There were a number of interesting news tidbits this week, ranging from EA’s decision to take a severe Big Brother approach to piracy protection with the upcoming “Mass Effect” and “Spore” PC releases, to the drama between Take Two and the City of Chicago Transportation Authority regarding the removal of $300,000 worth of advertising for “GTA IV,” in response to standard fare, violent game fear-mongering. But the most interesting story is Microsoft’s new game building functionality from Popfly for its Silverlight rich-media platform.

When it comes to massively multiplayer online games (MMOs) and market share, it’s pretty clear that “World of Warcraft” is king. Its subscriber base is bigger than all its top competitors combined, and its lead seems to grow more every month. But although “WoW” has the biggest player base, this week there was a low-profile announcement that could fundamentally change the way MMOs are played.

As the excitement ramps up for the upcoming release of “Grand Theft Auto IV,” one has to wonder at the insanity of the Take-Two vs. Electronic Arts debacle. The plot surrounding the affair seems almost crazy enough to be straight from the GTA franchise itself.

A week from Tuesday, “Grand Theft Auto IV” hits the stores, and it will be one of the biggest pop culture events of the year. Analysts predict it will sell roughly six million copies in the first week, smashing “Halo 3″’s current sales record, and potentially becoming the biggest entertainment release in history (unseating “Pirates of the Caribbean 3,” which currently holds the record at $404 million in the first week).

Part of the reason in-game advertising is seen as a medium of interest is because it provides potential access to a hard to reach demographic: the core gamer. However, the games for which in-game advertising fits appropriately are few. There are many games that take place in fantasy or sci-fi worlds, where a contemporary advertisement just doesn’t work. How then, to reach the gamers that play these games? There are two places that offer a decent chance of reach. Game news and review sites are a surefire destination for core gamers, and have partnered well with advertising. The other is currently lacking in sufficient ad optimization: game-related social media.

Paramount recently became the second studio (after Warner Bros.) to pursue video game publisher ambitions. Yesterday in Variety, Sandi Isaacs, Paramount’s senior vice president of interactive and mobile, and Matt Candler, Paramount’s new vice president of interactive development, discussed the company’s move into the interactive entertainment business: “We are entering into deals now where we will be publishing games this year,” Isaacs said. “There’s going to be a slate where in some cases we’re publishing, in some cases we’re co-publishing, or in others we’re funding development and another publisher buys it. It’s important for us to have a flexible model.”

Harmonix released some incredible numbers this week about its title “Rock Band,” reporting that there have been over six million songs purchased as downloadable content in the three months since the title’s release. This roughly compares to the sales figures seen by iTunes in its first few months.

The big news in the gaming world this week is the Xbox 360’s massive price cut in Europe, bringing the cheapest Xbox model’s price tag below even the Wii’s. The conventional wisdom is that Microsoft is looking to protect its lead over Sony with this move. One analyst predicted that the European price cut could boost sales of the consoles by 20%.

Wow. The iPhone SDK conference was yesterday, and what was shown was precisely what every iPhone user, iPod Touch owner, or mobile developer wants. The fact that executives from both EA and Sega were brought in to speak confirms that Apple is betting on iPhone gaming as a big share of its application library.

This week in the U.K., a select committee of Parliament heard testimony from John Carr, executive secretary of the Children’s Charities Coalition for Internet Safety, suggesting that in order to prevent people from playing video games too long, game designers should “dis-incentivise” long-play sessions by allowing players to achieve the top rewards of play early on in the title’s lifecycle.