June 19, 2025 • 41 mins
In this episode, lawyer Richard Hoeg explores Nintendo's recent user agreement changes, focusing on anti-piracy measures and new prohibitions. He provides a legal analysis of user rights, legal language, and implications for parental consent and breaches. The episode also touches on public perception, copyright issues, DMCA, and potential penalties. Richard examines patent law through the Impression vs. Lexmark case and compares ownership rights between the Nintendo Switch and other systems. He underscores the importance of understanding user agreements and the need for EULA awareness, concluding with final thoughts.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:14):
Hello, and welcome to Virtual Legality.
I'm your host, Richard Hoag, managing member ofthe Hoag Law business law firm of Northville,
Michigan.
And that means as a business law firm that Idraft end user license agreements, software
licenses, and website terms of serviceregularly as a day job.
And I have a lot of thoughts about this storythat you can see on your screen from game file
(00:34):
of Steven Totillo and what it means forNintendo owners or what they think are owners
of the new Switch two system in particular.
Now this article reads as a headline, Nintendowarns it may brick Switch systems, meaning it
can make them inoperable, whose users bypass,modify, decrypt, defeat, tamper with their
games and services.
(00:55):
And this was the first time I saw this storydiscussed.
It says it was 05/08/2025.
It also says this is a paid article, and Iwanna disclaim that Steven Totillo is one of my
favorite writers working in the video gamespace right now.
And so I do pay for his substack, but I wannadisclaim that because this is paid content.
He says he received an email at 11:39PM thathad the subject line updates to Nintendo
(01:18):
account user agreement and Nintendo privacypolicy.
And if you're in any kind of video gaming orany kind of other software customer, you know
that you get these emails from time to time.
Because the licenses that you agree to when youuse software all have within them a provision
that says, we as the software provider canchange these terms of service at any time.
But when they do change them, they give you anotice like the one listed in this email, and
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he says in response to that email, it's a goodthing I looked.
Most of the changes, just over a 100 edits bymy account, were made to the Nintendo account
user agreement, a digital document that peopleclick on in order to use online connected
Nintendo services.
That's another aspect of this story that we'regonna discuss a little bit further on in this
video, But an important thing to note here isthat most of these companies, Nintendo,
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Microsoft, Sony, anybody else that you might beplaying video games through, have a number of
different interlocked nested togetheragreements.
Some of which are for the platform, some ofwhich are for the hardware operating system,
some of which are for the content or accountservices as we see described here.
Now Nintendo actually tries to flatten thatecosystem of documents down to mostly one that
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you have to interact with as a customer, andthat has a lot of benefits.
You don't have to read a number of differentdocuments, but it also has a lot of downsides
because there's a lot of conflated ideas in theNintendo document that may or may not apply in
the very nefarious ways that some are readinginto it.
So with that said, I wanna highlight whatSteven Totillo identifies as one of the biggest
items here.
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The most strongly worded change from Nintendoamid their swath of updates is a major
expansion of the company's long standingwarning to the gamers it seems most frustrated
with these days.
Those who hack or modify its console and games,run emulators, and in Nintendo's assessment,
foment piracy.
Nintendo's old user agreement, effective sinceApril 2021, said, you are not allowed to lease,
(03:10):
rent, sublicense, publish, copy, modify, adapt,translate, reverse engineer, decompile, or
disassemble all or any portion of the Nintendoaccount services without Nintendo's written
consent or unless otherwise expressly permittedby applicable law.
Here's the new, way more intense versioncomplete with the potential punishment of your
Switch being bricked by Nintendo.
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Without limitation, you agree that you may notpublish, copy, modify, reverse, engineer,
lease, rent, decompile, disassemble,distribute, offer for sale, or create
derivative works of any portion of the Nintendoaccount services.
Now one thing I do note as a lawyer here isthat there are a number of ways to write
provisions like this, and the first thing thatI see here is that the new lawyer working on
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this version of the license agreement isclearly the kind of lawyer that likes to list
out every possible thing that they can thinkof.
If you've never worked with a lawyer before,you should know that lawyers, especially
business lawyers, are primarily in the businessof trying to figure out ways in which the
company that they are representing could beharmed in the future by not including something
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in the contract in front of them.
So a type of lawyer looks at this and says,it's better to pack something and not need it
than need it and not pack it.
Imagining a future lawsuit or court that wouldsay, hey, you know how to write these words on
the page, and you only said decompile anddisassemble.
You didn't say anything about distributing oroffering for sale or creating derivative works,
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etcetera.
And so various lawyers in corporations, workingfor corporations in outside firm capacities
like I do at Hoag Law or elsewise will havedifferent kind of risk aversion levels and know
their clients and what they want in theirdocuments a little bit better.
But it does mean that language can change thatreally doesn't change the substance of the
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provision.
So here we've got a few new entries.
I've highlighted them in yellow, but it doesn'tactually change much of what we're talking
about here.
Nintendo always reserved all the rightsafforded to them under copyright law, which
includes the right to prevent derivative works,includes the right to prevent distribution they
don't like, etcetera, etcetera.
They're just listing them out more specificallyhere because the lawyer, whoever's in the room
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here drafting this version of the document,likes to list things out more specifically.
Next, we see a reference to bypassing,modifying, decrypting, defeating, tampering
with, or otherwise circumventing, keep a noteon that word circumvent, any of the functions
or protections of the Nintendo accountservices, including through the use of any
hardware or software that would cause theNintendo account services to operate other than
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in accordance with its documentation andintended use.
So this is aimed at what Steven Totilloidentified earlier, which is things that are
gonna break the way a Nintendo device functionsthrough a reference to the account services
specifically.
The next item is you can't obtain, install, oruse any unauthorized copies of Nintendo account
services.
The services specifically, but that doesinclude video games in the concept, or exploit
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the Nintendo account services in any mannerother than to use them in accordance with the
applicable documentation and intended use ineach case.
Now that's a lot of words.
Right?
That's a lot of lawyer drafting there.
But ultimately, in my view, that is almostentirely covered by what was already in the
Nintendo old user agreement in April of twentytwenty one.
Now that said, they did add a bit of languagehere that I think has gotten everybody a little
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concerned about what they're purchasing withthe Nintendo Switch, and that is that Nintendo
added language that said, you acknowledge thatif you fail to comply with the foregoing
restrictions, Nintendo may render the Nintendoaccount services and or the applicable Nintendo
device permanently unusable in whole or inpart.
Now this is one of those areas where I thinkNintendo trying to conflate things like the
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operating system license with the video gamelicense and the account services concept is a
thing that makes it a little bit harder toread, not just for the layman, not just for
anybody that's not been to law school that justbought a Nintendo Switch, but also for the
lawyers.
Because the best reading of this to me, whatNintendo seems to be aimed at here is that we
can turn off your ability to use the Nintendoaccount services, what you purchased through
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the eShop, and those kinds of things, and notnecessarily brick your console, but it's not
clear here, And bricking here would mean thedisabling of the operating system.
Understanding that when you purchase a Switchtwo or any other piece of technology in 2025,
what you are most likely purchasing is a bit ofhardware in the real world, the chips, the
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actual box that you are putting under your TV,the dock that you're putting it in in the case
of a Switch, and the software that actuallyruns that hardware.
Right?
If Nintendo bricks it, it doesn't mean thatthey run into your house and steal your Switch.
It just means that they steal the functionalityof the Switch, and that's the same effect for
you and me.
But it does mean that they are talking aboutsoftware when they're talking about bricking
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something, not lighting your system on fire.
So when we talk about these things, it'simportant to note here that we're talking about
a combined system of hardware and softwareacting together.
And what Nintendo is basically claimingDominion over is its software.
That because you have to connect online to usethe Nintendo account services anyway and
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probably to operate your Switch in most casesthat you're gonna operate it on in 2025.
Nintendo reserves the right to say if you dovery bad things that we don't like, we can say
your operating system doesn't work, which meansyour Switch doesn't work.
That's not great.
I'm not gonna sit here and tell you that youshould be happy about these technology
companies having the ability to do that, but Iwanna get into this more fulsomely so that we
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can better understand what the currentecosystem of video game devices is in any event
and what this language actually means.
The other thing I would add from a purelylawyer to lawyer term of art here is that I
don't think you acknowledge is actually theright way to describe this because you can
acknowledge all sorts of things that aren'ttrue.
So Nintendo saying, you acknowledge that if youfail to comply, we can brick your system,
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maybe, is probably not as useful as a bit oflanguage that I like to put in my agreements,
which is user acknowledges and agrees, or youacknowledge and agree that we can do these
things.
That gives the party the right to actually dothose things.
You acknowledge that we can do this doesn'tactually put that legal right in play.
That's angels on the head of a pin.
That's very legal easy, so don't worry aboutthat too much.
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But I did wanna state that this language is notlanguage that I love here, and that's because
it can't itself create a new right outside ofthe law just with this provision even though
contracts in general are putting forth rightsand obligations that either side has.
And you could write this in a way that maybe isa little bit more protective of Nintendo if
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they decided to do that in the future.
But with that said, I did wanna point out thatSteven Totillo, who I again think is an
excellent journalist in this space, doesn'tjust say, wow.
That's a horrible thing that Nintendo can do.
It says not he says not that surprising, ofcourse.
We're just seeing Nintendo's recent legalenergy funneled into its user agreement.
