The Chronicles of Elyria Lawsuit and its Virtual Real Estate Controversy

On October 3, 2022 the United States District Court, Western District of Washington dismissed a class action complaint made by lead plaintiff James Falls against Soulbound Studios LLC, the developer of a would-be MMO  Chronicles of Elyria.

Falls spent over $20,000 on in-game content in support of the development of the game, which was cancelled in early 2020. The Plaintiffs raised issues about pre-release “game footage” that was actually cinematics, and claimed breach of contract with respect to refunds as well as violation of consumer protection legislation.

Ultimately, the Court dismissed the breach of contract claim on the basis that the refund policy offered by a third party vendor was not incorporated into Soulbound’s Terms of Use. They also dismissed the consumer protection claim, finding that the misleading announcement did not “have the capacity to deceive a substantial portion of the public.” They made this determination based on disclaimers in the Terms of Use, including ones expressing that the services provided may differ from those shown at the time funds were deposited.

I found this case interesting for two reasons:

Firstly, it seems unfair to me that users can purchase digital content in support of a game and have no recourse when the game is never finished. While the Terms of Use contained disclaimers and this was treated as a contractual issue, the website is very misleading. I think there is room stronger consumer protection in a situation like this.

Secondly, a component of the in-game item sales was in-game lands. The developers sold virtual real-estate for $65-$3500, that will likely never exist. I wonder as we move into the digital world in more meaningful ways, whether digital land should be treated differently than other types of in-game items.

What do you think?

The full complaint and decision as well as some website content can be found below: