copies of the game allowed a group to legitimately play with only one purchased copy, making the game easily accessible among the younger/student crowd (remember, these were the days when CD burners were still new, expensive, and unreliable, and no one had ever heard of bittorrent). Yes, the gameplay was good, and while that is a critical component for any game’s success, it was not solely responsible for the popularity of the original StarCraft.

      • Low-Level DM says:

        I’m not going to get involved in the back-and-forth here, but let me try to give you another perspective.

        I own Starcaft II. I play it, I love it. There’s several different reasons this is true:

        1. The Campaign Mode, which is where I’ve spent the most time with it so far, has an extremely impressive storyline for any game, especially for an RTS. Blizzard’s cinema-craft has been acclaimed for a long time, and they are not only good at making them but good at making them meaningful, and interspersing them with the “missions” you undertake. Every single time you go down onto a planet, you feel like you have a reason to be there, and it’s not just “Go, blow up X^Y Zerg, N^M Protoss, and grab the McGuffinUltraSuper.” The characters feel like actual people, that have actual meaning, and that are really participating in this story that you bear witness to, that you, in a sense, drive. Kerrigan, Raynor, and Mengsk are not the most deeply designed, subtly toned, complicated characters ever to come out of the world of science fiction. But they mean something, and therefore so does their story.

        2. SCII is called an RTS, a Real-Time Strategy game. And I will say that, in my opinion, the game’s design is a brilliantly executed, beautifully engineered example of what a strategy game – any strategy game – should be. Every unit feels unique, has unique applications, and even within the single race that the Campaign Mode allows you access to, and even with the lesser number of availble units and builds the Multiplayer Mode offers for each race, the game supports an immense potential for innovative, intelligent, powerful builds, tactics, and stratagems that actually impact the game. There are no “best builds/units” that will always and every time dominate the battlefield. It’s a game where thinking – and thinking clearly, and well – counts. And that appeals to me, and hopefully to you, if you are interested in the game.

        3. The StarCraft universe is one of the most well-developed, intelligently-constructed, subtly-toned, and coherently executed (Fallout 3, anyone?) worlds that I have ever played in (no, not absolutely the best, and yes, I haven’t played a lot of famous ones, and yes, this is my opinion, and no, don’t beat me up over this). Blizzard is good at lorecraft. They are excellent worldbuilders. They are adept at weaving stories that – while not terribly complex, or deep, or even sometimes very subtle – mean something. And their worlds support those stories. The Zerg, Terrans, and Protoss are all very easily identified as classic sci-fi tropes – the evil, disgusting aliens that have endless numbers, the humans with Big Space Guns, and the hyperadvanced super-race with awesome tech that we want – but they work, and they make sense, and they are wonderfully executed within the game.

        Those are not, by any means, all of the reasons I like the game. And, of course, it has a lot of flaws – including those that tie closely to who owns its piles of money, and why. Activision is not an innocent child of a company, but they have allowed Blizzard (and I will admit that they aren’t, either) to create a masterpiece of a game that is every inch what it was supposed to be.

      • Mari says:

        Wow. I apologize, Shamus. I had no idea I would side-track things this much nor was I intentionally trolling. I was just curious about the game since it came up. Apparently curiosity killed the thread. :-( Sorry.

    • Zeta Kai says:

      Activision is the new Acclaim! Maybe they’ll implode like they did in a few years. We can always hope…

  13. Meredith says:

    It’s always interesting to read stories of people who experienced the dot-com bust first hand. I’m glad you got out of it relatively unscathed and learned a bit about the business. Just think of all the ways you’re using the new improved internet for profit. ;)

    I was just discovering programming, about to graduate high school, and seriously considering a comp sci degree when the bottom fell out of the internet business boom. I stupidly let the panic and the adults in my life talk me out of studying programming and man do I regret it now. What can I say? I was 17 and not a very heavy internet user yet so I really didn’t know enough about the situation.

    As for the lawsuit thing: that’s basically the same mentality that slip and fall artists use against big companies. The theory is that it will cost MegaCorp more to fight the suit than it will to settle for $thousands, so they settle and skip the hassle. Either way, it’s bad for the average consumer/worker. Law suits basically just suck all around.

  14. Steve C says:

    Activision has a corporate history of being assholes. They have a culture of lawsuits, buy outs, and screwing over the little guy. Bobby Kotick wins the biggest asshole contest of course. He’s not a gamer, he’s a corporate raider.

  15. Noble Bear says:

    I feel like theres an unspoken lesson or bit of advice still lurking around here somewhere.

    What should companies in this position do in the wake of such devastation?

    or

    If they could magically turn the clock back, what different steps might they have taken?