So he's taking this with the kind of soberapproach that I expect from him at this point
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in time saying, okay.
There's a lot of legalese here, and it doesn'tlook great, and we should note it.
I'm writing an article about it after all, butit maybe isn't the end of the world.
But not everybody takes that exact tack, andwe'll see that when we get to the response
section of this video.
The other thing I wanted to point out islooking at this document, there's a lot going
on here that maybe is not something that peopleare talking about as much as they maybe should
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be.
One thing Steven Tutillo does note in hisarticle is that they have added this concept in
at the beginning of their document that says,your parent or legal guardian agrees to the
Nintendo account user agreement if you're achild and you otherwise click through to use
your Nintendo Switch to play Mario Kart world.
And one thing I note here as a top line item isthat this does appear to be Nintendo being very
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aggressive in their documentation because inmost cases, this language isn't gonna work.
Right?
And there's nothing preventing anybody in anyspace, in any user license agreement, in any
other context from putting things in thecontract that a court is not gonna uphold.
It's maybe not a great idea, but you're tryingto signal to people of what you're trying to
achieve.
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And this case is one where Nintendo got burnedby the fact that kids had agreed to certain
terms.
It when with respect to the Joy Cons, Ibelieve, on the Switch one system.
And some court said, well, that's not theadults that agreed to those terms, those
limitations on the ability to sue, forinstance.
And so Nintendo is trying to cover that bysaying, hey, kids, don't sign this if you're
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under age 18, but if you do, your parents orlegal guardians are on the hook.
That probably doesn't work in contract lawbecause you can't just grab someone else that's
not a party and say you're now a party to thisdocument.
Things get a little bit confusing with respectto guardians and kids because you do have
certain responsibilities as a parent orguardian for the actions of your children in
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The United States and in other jurisdictionslaws.
So this is probably a gray area, but it does atleast speak to the fact that Nintendo is trying
to be aggressive, doesn't necessarily carewhether or not this is fully enforceable as
much as it cares about signaling that it wantsit to be read this way, and that if you are a
parent or legal guardian, you should beconcerned and you should be wary of what your
child is doing so that we don't have to havethis fight in court again in the future.
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Now importantly, this document, as misterTortillo said, says it governs your use of the
Nintendo account services through your Nintendoaccount.
And in definitions, it establishes the Nintendoaccount services including, for example, video
games as well as any other Nintendo productsthat require the use of a Nintendo account are
all included in this definition.
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So they're grabbing things you buy from theeShop.
They're grabbing your Switch and your Switchtwo when they're discussing what they can do
under this license.
You acknowledge again that if you fail tocomply with the foregoing restrictions,
Nintendo may render the Nintendo accountservices and or the applicable Nintendo device
permanently unusable in whole or in part.
Now I think in all likelihood, that's best readto mean that we'll shut down your access to the
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Nintendo online services, the eShop, and whathave you rather than bricking the whole system
because that would have all sorts of publicrelations ramifications that Nintendo probably
doesn't want at this point in time, but I can'tguarantee that.
Nobody can really guarantee that for you untilNintendo decides to do anything with this
language.
But, again, based on all the other inclusions,including what we just talked about at the top
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and the additional language in this section,this appears to be a document written by a
lawyer that's trying to describe every possiblething that could happen in the future and wants
Nintendo to have the armament that it thinksthat they would need in the case that something
like this happened even if they didn't intendto use it.
Right?
One thing that other people should note aboutthese documents, there's a lot of landmines in
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these things.
There's a lot of things that companiesotherwise reserve the right to do that in all
likelihood they wouldn't want to do because itwould have all those negative public relations
ramifications.
It wouldn't be a great market idea to do verybad thing x, y, or z, but they have them in
these documents because some lawyer somewheresaid, you're gonna regret it if you don't have
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this bit of language somewhere in the future.
And the people in the room said, okay.
We'll go with that.
That's always a push and pull with businessesand lawyers.
Lawyers always are looking for every possiblebad thing that could happen and saying, you
should put this language in or else you'regonna get burned in the future.
Lawyers develop that kind of muscle memorybecause they're worried about being sued for
malpractice for the company flipping around onthem in the future and saying you never told us
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this could have happened, and your failure todo so is malpractice and all these various
things that are bad things about the way thatthis whole process works.
But that's how this language gets in there, andI don't believe there's any strong intent by
Nintendo to actually start bricking systems outthere in the market because I can imagine that
would have a very negative ramification on theway they actually operate their service.
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That said, there's a bit more in here that ismostly the same as it was in the earlier
version of this document, but is important forunderstanding what's happening here.
Breach and termination of the agreement,section 13.
Nintendo may terminate this agreement orsuspend your access to any or all Nintendo
account services in our sole discretion andwithout prior notice to you if you violate this
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agreement.
Now important to note here is that this doesn'trequire a separate lawsuit.
Right?
The only people that are deciding whether youviolated this agreement for this provision to
take place for Nintendo to have these rights isNintendo itself.
And this is a way that people should beconcerned about end user license agreements in
general, which is to say, we've got all sortsof court protections and things that I can talk
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about in virtual legality or elsewise that talkabout companies that have to go through a
process before they can do very bad thing toyou.
Contracts are different.
Contracts, you're agreeing to the bounds ofwhat each party can do in any given
circumstances.
Here, it says Nintendo can do these things ifyou violate this agreement, but doesn't say if
a court finds that you violated this agreement.
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It just says if you violate this agreement.
And by its terms, that means if we at Nintendodecide that you violated the agreement.
Or as they say further on, if we have areasonable belief that such a violation has or
will occur, we just think you're a bad guy andwe think you're gonna steal our stuff.
Or as we otherwise determine to be reasonablynecessary for legal, technical, or commercial
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reasons.
Right?
Not legal reasons.
If we think that it's a bad idea commerciallyfor you to have access to your Switch account,
then we can cut it off.
And that's worth noting.
One of the reasons I made virtual reality inthe first place was for people to take better
note of what's in the contracts that they'resigning so that they can understand what the
playing field is in the future on any and allthings related to video gaming or otherwise
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things that they are interested in.
Now to some extent, people read what they wannaread and they see the parade of horribles and
say all these corporations are evil, etcetera.
But what I wanna point out is that these thingsare baked in, and I want people to be aware of
what they're signing so that they can makebetter purchasing decisions on what they want
to enter into and what they don't.
It's a big amount of trust that these companiesdemand.
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When I sit here in virtual reality and saythey're unlikely to use these for any of the
very bad reasons, some companies will.
And they will develop a reputation that says, Idon't wanna enter into a user license agreement
with them for those reasons.
But it's important to note these things becausethis is the kind of language that leads to the
provision up above that says, you acknowledgethat we can brick your system.
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So that's the state of play here.
I did also pull up the earlier document just topoint out that this is an area where Nintendo
is changing things a little bit.
You'll see that they elevated things that theycare about in this earlier version in respect
of individual arbitration.
That's again another lawyer thing that you doin a license agreement is to elevate the stuff
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that you really wanna make sure is enforceablebecause some courts will look at a license
agreement like this and say if it's in themiddle somewhere and it's important, then we're
not gonna necessarily hold the other party toit because they didn't have an ability to
negotiate this contract, and they didn't knowwhat they were signing away.
This is the you can't put in you've sold yourfirstborn child in the middle of the document.
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The court's not gonna enforce that anyway, butit's certainly not gonna enforce it if you
don't highlight that that's actually in thedocument itself because nobody really expects
the normal consumer to go through every word ofthese things.
And that's its own problem in the law, and wecould certainly talk about that on another
video.
But that's the state of play with respect tothe Nintendo Switch, and then came the
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response.
So here's the IGN article.
Nintendo revises user agreement, and if youbreak it, Nintendo reserves the right to brick
your Switch.
That's IGN's headline.
I think that's mostly a good headline that isidentifying what is being stated here even
though we don't 100% know that Nintendo isclaiming the right to brick the Switch as much
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as it is to cut off your access to the Nintendoservice portal.
We have other headlines.
Who really owns your Switch too?
It's a me, suggests Nintendo, which I thoughtwas amusing, so I highlighted here.
Nintendo can brick your Switch and skirtlawsuits in outrageous end user license
agreement update from hot hardwire.
And I think that is, again, the importantaspect of this.
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This is obviously a headline designed to beincendiary, but, again, the the concern if you
have one with respect to end user licenseagreements on the whole, and certainly this one
if this popped up on your feed or you'reotherwise seeing news items about it, is that
Nintendo doesn't have to go through a court toturn your system off.
Nintendo doesn't have to.
It just has to claim that it sees something atissue with you potentially violating the terms
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of the agreement or becoming a commercialliability to them in some way, and then they
can turn your system access off.
GameSpot had the most incendiary version ofthis, and I thought that this was really not a
great way to put this headline out.
According to Nintendo's end user licenseagreement, you won't actually own your Switch
two, and this has been jumped on in variousplaces on the Internet, and I still see it in
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the last week or two.
And a full disclaimer, I'm a Switch two owner.
I love the Switch two, And so you can take mywords on that with a grain of salt.
I suppose I obviously thought the licenseagreement was fine enough for me to purchase
this particular console.
But GameSpot goes out with news like this.
This gets repeated in various places on theInternet.
And one of the reasons you're seeing this videotoday because I wanna talk to you all about
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what Nintendo has the rights to do and whatthey don't have the rights to do even in the
contract terms they have.
