In brief

Bungie, the US-based video game giant and creator of the 'Destiny' series, has been awarded US$4.3 million in damages in mandatory arbitration arising out of its 2021 claim against a creator of downloadable cheat software.

AimJunkies – a subsidiary of Phoenix Digital Group and purveyor of some very annoying video game hacks – must now pay Bungie $2,500 for each of its 102 violations of the US Digital Millennium Copyright Act (DMCA), plus further fines of US$3.4 million for selling its cheats.

Although Bungie’s claim against AimJunkies was not its first against a commercial cheat-maker, it was the first to make it all the way to a decision without settlement and the first instance of statutory damages breach of the DMCA. Bungie was successful on all three 'limbs' of its claim – breaches of copyright law, breaches of consumer law and breaches of Bungie’s video game terms and conditions.

The case sheds light on developers’ enforcement priorities and their renewed approach to IP protection in the era of 'video games-as-a-service' (GaaS). The video game industry hopes the decision will spur other mid-weight developers to take action against cheat makers globally.

Background

Who are the players?

Bungie Inc, a recently-acquired subsidiary of Sony Entertainment, has been a videogame heavyweight since its critically-acclaimed 2001 release of Halo: Combat Evolved. Having since developed three Halo sequels before selling off the Halo franchise to former-parent company Microsoft, the former Microsoft subsidiary has shifted its focus to its GaaS online-only multiplayer franchise, Destiny.

Destiny 2 now boasts around 43 million registered players – second only to World of Warcraft.

AimJunkies and their parent company, Phoenix Digital Group, are a fairly secretive software development firm with registered offices in Kingston, Jamaica and studios (apparently) somewhere in Eastern Europe. AimJunkies produce cheats for video games and sell them to players on a subscription basis. The subscription model allows AimJunkies to update their cheats in response to any anti-cheat measures implemented by a developer.

How did we get here?

Cheating in video games has been around for as long as… well… video games.

Original cheats were fairly rudimentary, comprising little more than hard resetting a console at a certain time, bending a few chips in a game cartridge or altering a save file. These cheats were also harmless as, before the online gaming boom, they had almost no impact on the broader gaming community.

For developers like Bungie, while there may have been some infringement of their intellectual property or breach of their software terms, they historically had no real reason to take action against cheaters or cheat makers – sure, cheating is bad, but what was the harm? Even when cheats became commercially available, taking legal action against cheat makers was an expensive pastime, and the losses suffered by the developer were negligible.

However, as video games became more complex and the focus shifted to online, multiplayer offerings (like the Destiny series), cheating became a bigger problem. Cheats nowadays are more intricate and impact a broader customer base – potentially hundreds or thousands of real-life players at a time. They can also be accessed by anyone with the internet – sold in 'easy to use' formats by firms like AimJunkies.

Developers vs Cheat Makers

Video game developers are now starting to recognise the incentive to develop, improve and protect their games from cheat makers. Major developers have invested heavily in advanced anti-cheat measures for their GaaS games. However, as cheat makers like AimJunkies offer their products on a SaaS basis as well, they are just as responsive and reactive to these protections.

So, backed by the continued revenue of a genuine fanbase and support from their heavyweight parent organisations, the 'big hitters' of video game development have (quasi-officially) united in taking legal action against cheat makers:

• Bungie commenced another claim against cheat creator Veterancheats, which settled in late 2022 for US$13.5 million.
• Tencent Games collaborated with Chinese police to shut down Chicken Drumstick - potentially the world’s biggest ever video-game-cheat operation, seizing US$46m of assets, including several luxury cars.
• Call of Duty publisher Activision applied to Californian courts to shut down German cheat maker EngineOwning.
• Bungie and Ubisoft commenced joint action in 2021 against UK-based cheat maker Ring-1, as well as the US-based individual members of the organisation.

Key lessons

Bungie’s action against AimJunkies (and the recent flurry of developer action against cheat makers generally) has taught us a few key lessons on IP protection in the video game space:

• Taking action now makes 'cents': Recent decisions in favour of developers, such as that in the Bungie v AimJunkies case, show that legal action is now a commercially viable option for video game developers and GaaS providers.

Bungie general counsel Don McGowan said in a statement issued to Polygon -

“We’ve made our position against cheaters and illegal cheat makers abundantly clear in publicly-accessible court filings and our in-game actions. We will continue to take action against bad actors who damage the player experience for the rest of the community.”

• Three-pronged attack: WIPO’s treaties on Copyright and Performances and Phonograms, which have been ratified into the laws of its member states (like the DMCA in the US and the Copyright Act in Australia), give developers a number of useful avenues for pursuing cheat makers. From the claims we’ve seen so far, developers are using a three-pronged attack:
  • claims for breaches of copyright under laws like the DMCA or, in Australia, the Copyright Act
  • claims for breaches of a video game’s terms and conditions, and
  • claims that a cheat maker has trafficked or dealt with a security circumvention device, an offence under the DMCA (in the US) and the Copyright Act (in Australia).

• A pat on the back for the lawmakers: Statutory damage regimes for IP breaches like the one contained in the DMCA in the US allow developers to more easily assess the cost-benefit of any potential claim against a cheat maker. By removing much of the costly and time-consuming hurdle of assessing actual losses under the common law, lawmakers have successfully coaxed developers into action. While there is much debate on the effectiveness of the statutory damages regime for copyright infringement in the US, the recent positive outcomes for Bungie and other developers must start a conversation about the best way to protect copyright in the digital age.

Read the full Bungie Inc. v AimJunkies decision here.