    • Shamus says:

      My advice: Character matters. Do NOT go into business with someone who has dealt poorly with others, even if they seem nice and the deal sounds good on paper and Kotick has your team over for a Barbecue and shakes hands with your team and acts like he’ss your buddy. When you are dealing with someone way out of your weight class, the paper is only as good as the character of the guy who hands you the pen. The only time you should even contemplate going into business with an outfit like Activision is when your only alternative is going out of business.

      Bungie just climbed into bed with Activison. It was an idiotic move. Maybe it will come back to haunt them, maybe they’ll be fine. But it’s a stupid risk. They did this right on the heels of the whole melt down with Infinity Ward. It’s like marrying a man who had his previous wife leave him because he fooled around and hit her.

      “Oh, he’s not like that anymore. It will be different with us.”

      For the president of a company with a hundred employees to take this kind of gamble with their jobs and everything they’ve built is unconscionable.

      • Shamus says:

        I should make this a column.

      • Gandaug says:

        This is truth.

        My father is getting his doctorate in Organizational Leadership and everything he has shown me dealing with this says character/relationships matter. It’s really fairly obvious once you look around and notice things.

      • Daemian Lucifer says:

        I dont know the details about their contract,but maybe theyve learned from other and took precautions.When you know someone is a dick,but you need his money,you take precautions not to get screwed in the end.

      • Irridium says:

        It could be possible Bungie signed on before the whole IW buisness, and were just ironing out details. Granted its kind of a long shot, but still a possibility.

        I just really hope this doesn’t end up ruining them.

        • Shamus says:

          Actually, you make a really good point. Deals like this take months to iron out. It’s very expensive. It’s entirely possible the IW stuff happened right n the middle of the proceedings, not before. I should have thought of that.

  16. Gandaug says:

    What I find amusing is how Activision has managed to steal the asshole spotlight from EA. In comparison EA is starting to look pretty swell.

    • SatansBestBuddy says:

      You could almost say they’ve learned from their mistakes, or at the very least learned how to cover them up better than before.

      There’s also the fact that the franchises Activision is dicking over are much larger, and thus any news from them is much more noticeable.

  17. Sekundaari says:

    Right, I have to say this: Shamus, I think the TechCrunch guy on the video resembles the guy on your Escapist avatar/logo a lot. ;)

    Maybe it’s the eyes and the hair. And the suit and cigar, of course.

  18. lazlo says:

    You forgot one thing Shamus: First you get that tiny salary and $OMGillion in stock… then you wait a year before you’re allowed to sell it. Then April rolls around, and the IRS informs you that since you got $OMGillion in stock, you owe them their cut. So you say “sure, I’ll give you *half* of my stock, and then we’ll *both* be able to enjoy a Whopper with Cheese.” And they say “Oh no no, we don’t want a cut of that stock *now*, it’s worthless. We want our percentage of what it was worth when you *got* it.” And you say “But I’ve been working for pennies and the only thing I have to show for it is a huge debt load and some worthless stock.” And then you get to see the compassionate side of the IRS (if you are really fast and have a microscope handy)

    Fortunately, this didn’t happen to me, but more by luck than anything else.

    I do get a perverse sense of joy when it comes to DirecTV mostly because they actually have sales people who call me on a regular basis. So I actually get a chance to vent to them, which is wonderful. I get to tell their salespeople that I’ll be glad to consider the relative benefits of their service vs. their competitors once they’ve offered to pay the legal and court costs of everyone they sued and lost on, plus offer to re-open all of the cases that they settled with the understanding that they would pay court costs if they lost in an actual trial. But I at least try and use it as an opportunity to exercise my persuasiveness and at least convince one telemarketer to re-evaluate his or her life and find something more honorable to do than continue working for such an evil empire…

  19. Slothful says:

    From a certain standpoint, I just don’t get the idea of stock. From everything I’ve heard, it sounds like the only reason to own stock is so that you can sell it later at a higher price, and the only reason a company sells its stock in the first place is to make buttloads of money for the owner of the company with little to no work involved.

    I know that in theory owning stock is supposed to give you a little control in what that company does, but in practice that only matters when you have a very large amount of stock, and the system only exists to allow companies to buy other companies so that they can fuse into big horrible baby-eating conglomerates. The sort of conglomerates that Theodore Roosevelt would’ve spent all his time trying to break up when he wasn’t busy killing things.

    Also, the bigger corporations get, the more nonsensical the relationship between their actions and their profits becomes. You think Activision’s the worst? You’ve seen NOTHING.

    • Pickly says:

      I’m guessing someone might be able to explain much better than this, but in theory stocks are also useful for dividends. also, in theory, (from what I understand) if a stock were cheap enough compared to the company’s profitability and value, someone else could come along and buy the stock up, than either take the profits, or sell the company, (so although a single person won’t have much of an effect, it would add up with a large enough number of shares, and these provide the value.)