So first and foremost, I wanna point out againthat what you're buying when you buy a Switch
two, when you buy a PlayStation, when you buyan Xbox, when you buy an MRI scanner, you know,
any other piece of technology in the world isthat you are buying a piece of hardware and
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software operating together.
And when we talk about software, the contractsthat were are at issue here, we're talking
primarily about copyright.
So you make code and that operates your system,your hardware, and that code is copyrighted.
It's protected in the nature of what it is as acreative work rather than patented, which is
undoubtedly what is covering the hardware thatNintendo actually sells you in the box when you
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go to the Walmart or the Target or what haveyou.
Copyright protects the software, and copyrightinfringement law is what's going to govern the
way that the end user license agreement is readby a court system.
Now that's important because one of the thingsthat pops in to cover copyright in The United
States is the Digital Millennium Copyright Actor the DMCA, which you see most often
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referenced on the Internet with respect totakedown notices and things to YouTube and the
like.
But it has one important provision that'sreally key to understanding this issue as it
pertains to Nintendo and anything else that youmight buy into in the video game space.
That is the notion that the circumvention ofcopyright protection systems is itself
outlawed.
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Mostly when we talk about copyrightinfringement, we're talking about stealing a
picture of Mario and putting it in your ownwork in some way that Nintendo wouldn't like,
and that's you using their intellectualproperty in a way that's unlicensed, and that's
infringement.
This is something different.
This says no person shall circumvent, and Itold you to put a pin in that word that they
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put into their end user license agreement thistime, a technological measure that effectively
controls access to a work protected under thistitle.
And this provides an entire other avenue forthese companies to try to protect their
software to say, okay.
If we're protecting it through some kind ofhardware or other mechanism, then if you
circumvent that, we have our own independentright of action to sue you for infringement.
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And that's important not just because theycould sue you for infringement, but but because
it establishes in statute that The UnitedStates cares about preventing the circumvention
of technological measures to protectcopyrighted works, which means that when they
put something in here in their end user licenseagreement that says, if you circumvent, we can
turn off your software, then they think thatthey're more likely to succeed in a court case
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that somebody fights.
Right?
When Nintendo hits that Switch, they turn offyour Switch two, somebody sues them.
They say, we can prove that you were trying tocircumvent us, with whatever you were doing
piracy wise, and they believe The United Statescourts will look at this and say, yes.
The congress has said we're concerned aboutthat, so we are going to side with Nintendo.
It's also one of the reasons why the languagein the end user license agreement in other
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jurisdictions that are not under thejurisdiction of the DMCA do not contain the
same language that we're discussing today.
It's not just because the the rules aredifferent and are interpreted differently in
the courts.
It's because they don't have this particularconcept in other jurisdictions, and Nintendo
doesn't know whether the courts would allow forthe enforcement mechanism that they're claiming
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in The United States.
But that's important to understand this entireconcept because when we get further in, we see
that that particular provision allows for civilrights of action, I e, you can sue for damages,
and whatnot, which Nintendo could use in thefuture if they felt so inclined.
It also includes criminal penalties.
If you are seen as someone who is willfully andotherwise violating that particular section,
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you're talking about years in prison, hundredsof thousands of dollars in fines, and that can
be something that evidences, again, that TheUnited States cares enough about this concept
that Nintendo feels that they can say, we canshut down this software, and a court is gonna
back them up at the end of the day.
I can't promise that one way or the other,neither can the lawyer in the room for
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Nintendo.
But if they were to pursue this remedy, theysee there's some piracy, they're gonna shut
down access to the online store or maybe evenbrick the system in its entirety, they are
doing it on the premise that the circumventionof a technological measure to prevent piracy,
to prevent copyright infringement is somethingthat The US cares enough about that a court in
The US is going to backstop their ability to dothese kinds of things.
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Now on the other side of the coin, there arecases relatively recently, this is from 2017,
that talk about companies that try to hard locktheir ecosystem of products and not being
allowed to do so.
This is a patent case that's pretty famous inthe patent world called Impression versus
Lexmarks that talks about toner cartridges.
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Respondent Lexmark International designs,manufactures, and sells toner cartridges to
customers in The United States and abroad.
Companies known as remanufacturers acquireempty Lexmark's toner cartridge, including
return program cartridges from purchases in TheUnited States, refill them with toner, and then
resell them.
Lexmark argues that because it expresslyprohibited reuse and resale of these
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cartridges, Impression Products infringed theLexmark's patents when it refurbished and
resold them.
Impression Products moved to dismiss on thegrounds that Lexmark sales both in The United
States and abroad, exhausted its patent rightsin the cartridges.
So Impression Products was free to refurbishand resell them.
Spoiler alert, the court's gonna side withImpression and say that Lexmark exhausted its
patent when it sold the good into the line ofcommerce and then Impression can take their
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toner cartridges in a different market, refillthem, and sell them against Lexmark.
This is a little bit like an antitrust casethat we might have discussed in virtual
legality before, but it's important to notethat there are kind of threads of court cases
in The United States that are looking a littlebit more askance at the way these companies
operate and take broad rights to preventpotential competition in these spaces in
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context like patent law.
We're not talking about patents again.
We're talking about copyrights in thisparticular instance.
But it is worth noting that if Nintendo were toshut down some switches, then part of what the
argument would be against their ability to doso would be that Nintendo is trying to cut off
competition in some important way.
And certainly, has a history of doing that.
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If you look at the Galoob cases in Game Geniein the past that really gave rise to modern
emulation software law in The United States,Nintendo may be pushing too hard on this
particular question if they were to shut downswitches in regards to potential infringements
even with the DMCA sitting out there.
So I do wanna point out that this is acomplicated point of law even right now in The
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United States with the DMCA sitting out there,and Nintendo knows that.
This is a lawyer saying we wanna have thisprovision, but that is entirely different from
Nintendo itself saying we're gonna execute onthat provision.
So I think there are a lot of reasons tobelieve that Nintendo won't execute on that
provision, that you do own your Switch two forall practical purposes, and that there isn't a
lot to worry about here.
But one of the bigger items that would lead meto that notion is that everybody else has a
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provision like this, folks.
I know GameSpot says you don't really own yourSwitch two, but that's only true to the extent
that you don't own any piece of technology thatuses a software operating system as of 2025.
So let's take a look at the PlayStation Networkterms of service and user agreement to have
that discussion.
First, we note that this agreement that I'vepulled up right now is with respect to access
to the PlayStation Network.
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Again, Nintendo kind of collapses all of itssoftware concepts into that one agreement for
the most part.
Sony doesn't do that.
Sony actually has terms of service for thePlayStation Network where you buy games through
their digital platform interface, and they alsohave a system software license agreement where
when you talk about bricking systems and thingsthat are gonna really scare you, they probably
(28:15):
more rightly belong.
But since the Switch doesn't appear to havethat dividing line, you get everything baked
into the same agreement and you get headlineslike they say they can break your system when
maybe they're claiming that, maybe they're not.
Because when we look at the how PlayStationdescribes these things, this is different
lawyers for different companies.
You see they describe the PlayStation Network,and then if we go a little bit further on, we
(28:36):
get the same language that says it's a licensedconcept.
It's not sold to you.
Every piece of software is licensed.
And then importantly, it says in section 1.6,top line item, first section, breach of these
terms may result in the temporary or permanentsuspension of your console or your account.
They specifically reference your console therein the Sony terms of service.
(28:59):
Now they also talk about suspension rather thanbricking anything or permanently disabling, but
permanent suspension and permanently disablingare not concepts that are different enough
under my eye to say that they're differentconcepts for this purpose.
Now if we scroll a little bit further in thisparticular license agreement, we'll see that
suspension does sound a little bit differentwhen we get there.
(29:23):
But as a top line item, Sony reserves the rightto do very bad things to your PlayStation five
if they determine that you've breached someaspect of this very long license agreement,
including aspects related to community.
Right?
User generated content and how you interactwith the Sony community overall, which we've
covered in virtual reality as a potentialproblem because you shouldn't lose access to
(29:45):
everything that you've spent money on becausesomebody doesn't like a bit of language that
you've used in chat at some point on yourPlayStation.
But that's what this license agreement says.
It says we can suspend you for all these verybad things.
You bear all risk of loss for the things thatyou buy from us.
You may not do any of these bad things that wetalked about with respect to the Switch terms.
(30:05):
You may not reproduce or transfer content.
Use the content for resale, public performance,display, except as stated in this agreement.
You may not create any derivative works, andthat becomes important for these conversations
because when you are on Twitch, when you areotherwise broadcasting on YouTube or wherever
else you're playing your video games and havingpeople watch you, that is in all likelihood
(30:26):
creating a derivative work under the law thatthe various licenses that you've entered into
when you purchased your license to your videogame probably didn't allow for expressly.
Now there are some exceptions to that I'vetalked about in virtual reality before, like
Minecraft has a very broad piece of languagethat says you can absolutely stream this, under
some specific rules.
(30:47):
But for the most part, the baseline rule whenyou buy a video game is that you don't have the
right to put it out there into the world.
You don't have a right to do these variousother things.
That's one of the reasons why you see thingsget struck on Twitch when when you see things
become an issue on YouTube.
The limited license granted herein and all useor access to the content is expressly
(31:07):
conditioned on your compliance with theseagreements terms.
Except for the rights expressly granted herein,Sony, its affiliates, and everybody else that
it's has an interest in reserves all of itsrights.
Upon termination of this agreement, youraccount or license to any content will
immediately cease.
Continuing on a little bit further, again, verylong document here.
(31:30):
Console suspension with or without notice.
We may restrict, suspend, or terminate your PSNaccount and PlayStation device, your console,
or indefinitely restrict, suspend, ordiscontinue your access to or use of certain
PSN content offerings, features, products,services if you violate this agreement.
Again, we can basically make that claim.
Yes.
You can sue us about the reasonability of thatclaim, but that's really gonna be a problem for
(31:53):
you more than us.
With or without notice, we can turn your stuffoff.
If we have a reasonable belief such a violationhas or will occur, again, there's that future
looking thing, we think that you might violatethis agreement in the future.
We have that reasonable belief.
You have to prove it wasn't reasonable in orderto win your rights back.
It's a whole problem for you if you have aPlayStation five, but it looks the very same as
(32:14):
what we are seeing in the Switch documentation.
This has been the Sony documentation for a verylong time now.
Upon termination of your account, you will notreceive a refund for items, value accumulated,
or any unused balance in your wallet except forsome specific rules in specific jurisdictions.
And upon suspension of your PlayStation device,you will not be able to use that console to
(32:35):
access PSN, play any games or game modesrequiring online access, or access any content
purchased from the PlayStation Store.
Now that honestly sounds a little bit lessproblematic than what we see in the broad
language used in the Switch document, but againthat's because Sony separates out its
PlayStation Network account license from itssystem software license.
So if we go and we look at that document, whichwe will right now, we can see some of the more
(32:59):
scary language that you might be concernedabout if you're a Sony PlayStation player.
This agreement applies to any system software,firmware, and Internet browser software and
other application included in your PS fivesystem.
All rights to use system software are grantedby license only, and you are not granted any
ownership rights or interest in systemsoftware.
Now that's normal.
Right?
You don't think that by buying a PlayStationfive, you suddenly have the right to the system
(33:21):
software that's operating that PlayStation fiveinsofar as you could pull it from the
PlayStation five and then sell it to someoneelse.
You don't have that right.
Nobody's really confused about having thatright when you buy a console, but they have to
put it in a license like this one so that it'sclear for the law if it ever came up in court.
Continuing on, if SIE, Sony, determines thatyou have violated this agreement's terms, Sony
(33:44):
may itself or may procure the taking of anyaction to protect its interests such as
disabling access to or use of some or allsystem software.
Now it doesn't say it in as bright line inblack letter here, but if they disable access
to your system software for your system, yoursystem is not gonna work.
That is bricking a system.
This is the same concept as what everybody isworried about with the Switch as what GameSpot
(34:07):
put up and said you don't own your Switch.
I'm saying this so that we understand theecosystem, not that you have to be happy about
what's in the Nintendo license agreement orwhat's in the Sony license agreement.
Just to note that this is happening acrosstechnological devices.
It's not limited to game consoles in anyrespect.
I used as an example earlier Medical devices,this is a big issue with respect to whether or
(34:28):
not the provider of medical devices can turnthose things off if they feel that somebody is
violating the terms of service that they'veentered into to operate that particular device.
And that's obviously more important thanwhether or not you can play the latest Call of
Duty, whether or not the MRI scanner canactually be used on your patients in the
hospital.
But that's where these legal questions getanswered is with really serious, really
important stuff, and they haven't been answeredyet.
(34:50):
So Sony reserves the same right that Nintendonow claims.
Nintendo was already reserving that right intheir earlier terms of service, and yet we do
not see a universe in which PlayStations andSwitches are just being bricked willy nilly
because the companies decide that they don'tlike you.
Why?
Because that's bad business.
They wanna sell you Switches.
They wanna sell you PlayStations.
(35:11):
And because they wanna do those things, theyare unlikely to engage in just crazy bricking
of systems, and you can consider yourself theowner of the hardware that you have purchased
even though there is this right that thesecompanies have established for themselves in
their contracts and are likely to be upheldbecause they have to be able to control their
software and copyright prevents people frominfringing on that software in general.
(35:35):
Now Microsoft is a little bit more confusinghere because Microsoft again is primarily a
software company and they draft their licensesprimarily about their software overall.
So they use a kind of broad umbrella agreementto talk about all the software they might sell
you.
That includes everything from Windows to Xboxoperating software, and you have to kinda dig
through various documents to get to what mightbe of most interest to you, we can see an Xbox
(35:58):
section here that says the Xbox online service,Xbox Game Studio games, application
subscriptions, and content provided byMicrosoft are only for your personal and
noncommercial use.
They're licensed in general.
They're not sold to you, etcetera.
And then the bit of language that's the closestto what we're looking for here, for any device
that can connect to Xbox services like an Xbox,we may automatically check your device for
(36:21):
unauthorized hardware or software that enablescheating or tampering in violation of the code
of conduct or these terms and download Xbox appsoftware updates or configuration changes,
including those that prevent you from accessingthe Xbox services or from using unauthorized
hardware or software that enables cheating ortampering.
Now that probably strikes most of you as alittle bit less controversial than what we were
(36:42):
reading in the Switch license agreement becausethis is only talking about cheating or
tampering.
But from a legal perspective, when you talkabout Microsoft deciding what tampering even
means, that could easily be including theconcept of pirating software and the various
other things that Nintendo now expressly callsout.
And you have to ask yourself whether you prefera bit of language here that probably covers the
(37:04):
same same things that you're concerned aboutbut isn't as clear, or whether you prefer
Nintendo being very brightly worded in whatit's saying it can do and at least having the
fight now before the fight would really be aproblem in the future.
My argument would be that I prefer that kind ofbright line, line in the stand, say what you
mean in these kinds of provisions.
(37:25):
Microsoft having this bit of language heresuggests to me as a lawyer the very same rights
being claimed as what Nintendo's claiming andwhat Sony's claiming, but reasonable minds can
differ even on that score.
The point is that this is basically the samekind of license concept that you see across all
systems, all pieces of technology that youwould buy in 2025.
(37:47):
You don't have to like that.
You can think that there are laws that shouldbe put into place that maybe prevent this or
require you to go to court to enforce thesevarious things.
I would be open to that conversation.
Certainly, when we talk about bricking systems,when we talk about cutting off system software,
that sounds a lot like what we would talk aboutin legal parlance as self help.
Right?
If you've sold something to somebody and theydidn't pay what they were supposed to pay, if
(38:10):
there's some other reason that you have to goonto their property and take back what is
yours, then for the most part, the law lookspoorly at just going in, breaking and entering,
and getting something even if it is rightlyyours under the law.
We call that self help.
Instead, we require you to go to the sheriffand actually get the state or the jurisdiction
(38:30):
that we're talking about to go and do that foryou so that we have some mechanism to prevent
people from just being vigilantes and doingwhatever they feel is right because that's a
kind of anarchic, not terribly useful way tofunction as a society.
And you can definitely argue that the way thatthese licenses operate in real time is to allow
these companies to have all this self help, andwe maybe need to have some protection against
(38:53):
that.
But it's important to know that Nintendo isn'tdoing anything terribly odd here.
It is in fact just drafting their document in amore direct way by a lawyer that seemingly is
more concerned about getting all of thespecifics on the page rather than leaving
things to your own kind of imagination asMicrosoft and maybe even Sony to a little bit
do.
(39:14):
But that's what I wanted to say about thistopic.
I think it's important.
I really do think it's good that people aretaking more interest in what is in the licenses
that they're entering into.
That's one of the reasons that virtual legalityexists.
And as I pointed out earlier, there areheadlines and articles about the fact that the
end user license agreement language differs inThe United States and other jurisdictions.
Part of that is because of the existence of theDMCA and the circumvention of technological
(39:38):
security measures provision that we talkedabout earlier.
Some of it is not.
We can't really take anything as certain untilwe know exactly what Nintendo wants to do with
that provision, and we are unlikely to knowthat in all reality because they're unlikely to
do anything with that provision in my view.
That said, if you enjoyed this content, if youlike hearing about things like the law and
business of video games and other pop cultureitems that you might be interested please
(40:01):
consider supporting VirtuaLegality and thischannel on the whole through Patreon, through
memberships to the channel.
We do livestreams a lot and through super chatson those livestreams.
I appreciate every little bit of support.
I can't do it without you, and I think we'redoing good work here to get this information
out to more people.
Otherwise, if you don't wanna do any of thosesupport mechanisms, that's totally fine.
I get it.
It's hard out there.
(40:21):
Just subscribing to the channel for free,telling your friends that we're having these
conversations, every little bit helps.
And please do check out Gamefile.
I think Steven Tutello is doing good work overthere, and I very much appreciate him
identifying these things even if I think someof the websites, like GameSpot in particular,
went a little bit too far with what heidentified.
That's been Virtual Legality for today.
Thank you so much for joining me, and I willsee you on the next one.
(40:47):
Virtual legality is a YouTube video series withaudio podcast versions presented as commentary
and for education and entertainment purposesonly.
It does not constitute legal advice and doesnot create an attorney client relationship.
If you have legal questions about the topicsdiscussed, please consult your own legal
counsel.
Hello, and welcome to Virtual Legality.
I'm your host, Richard Hoag, managing member ofthe Hoag Law business law firm of Northville,
Michigan.
