In 2005 California enacted a law which would have made it illegal to sell extremely violent video games to minors. Much in the same way that it's illegal to sell Hustler to a minor. The video games version of the RIAA, the Entertainment Software Association (ESA), objected to this, with the support of many different organizations like the RIAA, MPAA, ACLU and many big players in software, like Microsoft and Activision. However, there's more history to this case than first meets the eye. You have to go back to the initial ruling on pornography to really understand what's at stake here and how this ruling could impact the gaming industry.
In 1964 a movie called "the Lovers" a French movie was banned in Ohio, because Ohio deemed it obscene. Ohio also fined the owner of the theater where the movie was shown. The owner took Ohio to court over this ruling. In this case the court decided this movie was not obscene, and that Ohio was violating the First Amendment of free speech. This case is where the phrase, I can't tell you what it (pornography) is, "but I know it when I see it" comes from. One of the Supreme Court Justices, Justice Peters, had decided against a hard and fast definition, but declared that this movie was ok.
Fast forward nine years and you run into another case against California. In this one a guy name Miller was selling sexually explicit material through a magazine. In this case an actual test was created to determine if the material was obscene or not. This test is the basis for the California law signed into effect in 2005.
If this law had gone into effect, it was halted with an injunction, it would have had a chilling effect on the video game industry. So, we know that it's steadily gotten more difficult to buy violent video games since the 90's because of the ESRB (Entertainment Software Rating Board) placing ratings on video games. This is similar to what happens with movies. The major difference is that it is up to the reseller to determine if they want to carry a product with the M rating or not. Effectively what this law would have done is to turn the M from the equivalent of an R rated movie into an NC-17 or X rated movie. This would devastate the First Person Shooting (FPS) industry as well as many other games, such as fighting games, some real time strategy and most likely role playing games as well.
We got lucky. The court ruled that Video games are protected by the First Amendment. The results from the Justices were interesting. While the ruling was 7-2, it could have easily been 5-4 if the law had been written differently. The majority, 5 of the Justices, argued that California had been unable to prove that video games were different enough from books, movies, television and other media to justify this law. Thus they ruled it was violating the First Amendment. The two other Justices, Roberts and Alito, argued that the law was too vague and thus, if narrower the Justices would have sided with California.
The dissenting Justices argued that minors have different kinds of free speech, and they claimed there is not much difference between binding and murdering a women and binding and murdering a topless woman. Using this argument is basically saying that it's obscene to create this kind of art.
There were also discussions on the science used in this case. Which claimed that the more interactive nature of video games make them more dangerous to children developing minds than any other sort of entertainment.
Now that you have some understanding of this case what does it all mean? Well, first, in a way, this legitimizes video games as a type of art. We all have felt that they've been art, but now officially the Supreme Court of the US (SCOTUS) has agreed and given video games the protection they deserve. Second, this prevents any other state from attempting to pass a law similar to the California law. It's also clear from the way that the Justices ruled on this decision that even a narrower ruling would have gone in favor of the video game industry. This is a really good thing, as it means that it's unlikely another state will try to challenge this ruling with the current Supreme Court.
What other implications does this have? Well, it clearly says that as a culture we feel that violence is inherently different than sex. We have made it clear with this ruling that the US is willing to accept graphic violence as non-obscene while sex is. This is interesting itself. The initial ruling on obscenity, and the 2005 California law, state that what is culturally acceptable defines obscenity. With this ruling we are saying that violence is acceptable in media.
Other observations, while the SCOTUS ruled that there isn't a difference between video games and books and movies, I can't help but still see that there is. Some in books, such as A Song of Ice and Fire (ASOIF), would never be allowed in movies are video games because of the sexual content. However, a young impressionable mind can more easily pick up one of these books than they could pick up a movie or video game with the same content. I started to read ASOIF when I was 13, it would have been extremely difficult for me to actually be able to see a movie that had the same amount of sex and violence. Now, I'm not saying that it should have been easier, but that's because of my parenting more than anything else. As a matter of free speech, I personally don't see any difference between the word and the picture. The picture just requires less effort to understand or see the scene. This is not a reason to segregate a section of material. Additionally, in Lawrence Lessig's Code 2.0 he describes an author that writes stories that are violent and sexually violent towards women. This author was arrested and charges were pressed against him. He was acquitted as he was protected under the first amendment. We need to be aware that no matter how much we don't like these images or words that we can't make them illegal. Our founding fathers fought for our freedom to allow us these rights.
So, video gamers rejoice! We have won a great victory, one that will hopefully set a precedent which will protect video game writers, artists, coders and everyone else involved long into the future.
Actual Ruling: http://www.supremecourt.gov/opinions/10pdf/08-1448.pdf