Report: YouTube personalities may be breaking federal guidelines, at risk for lawsuit

Dead Realm, a game by Section Studios, launched on Steam's Early Access program some weeks ago and has met with early sales success. That success comes in part because the game has been custom-built for YouTubers. However, the game was also literally built with the help of several YouTube personalities who are now using their channels — each with millions of subscribers — to promote a game they have a financial stake in. Their failure to disclose that relationship may risk a federal investigation, Gamasutra reports.

Dead Realm is described on Steam as a multiplayer survival horror game. Players can take the reins of either the main character, or a ghost in the game environment. That kind of interaction between players seems custom-built for today's Let's Play-style YouTube and Twitch personalities. Dead Realm is being published by a company staffed by successful YouTubers.

That publisher, called 3BlackDot, was founded by ex-Machinima staffers as well as successful YouTubers Tom "Syndicate" Cassell and Adam "SeaNanners" Montoya.

From the Deadline.com story announcing the company a year ago:

Must Read

The FTC on paying YouTubers to endorse games

Company principals include two former Machinima executives (Angelo Pullen and Luke Stepleton) and two prominent YouTube personalities (SeaNanners, aka Adam Montoya, and TheSyndicateProject, aka Tom Cassell).

As well, Stepleton’s older brother, former Duck Dynasty co-executive producer Hank Stepleton, will join the organization as partner and head of Pickaxe, the company’s video-content production company. The first Pickaxe project will be a live-action short based on Zombie Killer Squad, the mobile title developed by the company’s game unit and released last November to substantial success. The trailer for the short will be shown at San Diego Comic-Con this week, at a lounge 3BlackDot will be running for its online influencers and others.

Gamasutra points out that both Cassell and Montoya "have published multiple videos of themselves excitedly playing Dead Realm without clearly disclosing their financial ties to the game's publisher."

Those actions, Gamasutra says, defy the Federal Trade Commission's guidelines for how YouTubers should disclose paid endorsements.

The FTC's guidelines state that "if an ad features an endorser who’s a relative or employee of the marketer, the ad is misleading unless the connection is made clear. The same is usually true if the endorser has been paid or given something of value to tout the product. The reason is obvious: Knowing about the connection is important information for anyone evaluating the endorsement."

Gamasutra concludes that, "failure to do so is grounds for an FTC investigation, which could lead to a lawsuit."

The lack of disclosure may also run afoul of a similar set of guidelines published by the U.K. Committee of Advertising Practices just this week.