And that means as a business law firm that Idraft end user license agreements, software
licenses, and website terms of serviceregularly as a day job.
And I have a lot of thoughts about this storythat you can see on your screen from game file
(00:34):
of Steven Totillo and what it means forNintendo owners or what they think are owners
of the new Switch two system in particular.
Now this article reads as a headline, Nintendowarns it may brick Switch systems, meaning it
can make them inoperable, whose users bypass,modify, decrypt, defeat, tamper with their
games and services.
(00:55):
And this was the first time I saw this storydiscussed.
It says it was 05/08/2025.
It also says this is a paid article, and Iwanna disclaim that Steven Totillo is one of my
favorite writers working in the video gamespace right now.
And so I do pay for his substack, but I wannadisclaim that because this is paid content.
He says he received an email at 11:39PM thathad the subject line updates to Nintendo
(01:18):
account user agreement and Nintendo privacypolicy.
And if you're in any kind of video gaming orany kind of other software customer, you know
that you get these emails from time to time.
Because the licenses that you agree to when youuse software all have within them a provision
that says, we as the software provider canchange these terms of service at any time.
But when they do change them, they give you anotice like the one listed in this email, and
(01:41):
he says in response to that email, it's a goodthing I looked.
Most of the changes, just over a 100 edits bymy account, were made to the Nintendo account
user agreement, a digital document that peopleclick on in order to use online connected
Nintendo services.
That's another aspect of this story that we'regonna discuss a little bit further on in this
video, But an important thing to note here isthat most of these companies, Nintendo,
(02:05):
Microsoft, Sony, anybody else that you might beplaying video games through, have a number of
different interlocked nested togetheragreements.
Some of which are for the platform, some ofwhich are for the hardware operating system,
some of which are for the content or accountservices as we see described here.
Now Nintendo actually tries to flatten thatecosystem of documents down to mostly one that
(02:27):
you have to interact with as a customer, andthat has a lot of benefits.
You don't have to read a number of differentdocuments, but it also has a lot of downsides
because there's a lot of conflated ideas in theNintendo document that may or may not apply in
the very nefarious ways that some are readinginto it.
So with that said, I wanna highlight whatSteven Totillo identifies as one of the biggest
items here.
(02:48):
The most strongly worded change from Nintendoamid their swath of updates is a major
expansion of the company's long standingwarning to the gamers it seems most frustrated
with these days.
Those who hack or modify its console and games,run emulators, and in Nintendo's assessment,
foment piracy.
Nintendo's old user agreement, effective sinceApril 2021, said, you are not allowed to lease,
(03:10):
rent, sublicense, publish, copy, modify, adapt,translate, reverse engineer, decompile, or
disassemble all or any portion of the Nintendoaccount services without Nintendo's written
consent or unless otherwise expressly permittedby applicable law.
Here's the new, way more intense versioncomplete with the potential punishment of your
Switch being bricked by Nintendo.
(03:30):
Without limitation, you agree that you may notpublish, copy, modify, reverse, engineer,
lease, rent, decompile, disassemble,distribute, offer for sale, or create
derivative works of any portion of the Nintendoaccount services.
Now one thing I do note as a lawyer here isthat there are a number of ways to write
provisions like this, and the first thing thatI see here is that the new lawyer working on
(03:52):
this version of the license agreement isclearly the kind of lawyer that likes to list
out every possible thing that they can thinkof.
If you've never worked with a lawyer before,you should know that lawyers, especially
business lawyers, are primarily in the businessof trying to figure out ways in which the
company that they are representing could beharmed in the future by not including something
(04:12):
in the contract in front of them.
So a type of lawyer looks at this and says,it's better to pack something and not need it
than need it and not pack it.
Imagining a future lawsuit or court that wouldsay, hey, you know how to write these words on
the page, and you only said decompile anddisassemble.
You didn't say anything about distributing oroffering for sale or creating derivative works,
(04:33):
etcetera.
And so various lawyers in corporations, workingfor corporations in outside firm capacities
like I do at Hoag Law or elsewise will havedifferent kind of risk aversion levels and know
their clients and what they want in theirdocuments a little bit better.
But it does mean that language can change thatreally doesn't change the substance of the
(04:55):
provision.
So here we've got a few new entries.
I've highlighted them in yellow, but it doesn'tactually change much of what we're talking
about here.
Nintendo always reserved all the rightsafforded to them under copyright law, which
includes the right to prevent derivative works,includes the right to prevent distribution they
don't like, etcetera, etcetera.
They're just listing them out more specificallyhere because the lawyer, whoever's in the room
(05:15):
here drafting this version of the document,likes to list things out more specifically.
Next, we see a reference to bypassing,modifying, decrypting, defeating, tampering
with, or otherwise circumventing, keep a noteon that word circumvent, any of the functions
or protections of the Nintendo accountservices, including through the use of any
hardware or software that would cause theNintendo account services to operate other than
(05:37):
in accordance with its documentation andintended use.
So this is aimed at what Steven Totilloidentified earlier, which is things that are
gonna break the way a Nintendo device functionsthrough a reference to the account services
specifically.
The next item is you can't obtain, install, oruse any unauthorized copies of Nintendo account
services.
The services specifically, but that doesinclude video games in the concept, or exploit
(06:02):
the Nintendo account services in any mannerother than to use them in accordance with the
applicable documentation and intended use ineach case.
Now that's a lot of words.
Right?
That's a lot of lawyer drafting there.
But ultimately, in my view, that is almostentirely covered by what was already in the
Nintendo old user agreement in April of twentytwenty one.
Now that said, they did add a bit of languagehere that I think has gotten everybody a little
(06:25):
concerned about what they're purchasing withthe Nintendo Switch, and that is that Nintendo
added language that said, you acknowledge thatif you fail to comply with the foregoing
restrictions, Nintendo may render the Nintendoaccount services and or the applicable Nintendo
device permanently unusable in whole or inpart.
Now this is one of those areas where I thinkNintendo trying to conflate things like the
(06:48):
operating system license with the video gamelicense and the account services concept is a
thing that makes it a little bit harder toread, not just for the layman, not just for
anybody that's not been to law school that justbought a Nintendo Switch, but also for the
lawyers.
Because the best reading of this to me, whatNintendo seems to be aimed at here is that we
can turn off your ability to use the Nintendoaccount services, what you purchased through
(07:11):
the eShop, and those kinds of things, and notnecessarily brick your console, but it's not
clear here, And bricking here would mean thedisabling of the operating system.
Understanding that when you purchase a Switchtwo or any other piece of technology in 2025,
what you are most likely purchasing is a bit ofhardware in the real world, the chips, the
(07:32):
actual box that you are putting under your TV,the dock that you're putting it in in the case
of a Switch, and the software that actuallyruns that hardware.
Right?
If Nintendo bricks it, it doesn't mean thatthey run into your house and steal your Switch.
It just means that they steal the functionalityof the Switch, and that's the same effect for
you and me.
But it does mean that they are talking aboutsoftware when they're talking about bricking
(07:54):
something, not lighting your system on fire.
So when we talk about these things, it'simportant to note here that we're talking about
a combined system of hardware and softwareacting together.
And what Nintendo is basically claimingDominion over is its software.
That because you have to connect online to usethe Nintendo account services anyway and
(08:16):
probably to operate your Switch in most casesthat you're gonna operate it on in 2025.
Nintendo reserves the right to say if you dovery bad things that we don't like, we can say
your operating system doesn't work, which meansyour Switch doesn't work.
That's not great.
I'm not gonna sit here and tell you that youshould be happy about these technology
companies having the ability to do that, but Iwanna get into this more fulsomely so that we
(08:38):
can better understand what the currentecosystem of video game devices is in any event
and what this language actually means.
The other thing I would add from a purelylawyer to lawyer term of art here is that I
don't think you acknowledge is actually theright way to describe this because you can
acknowledge all sorts of things that aren'ttrue.
So Nintendo saying, you acknowledge that if youfail to comply, we can brick your system,
(09:01):
maybe, is probably not as useful as a bit oflanguage that I like to put in my agreements,
which is user acknowledges and agrees, or youacknowledge and agree that we can do these
things.
That gives the party the right to actually dothose things.
You acknowledge that we can do this doesn'tactually put that legal right in play.
That's angels on the head of a pin.
That's very legal easy, so don't worry aboutthat too much.
(09:22):
But I did wanna state that this language is notlanguage that I love here, and that's because
it can't itself create a new right outside ofthe law just with this provision even though
contracts in general are putting forth rightsand obligations that either side has.
And you could write this in a way that maybe isa little bit more protective of Nintendo if
(09:43):
they decided to do that in the future.
But with that said, I did wanna point out thatSteven Totillo, who I again think is an
excellent journalist in this space, doesn'tjust say, wow.
That's a horrible thing that Nintendo can do.
It says not he says not that surprising, ofcourse.
We're just seeing Nintendo's recent legalenergy funneled into its user agreement.
So he's taking this with the kind of soberapproach that I expect from him at this point
(10:08):
in time saying, okay.
There's a lot of legalese here, and it doesn'tlook great, and we should note it.
I'm writing an article about it after all, butit maybe isn't the end of the world.
But not everybody takes that exact tack, andwe'll see that when we get to the response
section of this video.
The other thing I wanted to point out islooking at this document, there's a lot going
on here that maybe is not something that peopleare talking about as much as they maybe should
(10:32):
be.
