11 Video Games That Resulted in Major Lawsuits

By: Jack Sackman
A paper with the word "lawsuit" written on it.
The video game industry has seen its fair share of lawsuits. courtneyk / Getty Images

Think the video game industry is all fun and games? Think again. Video games have been the subject of some very monumental lawsuits over the years, and issues involving developers, characters, controversies, and merchandise have tied up courts around the world and resulted in multi-million dollar judgments and settlements. And nobody in the video game world seems to be safe. Everyone from Pac-Man to Donkey Kong has been dragged into ugly legal battles over the years. Here is a list of 11 video games that resulted in major lawsuits.


11. Grand Theft Auto — Hot Coffee

One of the most publicized video game lawsuits was a result of the “Hot Coffee” mod in Grand Theft Auto: San Andreas. Rockstar Games originally programmed in an explicit sex minigame, where the player had to perform certain button movements in order to make the in-game character please his girlfriend. The entire scene was eventually scrapped from the game, but the code remained. When GTA: SA was released for the PC in 2005, tech geeks quickly uncovered the minigame. Soon, it was also possible to hack the Xbox and PlayStation versions to unlock the Hot Coffee scene.

The game’s publisher, Take-Two Interactive, were sued by the City of Los Angeles for failing to disclose sexual content. The FTC also launched a suit, along with several massive class-action lawsuits from consumers. All told, accidently leaving in some crude code cost the company well over $20 million! It wasn’t the last time Rockstar would be in legal trouble — Manhunt resulted in another lawsuit and Lindsay Lohan tried to sue, claiming Rockstar used her likeness in an advertisement for Grand Theft Auto 5.


10. The Olsen Twins vs. Acclaim

Remember those lovable Olsen twins from the TV show Full House? Mary-Kate and Ashley Olsen were their own industry back in the late 1990s and early 2000s. Their likeness was used to sell everything from t-shirts and lunch boxes, to records and video games. And it was the twins’ involvement with video games that resulted in a major lawsuit. In 2004, Mary-Kate and Ashley sued video game publisher Acclaim over $177,966.32 in back royalties after their company Dualstar Entertainment split from Acclaim a year earlier. Acclaim was to pay back the royalties plus interest, as well as a $300,000 penalty fee after their game Mary-Kate and Ashley in ACTION! was cancelled across platforms that included the GameCube, Game Boy Advance, PlayStation 2, and PC. A letter from the Olsen twin’s lawyer to Acclaim asserted that the video game publisher “blatantly abandoned the Mary-Kate and Ashley brand and has taken the Mary-Kate and Ashley brand in video games, which had flourished, and has now run it into the ground.” Acclaim settled out of court and learned never to cross the twins again.


9. Mortal Kombat — Wilson vs. Midway Games

This lawsuit stemmed from a pretty gruesome event that occurred back in the 1990s. In 1997, a 13-year-old boy named Noah Wilson passed away after his best friend stabbed him in the chest with a kitchen knife. Noah’s mother took steps to sue Midway Games, makers of the popular fighting game Mortal Kombat, claiming that her son’s best friend was addicted and obsessed with the violent game and that he believed he was the character Cyrax, who was described as “a robotic ninja.” A lengthy court case ensued and the judge found that Midway Games was not liable for the death under the First Amendment, as the State of Connecticut could not violate their free speech rights to make video games, regardless of violence. Still, this incident helped to reinforce the movement against violent video games that continues to this day.


8. Guitar Hero — The Romantics Vs. Activision

American rock band The Romantics filed a lawsuit against Activision over the use of their song “What I Like About You” being featured in Guitar Hero Encore: Rocks the 80s, which was released back in 2007. Despite giving Activision written permission to use a cover version of the song, the Detroit-based band claimed that the song used in the video game sounded too much like their original. Activision defended itself, saying that a cover version of a song should sound like the original. After much back-and-forth between each party’s lawyers, a federal judge sided with Activision under the original license agreement the company had acquired from The Romantics, noting that the band had given permission for their song to be used in Guitar Hero. After losing that case, The Romantics then tried to sue for a greater share of royalties from sales of Guitar Hero. The band lost that lawsuit too.


7. NCAA Basketball 2014 — O’Bannon and Keller Vs. Electronic Arts

In 2009, former collegiate athletes Ed O’Bannon and Sam Keller filed a lawsuit against video game juggernaut Electronic Arts and the Collegiate Licensing Company, claiming they were not paid royalties when their likenesses were used in NCAA Basketball and NCAA Football video games produced by EA Sports. This lawsuit caused a lot of consternation both at EA and within the NCAA, as both organizations feared a rash of future legal actions from college athletes who were featured in sports video games. The case never made it to trial, however. O’Bannon and Keller settled out of court with EA for an undisclosed sum of money in 2013, while the company announced that they would no longer sell NCAA Football 2014, putting the franchise’s future on ice in the process.


6. Donkey Kong vs. King Kong

Universal Studios filed a lawsuit against Nintendo for copyright infringement in 1982, claiming that Japanese video game creator Shigeru Miyamoto had based the character Donkey Kong and his video game story on the 1933 film King Kong, which was the movie studio’s intellectual property. Parent company Nintendo fought the lawsuit and claimed that King Kong was in the public domain after it was revealed that Universal had sued rival movie studio RKO — the movie studio that made the original 1933 film — over King Kong’s film rights. At the time, Universal also claimed that King Kong was in the public domain when they made a disastrous remake of the film starring Jeff Bridges in 1976. A few years after Universal filed the lawsuit, the United States District Court sided with Nintendo and ruled that King Kong was indeed in the public domain, and Donkey Kong did not violate any copyright that Universal Studios had claim over. Nintendo was awarded $1.8 million from Universal Studios to cover their legal costs in the matter.


5. Lineage II — Smallwood vs. NCsoft

This lawsuit comes straight from the bizarre file. In 2010, a Hawaiian man named Craig Smallwood filed a lawsuit against the South Korean company NCsoft for making the massive multiplayer online game Lineage II “too addictive.” In his legal filing, Smallwood claimed that, from 2004 to 2009, he had invested more than 20,000 hours playing the game and averaged about 11 hours of gameplay each and every day. He further claimed that he became psychologically dependent and addicted to Lineage II and was “unable to function independently in usual daily activities such as getting up, getting dressed, bathing or communicating with family and friends.” He even likened his situation to a heroin addiction. The lawsuit continued to hold NCsoft liable because the company failed to provide any warning that MMO gaming could be so addictive. The courts threw out the lawsuit in 2011, and referred Smallwood to psychological counselling.


4. New Super Mario Bros. — Nintendo vs. Burt

This legal case represents an interesting issue with illegal downloading. A 24-year-old Australian man named James Burt was ordered to pay Nintendo $1.5 million after he managed to buy an early version of New Super Mario Bros. for the Wii and illegally uploaded the game to the internet. The file was downloaded more than 50,000 times in five days, the week before it was to be released in November 2009. This was a clear “no-no,” as copying and distributing video games without permission is a violation of the Copyright Act under Australian law. Nintendo and Burt came to an out-of-court settlement agreement that reflected the video game company’s loss of revenue for a full week of sales. Burt had to pay an additional $100,000 to Nintendo for the company’s legal bills and court costs. Although Nintendo initially sued Burt, the company gave him a very exclusive gift after the matter was satisfactorily settled — a limited edition Legend of Zelda: The Wind Waker statue. So, a happy ending of sorts on this one.


3. Unlicensed Nintendo Games — Nintendo Vs. Tengen

At the height of the NES’s popularity in the late 1980s and into the early 90s, Nintendo had very strict license agreements with third-party developers to only release five games per year, and these titles would be exclusive to Nintendo for a two-year period. Nintendo argued that this ensured high quality games for consumers and that they would put the official “Nintendo Seal of Quality” on each exclusive game. However, in 1987, the Atari Corporation split into two divisions, Atari Games and Tengen, and tried to negotiate a less restrictive license with Nintendo. The executives at Nintendo refused to renegotiate and Tengen turned to the United States Copyright Office to acquire designs of Nintendo’s lock-out chip to reverse engineer and bypass it, so they could sell as many unlicensed video games for the NES as they wanted. As soon as Nintendo got wind of Tengen’s actions, they launched a massive lawsuit for copyright and patent infringement. The case dragged on for years, but the U.S. courts eventually sided with Nintendo. The two sides then settled the lawsuit out of court in 1996.


2. Pac-Man and K.C. Munchkin — Atari Vs. Philips

In the early 1980s, Pac-Man was the hottest thing in video games, and pop culture for that matter. Eager to capitalize on the popularity of the character, Namco and Midway were busily developing a home version port of Pac-Man for the Atari 2600 console – taking the yellow dot eater from the arcade domain and into people’s living rooms. But a year before Atari’s planned release of Pac-Man for the 2600 console, Magnavox and Philips Electronics debuted the video game K.C. Munchkin, which resembled Pac-Man so much that it was almost embarrassing. K.C. Munchkin was available for the Philips Videopac home console. The game’s winding levels and its ghost-like monsters bore an uncanny resemblance to Pac-Man. The similarities were undeniable. In 1982, Atari sued Philips for copyright infringement and an appellate court found that Philips had copied Pac-Man almost completely. The Court’s ruling was the first to recognize how copyright law would apply to the look and feel of computer software. Later in the year, Atari released the homeport of Pac-Man, and it sold seven million copies and became one of the best-selling video games of all time.

1. Pong — Magnavox Vs. Atari

A lawsuit involving the simplest video game ever? You better believe it. In 1972, Atari’s electronic table tennis game Pong, the first true home video game, became a sensation. Ralph Baer, inventor of the Magnavox Odyssey gaming console that played Pong, sought legal action against Atari. Baer claimed in his lawsuit that Atari co-founder Nolan Bushnell had copied Magnavox’s version of electronic Ping-Pong after Bushnell played the game at a Magnavox dealership demo a few months before Pong was released. Bushnell initially balked at the lawsuit but quickly settled of court in 1976, despite his lawyer’s advice to take it to trial. Bushnell had good reason to settle the case. At that time, Atari was a fledgling start-up, and the legal costs involved in the case would’ve exceeded the company’s entire funds. If they had gone to trial, Atari likely would not have been able to make payroll. As part of the settlement, Atari continued to sell Pong in arcades around North America, and on home consoles while paying licensing and royalty fees to Magnavox.