Haha... wait, you're serious?
On that last point... yes, my business model does include developing AI to the point that it's not necessary to employ other people. I doubt very much that I'll be the first to get there (especially as I have to do a lot of other stuff to keep the money coming in and only write the AIs as needed), but I'm sure going that way.
Ubisoft are not the first company to do this. My previous employers, Jagex, launched a games portal about two years ago where all the games required a continuous internet connection... including the single player games.
I'm not going to compare and contrast the technical details, as I don't know Ubisoft's secrets and I'm still bound by a confidentiality clause from Jagex. The social effects, however, are discoverable from publicly available information from multiple online game providers, not just Jagex, and are therefore not something I have to keep silent about
Lots of people are using jaywalking as an example non-crime in these comments. Just so you all know, jaywalking is not generally against UK law; the only places you can't do it are motorways (where anyone going less than 50mph will cause problems), railway crossings while the barrier is down, and small patches of road next to lit pedestrian crossings. Everywhere else, it's your judgement.
Now, for the technology itself, I think it will help catch a lot of minor criminals, rural fly-tippers, and an unexpectedly large number of farm-animal-fancying zoophiles, but it will have very little effect on organised crime. Why? Dazzle from small lasers. What's the cost of a CD/DVD burner?
I don't like perfect surveillance - this country has too many laws for any one person to know, so I have no idea if I'm breaking any or not.
Oops, I didn't mean to post that anonymously... brief summary: all big games companies seem to have this problem, even those that try very hard to avoid it. I blame the middle managers. I left Jagex because of a middle manager being extremely unpleasant, despite the considerable efforts of the senior management to make the company an awesome one to work in.
What makes a contractor any better or worse at managing information than the government itself?
In principle? The bottom line of government is the best interest of the nation, the bottom line of bussinesss is profit. In practice, of course, a democratic (small 'd') government cares about being popular, so it has to keep taxes low and employment high (i.e. buy from the lowest bidder based in their own country).
It's not a question of cryptography, it's a question of accounting. Consider:
If the game is written badly, it will let Alice get away with this. If the game is written properly, the server isn't listening to her client, and will only let her spend 10gp no matter what her client claims to have. For reasons of supply and demand, I am sure that every MMOG that has ever suffered from gold farmers is written properly in this regard.
The UNIX philosophy basically involves giving you enough rope to hang yourself. And then a couple of feet more, just to be sure.