One thing Steven Tutillo does note in hisarticle is that they have added this concept in
at the beginning of their document that says,your parent or legal guardian agrees to the
Nintendo account user agreement if you're achild and you otherwise click through to use
your Nintendo Switch to play Mario Kart world.
And one thing I note here as a top line item isthat this does appear to be Nintendo being very
(10:54):
aggressive in their documentation because inmost cases, this language isn't gonna work.
Right?
And there's nothing preventing anybody in anyspace, in any user license agreement, in any
other context from putting things in thecontract that a court is not gonna uphold.
It's maybe not a great idea, but you're tryingto signal to people of what you're trying to
achieve.
(11:15):
And this case is one where Nintendo got burnedby the fact that kids had agreed to certain
terms.
It when with respect to the Joy Cons, Ibelieve, on the Switch one system.
And some court said, well, that's not theadults that agreed to those terms, those
limitations on the ability to sue, forinstance.
And so Nintendo is trying to cover that bysaying, hey, kids, don't sign this if you're
(11:36):
under age 18, but if you do, your parents orlegal guardians are on the hook.
That probably doesn't work in contract lawbecause you can't just grab someone else that's
not a party and say you're now a party to thisdocument.
Things get a little bit confusing with respectto guardians and kids because you do have
certain responsibilities as a parent orguardian for the actions of your children in
(11:56):
The United States and in other jurisdictionslaws.
So this is probably a gray area, but it does atleast speak to the fact that Nintendo is trying
to be aggressive, doesn't necessarily carewhether or not this is fully enforceable as
much as it cares about signaling that it wantsit to be read this way, and that if you are a
parent or legal guardian, you should beconcerned and you should be wary of what your
child is doing so that we don't have to havethis fight in court again in the future.
(12:20):
Now importantly, this document, as misterTortillo said, says it governs your use of the
Nintendo account services through your Nintendoaccount.
And in definitions, it establishes the Nintendoaccount services including, for example, video
games as well as any other Nintendo productsthat require the use of a Nintendo account are
all included in this definition.
(12:40):
So they're grabbing things you buy from theeShop.
They're grabbing your Switch and your Switchtwo when they're discussing what they can do
under this license.
You acknowledge again that if you fail tocomply with the foregoing restrictions,
Nintendo may render the Nintendo accountservices and or the applicable Nintendo device
permanently unusable in whole or in part.
Now I think in all likelihood, that's best readto mean that we'll shut down your access to the
(13:04):
Nintendo online services, the eShop, and whathave you rather than bricking the whole system
because that would have all sorts of publicrelations ramifications that Nintendo probably
doesn't want at this point in time, but I can'tguarantee that.
Nobody can really guarantee that for you untilNintendo decides to do anything with this
language.
But, again, based on all the other inclusions,including what we just talked about at the top
(13:26):
and the additional language in this section,this appears to be a document written by a
lawyer that's trying to describe every possiblething that could happen in the future and wants
Nintendo to have the armament that it thinksthat they would need in the case that something
like this happened even if they didn't intendto use it.
Right?
One thing that other people should note aboutthese documents, there's a lot of landmines in
(13:48):
these things.
There's a lot of things that companiesotherwise reserve the right to do that in all
likelihood they wouldn't want to do because itwould have all those negative public relations
ramifications.
It wouldn't be a great market idea to do verybad thing x, y, or z, but they have them in
these documents because some lawyer somewheresaid, you're gonna regret it if you don't have
(14:09):
this bit of language somewhere in the future.
And the people in the room said, okay.
We'll go with that.
That's always a push and pull with businessesand lawyers.
Lawyers always are looking for every possiblebad thing that could happen and saying, you
should put this language in or else you'regonna get burned in the future.
Lawyers develop that kind of muscle memorybecause they're worried about being sued for
malpractice for the company flipping around onthem in the future and saying you never told us
(14:33):
this could have happened, and your failure todo so is malpractice and all these various
things that are bad things about the way thatthis whole process works.
But that's how this language gets in there, andI don't believe there's any strong intent by
Nintendo to actually start bricking systems outthere in the market because I can imagine that
would have a very negative ramification on theway they actually operate their service.
(14:55):
That said, there's a bit more in here that ismostly the same as it was in the earlier
version of this document, but is important forunderstanding what's happening here.
Breach and termination of the agreement,section 13.
Nintendo may terminate this agreement orsuspend your access to any or all Nintendo
account services in our sole discretion andwithout prior notice to you if you violate this
(15:17):
agreement.
Now important to note here is that this doesn'trequire a separate lawsuit.
Right?
The only people that are deciding whether youviolated this agreement for this provision to
take place for Nintendo to have these rights isNintendo itself.
And this is a way that people should beconcerned about end user license agreements in
general, which is to say, we've got all sortsof court protections and things that I can talk
(15:39):
about in virtual legality or elsewise that talkabout companies that have to go through a
process before they can do very bad thing toyou.
Contracts are different.
Contracts, you're agreeing to the bounds ofwhat each party can do in any given
circumstances.
Here, it says Nintendo can do these things ifyou violate this agreement, but doesn't say if
a court finds that you violated this agreement.
(15:59):
It just says if you violate this agreement.
And by its terms, that means if we at Nintendodecide that you violated the agreement.
Or as they say further on, if we have areasonable belief that such a violation has or
will occur, we just think you're a bad guy andwe think you're gonna steal our stuff.
Or as we otherwise determine to be reasonablynecessary for legal, technical, or commercial
(16:21):
reasons.
Right?
Not legal reasons.
If we think that it's a bad idea commerciallyfor you to have access to your Switch account,
then we can cut it off.
And that's worth noting.
One of the reasons I made virtual reality inthe first place was for people to take better
note of what's in the contracts that they'resigning so that they can understand what the
playing field is in the future on any and allthings related to video gaming or otherwise
(16:45):
things that they are interested in.
Now to some extent, people read what they wannaread and they see the parade of horribles and
say all these corporations are evil, etcetera.
But what I wanna point out is that these thingsare baked in, and I want people to be aware of
what they're signing so that they can makebetter purchasing decisions on what they want
to enter into and what they don't.
It's a big amount of trust that these companiesdemand.
(17:09):
When I sit here in virtual reality and saythey're unlikely to use these for any of the
very bad reasons, some companies will.
And they will develop a reputation that says, Idon't wanna enter into a user license agreement
with them for those reasons.
But it's important to note these things becausethis is the kind of language that leads to the
provision up above that says, you acknowledgethat we can brick your system.
(17:30):
So that's the state of play here.
I did also pull up the earlier document just topoint out that this is an area where Nintendo
is changing things a little bit.
You'll see that they elevated things that theycare about in this earlier version in respect
of individual arbitration.
That's again another lawyer thing that you doin a license agreement is to elevate the stuff
(17:50):
that you really wanna make sure is enforceablebecause some courts will look at a license
agreement like this and say if it's in themiddle somewhere and it's important, then we're
not gonna necessarily hold the other party toit because they didn't have an ability to
negotiate this contract, and they didn't knowwhat they were signing away.
This is the you can't put in you've sold yourfirstborn child in the middle of the document.
(18:11):
The court's not gonna enforce that anyway, butit's certainly not gonna enforce it if you
don't highlight that that's actually in thedocument itself because nobody really expects
the normal consumer to go through every word ofthese things.
And that's its own problem in the law, and wecould certainly talk about that on another
video.
But that's the state of play with respect tothe Nintendo Switch, and then came the
(18:31):
response.
So here's the IGN article.
Nintendo revises user agreement, and if youbreak it, Nintendo reserves the right to brick
your Switch.
That's IGN's headline.
I think that's mostly a good headline that isidentifying what is being stated here even
though we don't 100% know that Nintendo isclaiming the right to brick the Switch as much
(18:52):
as it is to cut off your access to the Nintendoservice portal.
We have other headlines.
Who really owns your Switch too?
It's a me, suggests Nintendo, which I thoughtwas amusing, so I highlighted here.
Nintendo can brick your Switch and skirtlawsuits in outrageous end user license
agreement update from hot hardwire.
And I think that is, again, the importantaspect of this.
(19:13):
This is obviously a headline designed to beincendiary, but, again, the the concern if you
have one with respect to end user licenseagreements on the whole, and certainly this one
if this popped up on your feed or you'reotherwise seeing news items about it, is that
Nintendo doesn't have to go through a court toturn your system off.
Nintendo doesn't have to.
It just has to claim that it sees something atissue with you potentially violating the terms
(19:37):
of the agreement or becoming a commercialliability to them in some way, and then they
can turn your system access off.
GameSpot had the most incendiary version ofthis, and I thought that this was really not a
great way to put this headline out.
According to Nintendo's end user licenseagreement, you won't actually own your Switch
two, and this has been jumped on in variousplaces on the Internet, and I still see it in
(19:58):
the last week or two.
And a full disclaimer, I'm a Switch two owner.
I love the Switch two, And so you can take mywords on that with a grain of salt.
I suppose I obviously thought the licenseagreement was fine enough for me to purchase
this particular console.
But GameSpot goes out with news like this.
This gets repeated in various places on theInternet.
And one of the reasons you're seeing this videotoday because I wanna talk to you all about
(20:20):
what Nintendo has the rights to do and whatthey don't have the rights to do even in the
contract terms they have.
