I think this is a good lawsuit. The kid isn't asking for $5000 for pain and suffering, he just wants his money back and to set a precendent.
It doesn't matter what he says, when you start limiting free speech, you start moving toward fascism. If he wants to rant on and on with a bunch of racist rhetoric, so what. The funny thing about the video games I enjoy is that the morality of them allows for the simulated murder and mayhem, but don't call anyone a name... It's utterly ridiculous.
I agree with the comment about the Entitlement generation, but I have to add that I'm really sick of the Victim generation. To me, beating up an old man or a white guy if your white or a gay man or black man or a dog or a kid or woman is all the same. It's all hate. It's all violence. Calling one of these scenarios a hate crime is like distinguishing crimes based on bullet size. It's just nonsensical. It's all the same. If you're beating someone up, you're wrong. I mean unless it's the guy that raped your kid or something, then it's justifiable homocide. But if its just an argument or an aggression, it's all immature lack of self control and anti-social bad behavior.
But if I want to say things about your mother, your wife, your kid, your life, your religion, your political point of view, your diet, your ideas, your face, your race, or anything I want to say, then its freedom of speech. I mean, unless I'm specifically stating that I wish to do harm to someone, who cares what I say? Sticks and stones don't you know? Only a weak-minded person is going to be trolled. Everyone else looks past it, by either being shocked and moving on or ignoring it an moving on. Only an immature child reacts to verbal expression.
Whatever this guy said, he should either be sued in criminal court for slander, libel, or threats of violence, or he should get his money back and the gaming companies should take note not to mess with laws of the United States of America. The same goes for Gaming Servers. They might think that it's a private property, but by law it is a service to the general public unless it is always locked by password like a private club would only allow certain paying members to enter. Otherwise, it's a public area. And once again, simulated murder completely trumps some silly little racist comment or trivial insult. Even a child would know the difference. The problem is that almost all human beings are followers and everyone is following everyone else's butts so close that they can't even realize the obvious truth that violently killing your oppoents to the point that their bodies are exploding is far, far, far, far, far, far worse than some verbal statement no matter how horrible it is unless that statement is by law illegal. Being racist is not illegal. It might not be a mature attitude, but its still a person's right to be ignorant and despise other people for being different. Murder however is illegal. It's pretty obvious to even a small child which of the two are worse.
I say, give this kid his $55 back and tell the gaming community to stop crying like little girls everytime someone says something derogatory.