      Of course, that doesn’t prevent prices from still doing all sorts of odd things thanks to hype, randomness, etc.

    • Deoxy says:

      From everything I’ve heard, it sounds like the only reason to own stock is so that you can sell it later at a higher price

      For most stock, most of the time, this is basically true. Which is why I think the stock market is psychotic – as long as everyone BELIEVES it works, it will work, but once a critical mass no longer believes, it will fail. Spectacularly.

      Now, it got this way slowly – once upon a time, the reason to own stock was to receive dividends. Some companies still do this, but even most of those don’t pay dividends that compare to the average growth of the stock market (that is, how much more people will pay for stocks than they used to).

      On a small scale, it works. You and I start a business, we split ownership 50/50, so we essentially issue 2 shares of stock – one for you, one for me. If you want to sell half of your share, then I have (essentially) 4 shares, you have 1, and the other person that you sold to has one. Real shares can’t be created quite so easily, of course, but that’s the concept – split ownership.

      I used to feel that it was all a giant ponzi scheme, pure speculation of the worst kind… but really, there is an actual floor value on a stock: the net worth of the company, that is, actual assets vs. debts. Unfortunately, A) that value is almost always WAY below what the stock is selling for (that is, it is MOSTLY speculation), and B) the only way you get that much value out is if the company liquidates and distributes the results, going out of business in the process. Even further unfortunately (for B) is that such things basically only happen if B1) the net value of the company is negative, and it dies in bankruptcy, in which case the stockholders, as “owners” get whatever is left after all the creditors (that is, ZILCH), or B2) the value of the stock falls far enough below the net value of the company that someone buys a controlling interest and liquidates*, but then, that only happens if the value falls very, very far, meaning you still lose most of your money.

      *This happened in the 80s as a way to raid the pension fund of older companies, since liquidating freed up the money from the pension fund – basically, the guys doing these deals were stealing the equivalent of the life savings of a bunch of former employees of said companies. Nice, eh? This is what got everyone to shift to 401(k)s, where you actually own your share of the retirement stuff instead of leaving it in the pension fund.

  20. Atarlost says:

    I think there’s actually a pretty simple solution:

    Prohibit the enforcement of nondisclosure agreements on anyone you’re not currently employing. That way if you can’t afford the lawyers you can get your punitive damages in the court of public opinion. You may not see a cent, but anyone who screws over enough little guys will wind up like BP. CEOs will resign in disgrace and the replacement will get told to turn around the public perception at any cost, which without nondisclosure agreements requires treating employees and business partners fairly.

  21. BeamSplashX says:

    Finding a cache of money isn’t dumb luck, Shamus. If you realize the importance of Luck and raise it before your adventure, you deserve that crate full of bottle caps by the overturned Nuka-Cola truck.

    I’m pretty sure this happened to me in real life. Ninety-five percent.

  22. This sort of thing is a classic example of one-stage economic thinking by the big publishers, because they can’t SEE the ultimate result of what they’re doing when they engage in this kind of asshattery–the really valuable people who might otherwise go into the games industry and form studios to make deals (and money) with Activision . . . don’t. And all that gets produced is tepid games by naive idiots who then get taken to the cleaners by the big publishers. But almost everyone in the world is engaged in some kind of shooting themself in the foot of this stripe.

    Opportunity costs are still costs, people.

  23. Deoxy says:

    WOW, tl;dr.

    But, I do have a serious point for you, Shamus.

    overlawyered.com

    Go there. Our system IS flawed, as you said, but there really ARE some very common sense and well-tested things that would help A LOT. In fact, we used to use some of them, and they were a LOT better than what we have now.

    Easiest, best fix for many of the problems (including what you mentioned in the article): LOSER PAYS

    And before you say that screws people who sue in good faith, several other countries use it, and what usually develops is some kind of insurance rider (often on home insurance) where the insurance company looks at your case, agrees that it is in good faith, and agrees to cover the costs should you lose. There are a lot fewer lawsuits in such countries, since you basically can’t just run people out of money by dragging the case out AND, even if you try, you are probably just screwing yourself in the process.

    Knowledge is power… and rage, since, in this case, the solution is so obvious, easy, and well-tested. I’ve been a lot of places in the world, and, for most things, saying “other countries do it” is pretty much my way of INSULTING something, but here, well, the US is doing something DUMB. :-/

    (Go me! I avoided a political statement after that. And it was REALLY hard not to say…)

    • Deoxy says:

      OK, now I’ve had a chance to go read (and comment on) much of the rest of this comment thread… and I’m still glad I posted this at the bottom. Hope it’s useful to people.

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