Rec Room, Inc. (Rec Room), developer of the eponymous Massive Multiplayer Online (MMO) video game Rec Room, has sued one of its players in a Washington federal court for violations of its terms of service arising from the posting of discriminatory content on the Rec Room platform and the development and distribution of “hack” software that provides an unfair competitive advantage to Rec Room players. The lawsuit also claims that the defendant’s use and sale of his hack software to other players infringes on Rec Room’s copyrights.

What Is the Case About?

Rec Room is a free-to-play video game which reported 29 million active users in 2022. Players can utilize Rec Room’s in-game tools to create custom experiences and mini-games to engage other players on the platform. Players can charge a fee, payable in Rec Room’s in-game currency (Tokens), for access to created content, and Tokens can be exchanged for real-world currency. Because Rec Room’s in-game experience is largely curated by the players themselves, Rec Room employs a team of moderators and technological measures to ensure player-created content and in-game activities abide by its code of conduct. Each player agrees to comply with Rec Room’s code of conduct by accepting Rec Room’s terms of service when Rec Room is downloaded for use.

Rec Room alleges that the defendant, a teenage Rec Room player, has repeatedly violated its code of conduct for several years with actions that include:

• developing and selling hack software to other Rec Room players which is used to provide unfair advantages during in-game competitions;
• using hack software to display a Nazi flag in a virtual gathering space for players on Rec Room’s platform;
• illicitly accessing the Rec Room accounts of unsuspecting players and depleting their in-game currency and created content; and
• circumventing Rec Room’s attempts to ban the defendant from the Rec Room platform by creating dozens of new playeraccounts and obscuring personal information which would otherwise reveal the defendant’s identity.

Rec Room claims that the defendant’s actions constitute a breach of the terms of service that each Rec Room player agrees to when they download the game, and also claims the defendant committed fraud by knowingly accepting the terms of service with each new account with no intent of abiding by such terms. By developing and selling his hack software to other players, Rec Room also claims the defendant has committed copyright infringement by exploiting an unauthorized derivative work of Rec Room’s copyrights. Rec Room seeks statutory damages under the Digital Millennium Copyright Act equal to $2,500 for each copy of hack software sold to a third party, as well as a permanent injunction preventing the defendant from playing Rec Room and developing or distributing hack software that can be utilized in the game.

Why Is This Case Important?

MMO video game platforms are becoming increasingly popular with gamers as technological advances enhance server capacities and player-driven creativity, but this has also led to an influx of bad actors on such platforms whose conduct negatively affects the gaming experience. A ruling in favor of Rec Room could provide developers with a legal path for protection against individuals whose actions circumvent a MMO platform’s technological infrastructure or player conduct policy.

Please do not hesitate to contact any member of Wilson Sonsini's internet strategy and litigation practice. For more information about gaming companies generally, please contact any attorney of the firm’s electronic gaming practice and learn more about the practice by reading The Scramble.

Daniel Xo contributed to this Wilson Sonsini Alert.