So first and foremost, I wanna point out againthat what you're buying when you buy a Switch
two, when you buy a PlayStation, when you buyan Xbox, when you buy an MRI scanner, you know,
any other piece of technology in the world isthat you are buying a piece of hardware and
(20:41):
software operating together.
And when we talk about software, the contractsthat were are at issue here, we're talking
primarily about copyright.
So you make code and that operates your system,your hardware, and that code is copyrighted.
It's protected in the nature of what it is as acreative work rather than patented, which is
undoubtedly what is covering the hardware thatNintendo actually sells you in the box when you
(21:05):
go to the Walmart or the Target or what haveyou.
Copyright protects the software, and copyrightinfringement law is what's going to govern the
way that the end user license agreement is readby a court system.
Now that's important because one of the thingsthat pops in to cover copyright in The United
States is the Digital Millennium Copyright Actor the DMCA, which you see most often
(21:28):
referenced on the Internet with respect totakedown notices and things to YouTube and the
like.
But it has one important provision that'sreally key to understanding this issue as it
pertains to Nintendo and anything else that youmight buy into in the video game space.
That is the notion that the circumvention ofcopyright protection systems is itself
outlawed.
(21:49):
Mostly when we talk about copyrightinfringement, we're talking about stealing a
picture of Mario and putting it in your ownwork in some way that Nintendo wouldn't like,
and that's you using their intellectualproperty in a way that's unlicensed, and that's
infringement.
This is something different.
This says no person shall circumvent, and Itold you to put a pin in that word that they
(22:09):
put into their end user license agreement thistime, a technological measure that effectively
controls access to a work protected under thistitle.
And this provides an entire other avenue forthese companies to try to protect their
software to say, okay.
If we're protecting it through some kind ofhardware or other mechanism, then if you
circumvent that, we have our own independentright of action to sue you for infringement.
(22:34):
And that's important not just because theycould sue you for infringement, but but because
it establishes in statute that The UnitedStates cares about preventing the circumvention
of technological measures to protectcopyrighted works, which means that when they
put something in here in their end user licenseagreement that says, if you circumvent, we can
turn off your software, then they think thatthey're more likely to succeed in a court case
(22:58):
that somebody fights.
Right?
When Nintendo hits that Switch, they turn offyour Switch two, somebody sues them.
They say, we can prove that you were trying tocircumvent us, with whatever you were doing
piracy wise, and they believe The United Statescourts will look at this and say, yes.
The congress has said we're concerned aboutthat, so we are going to side with Nintendo.
It's also one of the reasons why the languagein the end user license agreement in other
(23:21):
jurisdictions that are not under thejurisdiction of the DMCA do not contain the
same language that we're discussing today.
It's not just because the the rules aredifferent and are interpreted differently in
the courts.
It's because they don't have this particularconcept in other jurisdictions, and Nintendo
doesn't know whether the courts would allow forthe enforcement mechanism that they're claiming
(23:43):
in The United States.
But that's important to understand this entireconcept because when we get further in, we see
that that particular provision allows for civilrights of action, I e, you can sue for damages,
and whatnot, which Nintendo could use in thefuture if they felt so inclined.
It also includes criminal penalties.
If you are seen as someone who is willfully andotherwise violating that particular section,
(24:07):
you're talking about years in prison, hundredsof thousands of dollars in fines, and that can
be something that evidences, again, that TheUnited States cares enough about this concept
that Nintendo feels that they can say, we canshut down this software, and a court is gonna
back them up at the end of the day.
I can't promise that one way or the other,neither can the lawyer in the room for
(24:28):
Nintendo.
But if they were to pursue this remedy, theysee there's some piracy, they're gonna shut
down access to the online store or maybe evenbrick the system in its entirety, they are
doing it on the premise that the circumventionof a technological measure to prevent piracy,
to prevent copyright infringement is somethingthat The US cares enough about that a court in
The US is going to backstop their ability to dothese kinds of things.
(24:50):
Now on the other side of the coin, there arecases relatively recently, this is from 2017,
that talk about companies that try to hard locktheir ecosystem of products and not being
allowed to do so.
This is a patent case that's pretty famous inthe patent world called Impression versus
Lexmarks that talks about toner cartridges.
(25:13):
Respondent Lexmark International designs,manufactures, and sells toner cartridges to
customers in The United States and abroad.
Companies known as remanufacturers acquireempty Lexmark's toner cartridge, including
return program cartridges from purchases in TheUnited States, refill them with toner, and then
resell them.
Lexmark argues that because it expresslyprohibited reuse and resale of these
(25:36):
cartridges, Impression Products infringed theLexmark's patents when it refurbished and
resold them.
Impression Products moved to dismiss on thegrounds that Lexmark sales both in The United
States and abroad, exhausted its patent rightsin the cartridges.
So Impression Products was free to refurbishand resell them.
Spoiler alert, the court's gonna side withImpression and say that Lexmark exhausted its
patent when it sold the good into the line ofcommerce and then Impression can take their
(26:00):
toner cartridges in a different market, refillthem, and sell them against Lexmark.
This is a little bit like an antitrust casethat we might have discussed in virtual
legality before, but it's important to notethat there are kind of threads of court cases
in The United States that are looking a littlebit more askance at the way these companies
operate and take broad rights to preventpotential competition in these spaces in
(26:25):
context like patent law.
We're not talking about patents again.
We're talking about copyrights in thisparticular instance.
But it is worth noting that if Nintendo were toshut down some switches, then part of what the
argument would be against their ability to doso would be that Nintendo is trying to cut off
competition in some important way.
And certainly, has a history of doing that.
(26:46):
If you look at the Galoob cases in Game Geniein the past that really gave rise to modern
emulation software law in The United States,Nintendo may be pushing too hard on this
particular question if they were to shut downswitches in regards to potential infringements
even with the DMCA sitting out there.
So I do wanna point out that this is acomplicated point of law even right now in The
(27:08):
United States with the DMCA sitting out there,and Nintendo knows that.
This is a lawyer saying we wanna have thisprovision, but that is entirely different from
Nintendo itself saying we're gonna execute onthat provision.
So I think there are a lot of reasons tobelieve that Nintendo won't execute on that
provision, that you do own your Switch two forall practical purposes, and that there isn't a
lot to worry about here.
But one of the bigger items that would lead meto that notion is that everybody else has a
(27:33):
provision like this, folks.
I know GameSpot says you don't really own yourSwitch two, but that's only true to the extent
that you don't own any piece of technology thatuses a software operating system as of 2025.
So let's take a look at the PlayStation Networkterms of service and user agreement to have
that discussion.
First, we note that this agreement that I'vepulled up right now is with respect to access
to the PlayStation Network.
(27:54):
Again, Nintendo kind of collapses all of itssoftware concepts into that one agreement for
the most part.
Sony doesn't do that.
Sony actually has terms of service for thePlayStation Network where you buy games through
their digital platform interface, and they alsohave a system software license agreement where
when you talk about bricking systems and thingsthat are gonna really scare you, they probably
(28:15):
more rightly belong.
But since the Switch doesn't appear to havethat dividing line, you get everything baked
into the same agreement and you get headlineslike they say they can break your system when
maybe they're claiming that, maybe they're not.
Because when we look at the how PlayStationdescribes these things, this is different
lawyers for different companies.
You see they describe the PlayStation Network,and then if we go a little bit further on, we
(28:36):
get the same language that says it's a licensedconcept.
It's not sold to you.
Every piece of software is licensed.
And then importantly, it says in section 1.6,top line item, first section, breach of these
terms may result in the temporary or permanentsuspension of your console or your account.
They specifically reference your console therein the Sony terms of service.
(28:59):
Now they also talk about suspension rather thanbricking anything or permanently disabling, but
permanent suspension and permanently disablingare not concepts that are different enough
under my eye to say that they're differentconcepts for this purpose.
Now if we scroll a little bit further in thisparticular license agreement, we'll see that
suspension does sound a little bit differentwhen we get there.
(29:23):
But as a top line item, Sony reserves the rightto do very bad things to your PlayStation five
if they determine that you've breached someaspect of this very long license agreement,
including aspects related to community.
Right?
User generated content and how you interactwith the Sony community overall, which we've
covered in virtual reality as a potentialproblem because you shouldn't lose access to
(29:45):
everything that you've spent money on becausesomebody doesn't like a bit of language that
you've used in chat at some point on yourPlayStation.
But that's what this license agreement says.
It says we can suspend you for all these verybad things.
You bear all risk of loss for the things thatyou buy from us.
You may not do any of these bad things that wetalked about with respect to the Switch terms.
(30:05):
You may not reproduce or transfer content.
Use the content for resale, public performance,display, except as stated in this agreement.
You may not create any derivative works, andthat becomes important for these conversations
because when you are on Twitch, when you areotherwise broadcasting on YouTube or wherever
else you're playing your video games and havingpeople watch you, that is in all likelihood
(30:26):
creating a derivative work under the law thatthe various licenses that you've entered into
when you purchased your license to your videogame probably didn't allow for expressly.
Now there are some exceptions to that I'vetalked about in virtual reality before, like
Minecraft has a very broad piece of languagethat says you can absolutely stream this, under
some specific rules.
(30:47):
But for the most part, the baseline rule whenyou buy a video game is that you don't have the
right to put it out there into the world.
You don't have a right to do these variousother things.
That's one of the reasons why you see thingsget struck on Twitch when when you see things
become an issue on YouTube.
