Mortal Kombat at the Supreme Court

George Rose hopes to have a front row seat in the nation's capital on Election Day. The executive vice-president of Activision Blizzard (ATVI), the world's largest independent game developer, doesn't have politics on his mind. He'll be watching the Supreme Court oral argument on Nov. 2 in a case that could cost his company billions.

The high court, in Schwarzenegger v. Entertainment Merchants Association and Entertainment Software Association, is weighing whether a 2005 California law banning the sale of violent video games to minors violates the First Amendment right to free speech. (The law has never been enforced due to legal challenges.) If the high court upholds the California ban, video game companies would be required to attach a 2-inch by 2-inch white label marked "18" on the front of a boxed game deemed too violent for minors. Retailers that violate the ban would be subject to fines of $1,000.

Rose, Activision's chief public policy officer, and other critics argue that retailers and the video game industry already have voluntary restrictions on the sale of violent games to young consumers. Any new law, they say, would be unenforceable since video gamers increasingly buy games online or through mobile devices. "I'm not going to sit here and say protecting kids is a bad thing, but the way they're approaching it is not a smart thing to do," says Rose. "This case is the hottest ticket in town right now."

At issue is whether to extend a 1968 ruling in Ginsberg v. New York, in which the Supreme Court said the First Amendment doesn't protect the right to sell sexually explicit materials to minors. If the court applies that legal interpretation to violent video game content by upholding the California law, the implications for the $10.5 billion U.S. video game industry—and a number of others—could be considerable.

Industry tracker NPD Group says 24 percent of U.S. video game sales this year, or $2.5 billion worth, were considered violent enough to carry a voluntary M, for mature, rating, up from 17 percent last year. Business groups argue that upholding the California law could lead to restrictions on violent content in books, movies, even newspapers. Publishers, entertainment media, civil rights organizations, retailers, and 10 state attorneys general have lined up against the law.

Eleven other state attorneys general have filed briefs in support of the law, joining pundits like Eagle Forum President Phyllis Schlafly. "The video game industry is trying to wrap its evil products in the First Amendment," the conservative columnist wrote on Sept. 10 in an online column. California State Senator Leland Yee, the child psychologist who sponsored the law, argues that video games like Grand Theft Auto: Vice City; Postal 2; Duke Nukem Forever; and Activision's billion-dollar Call of Duty series glorify death and dismemberment.

In Postal 2, which is banned in Australia and several other countries, players can direct an animated character to urinate on a dead body, triggering the comment, "Now the flowers will grow." Yee says interactive games influence children more than any other medium. "You chop someone's head off, you set someone on fire, you're pulling a trigger again and again," he says.

The 9th Circuit Court of Appeals last year ruled that even violent video games deserve free-speech protections. When the Supreme Court peeled back the First Amendment protections in its 1968 ruling, the opinion said, it limited its actions only to obscenity, and even then only to sexual content. Federal and state courts have struck down laws similar to California's that would regulate violent games in eight other states.

The companies in 1994 established an independent rating agency, the Entertainment Software Rating Board (ESRB), with six categories. Buyers must be 18 years old to buy games rated M. They often include the most extreme examples of sexual content, violence, language, and alcohol and tobacco use. When an M game is scanned at Best Buy (BBY), Wal-Mart (WMT), and other retailers in the ESRB Retail Council, a register alert is supposed to trigger an ID check.

The California law's sponsors complain that the pledges are voluntary and not enforceable. They propose an accompanying state law that the industry is also fighting that would require retailers to segregate M-rated games from other games intended for children, and also require retailers to display signs explaining the rating system.

Video game developers argue that even if the Supreme Court reverses lower court rulings, there's no way to stop minors from playing violent video games. "Selling this stuff to children is not something we want to do. It's bad business," Rose says. "The way to approach this is through education and parental involvement, not laws."

The bottom line: The Supreme Court is weighing whether to uphold a California law banning sales of violent video games to minors.

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