The limited license granted herein and all useor access to the content is expressly
(31:07):
conditioned on your compliance with theseagreements terms.
Except for the rights expressly granted herein,Sony, its affiliates, and everybody else that
it's has an interest in reserves all of itsrights.
Upon termination of this agreement, youraccount or license to any content will
immediately cease.
Continuing on a little bit further, again, verylong document here.
(31:30):
Console suspension with or without notice.
We may restrict, suspend, or terminate your PSNaccount and PlayStation device, your console,
or indefinitely restrict, suspend, ordiscontinue your access to or use of certain
PSN content offerings, features, products,services if you violate this agreement.
Again, we can basically make that claim.
Yes.
You can sue us about the reasonability of thatclaim, but that's really gonna be a problem for
(31:53):
you more than us.
With or without notice, we can turn your stuffoff.
If we have a reasonable belief such a violationhas or will occur, again, there's that future
looking thing, we think that you might violatethis agreement in the future.
We have that reasonable belief.
You have to prove it wasn't reasonable in orderto win your rights back.
It's a whole problem for you if you have aPlayStation five, but it looks the very same as
(32:14):
what we are seeing in the Switch documentation.
This has been the Sony documentation for a verylong time now.
Upon termination of your account, you will notreceive a refund for items, value accumulated,
or any unused balance in your wallet except forsome specific rules in specific jurisdictions.
And upon suspension of your PlayStation device,you will not be able to use that console to
(32:35):
access PSN, play any games or game modesrequiring online access, or access any content
purchased from the PlayStation Store.
Now that honestly sounds a little bit lessproblematic than what we see in the broad
language used in the Switch document, but againthat's because Sony separates out its
PlayStation Network account license from itssystem software license.
So if we go and we look at that document, whichwe will right now, we can see some of the more
(32:59):
scary language that you might be concernedabout if you're a Sony PlayStation player.
This agreement applies to any system software,firmware, and Internet browser software and
other application included in your PS fivesystem.
All rights to use system software are grantedby license only, and you are not granted any
ownership rights or interest in systemsoftware.
Now that's normal.
Right?
You don't think that by buying a PlayStationfive, you suddenly have the right to the system
(33:21):
software that's operating that PlayStation fiveinsofar as you could pull it from the
PlayStation five and then sell it to someoneelse.
You don't have that right.
Nobody's really confused about having thatright when you buy a console, but they have to
put it in a license like this one so that it'sclear for the law if it ever came up in court.
Continuing on, if SIE, Sony, determines thatyou have violated this agreement's terms, Sony
(33:44):
may itself or may procure the taking of anyaction to protect its interests such as
disabling access to or use of some or allsystem software.
Now it doesn't say it in as bright line inblack letter here, but if they disable access
to your system software for your system, yoursystem is not gonna work.
That is bricking a system.
This is the same concept as what everybody isworried about with the Switch as what GameSpot
(34:07):
put up and said you don't own your Switch.
I'm saying this so that we understand theecosystem, not that you have to be happy about
what's in the Nintendo license agreement orwhat's in the Sony license agreement.
Just to note that this is happening acrosstechnological devices.
It's not limited to game consoles in anyrespect.
I used as an example earlier Medical devices,this is a big issue with respect to whether or
(34:28):
not the provider of medical devices can turnthose things off if they feel that somebody is
violating the terms of service that they'veentered into to operate that particular device.
And that's obviously more important thanwhether or not you can play the latest Call of
Duty, whether or not the MRI scanner canactually be used on your patients in the
hospital.
But that's where these legal questions getanswered is with really serious, really
important stuff, and they haven't been answeredyet.
(34:50):
So Sony reserves the same right that Nintendonow claims.
Nintendo was already reserving that right intheir earlier terms of service, and yet we do
not see a universe in which PlayStations andSwitches are just being bricked willy nilly
because the companies decide that they don'tlike you.
Why?
Because that's bad business.
They wanna sell you Switches.
They wanna sell you PlayStations.
(35:11):
And because they wanna do those things, theyare unlikely to engage in just crazy bricking
of systems, and you can consider yourself theowner of the hardware that you have purchased
even though there is this right that thesecompanies have established for themselves in
their contracts and are likely to be upheldbecause they have to be able to control their
software and copyright prevents people frominfringing on that software in general.
(35:35):
Now Microsoft is a little bit more confusinghere because Microsoft again is primarily a
software company and they draft their licensesprimarily about their software overall.
So they use a kind of broad umbrella agreementto talk about all the software they might sell
you.
That includes everything from Windows to Xboxoperating software, and you have to kinda dig
through various documents to get to what mightbe of most interest to you, we can see an Xbox
(35:58):
section here that says the Xbox online service,Xbox Game Studio games, application
subscriptions, and content provided byMicrosoft are only for your personal and
noncommercial use.
They're licensed in general.
They're not sold to you, etcetera.
And then the bit of language that's the closestto what we're looking for here, for any device
that can connect to Xbox services like an Xbox,we may automatically check your device for
(36:21):
unauthorized hardware or software that enablescheating or tampering in violation of the code
of conduct or these terms and download Xbox appsoftware updates or configuration changes,
including those that prevent you from accessingthe Xbox services or from using unauthorized
hardware or software that enables cheating ortampering.
Now that probably strikes most of you as alittle bit less controversial than what we were
(36:42):
reading in the Switch license agreement becausethis is only talking about cheating or
tampering.
But from a legal perspective, when you talkabout Microsoft deciding what tampering even
means, that could easily be including theconcept of pirating software and the various
other things that Nintendo now expressly callsout.
And you have to ask yourself whether you prefera bit of language here that probably covers the
(37:04):
same same things that you're concerned aboutbut isn't as clear, or whether you prefer
Nintendo being very brightly worded in whatit's saying it can do and at least having the
fight now before the fight would really be aproblem in the future.
My argument would be that I prefer that kind ofbright line, line in the stand, say what you
mean in these kinds of provisions.
(37:25):
Microsoft having this bit of language heresuggests to me as a lawyer the very same rights
being claimed as what Nintendo's claiming andwhat Sony's claiming, but reasonable minds can
differ even on that score.
The point is that this is basically the samekind of license concept that you see across all
systems, all pieces of technology that youwould buy in 2025.
(37:47):
You don't have to like that.
You can think that there are laws that shouldbe put into place that maybe prevent this or
require you to go to court to enforce thesevarious things.
I would be open to that conversation.
Certainly, when we talk about bricking systems,when we talk about cutting off system software,
that sounds a lot like what we would talk aboutin legal parlance as self help.
Right?
If you've sold something to somebody and theydidn't pay what they were supposed to pay, if
(38:10):
there's some other reason that you have to goonto their property and take back what is
yours, then for the most part, the law lookspoorly at just going in, breaking and entering,
and getting something even if it is rightlyyours under the law.
We call that self help.
Instead, we require you to go to the sheriffand actually get the state or the jurisdiction
(38:30):
that we're talking about to go and do that foryou so that we have some mechanism to prevent
people from just being vigilantes and doingwhatever they feel is right because that's a
kind of anarchic, not terribly useful way tofunction as a society.
And you can definitely argue that the way thatthese licenses operate in real time is to allow
these companies to have all this self help, andwe maybe need to have some protection against
(38:53):
that.
But it's important to know that Nintendo isn'tdoing anything terribly odd here.
It is in fact just drafting their document in amore direct way by a lawyer that seemingly is
more concerned about getting all of thespecifics on the page rather than leaving
things to your own kind of imagination asMicrosoft and maybe even Sony to a little bit
do.
(39:14):
But that's what I wanted to say about thistopic.
I think it's important.
I really do think it's good that people aretaking more interest in what is in the licenses
that they're entering into.
That's one of the reasons that virtual legalityexists.
And as I pointed out earlier, there areheadlines and articles about the fact that the
end user license agreement language differs inThe United States and other jurisdictions.
Part of that is because of the existence of theDMCA and the circumvention of technological
(39:38):
security measures provision that we talkedabout earlier.
Some of it is not.
We can't really take anything as certain untilwe know exactly what Nintendo wants to do with
that provision, and we are unlikely to knowthat in all reality because they're unlikely to
do anything with that provision in my view.
That said, if you enjoyed this content, if youlike hearing about things like the law and
business of video games and other pop cultureitems that you might be interested please
(40:01):
consider supporting VirtuaLegality and thischannel on the whole through Patreon, through
memberships to the channel.
We do livestreams a lot and through super chatson those livestreams.
I appreciate every little bit of support.
I can't do it without you, and I think we'redoing good work here to get this information
out to more people.
Otherwise, if you don't wanna do any of thosesupport mechanisms, that's totally fine.
I get it.
It's hard out there.
(40:21):
Just subscribing to the channel for free,telling your friends that we're having these
conversations, every little bit helps.
And please do check out Gamefile.
I think Steven Tutello is doing good work overthere, and I very much appreciate him
identifying these things even if I think someof the websites, like GameSpot in particular,
went a little bit too far with what heidentified.
That's been Virtual Legality for today.
Thank you so much for joining me, and I willsee you on the next one.
(40:47):
Virtual legality is a YouTube video series withaudio podcast versions presented as commentary
and for education and entertainment purposesonly.
It does not constitute legal advice and doesnot create an attorney client relationship.
If you have legal questions about the topicsdiscussed, please consult your own legal
counsel.
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