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>Tip: Spinning out of Control
>As companies consider spinning off subsidiaries or divisions (read: developers), generally in an effort to get a cash infusion or to sell off an underperforming portion of its business, it is important to remember that this transaction is not the equivalent of wrapping a red ribbon around a box and handing it off to a buyer.One of the most important issues to consider when separating two companies (whether sister entities, parent-child, or just a division) is to determine “what stays” vs. “what goes.” A classic example: who owns the development tools? Often, the development tools are used by both the parent and the division — do they both get to use the tools after the separation? What about the source code of the development tools? Are there development libraries, stock animation or photographs, or sound effects? “What stays” vs. “what goes” often turns into “who owns” and “who gets a… Continue Reading
>Tip: File Early. File Often?
>Want to be the first to hear about a new game? Just monitor the filings at the U.S. Trademark Office. Smart game companies know that it’s important to apply to register the IP associated with a new game even though the game itself is still in secret development. Otherwise these companies risk unpleasant surprises down the road, such as someone else filing the trademark or registering the domain name. Failing to take appropriate steps to protect IP early enough can result in costly changes late in the development and marketing stages of a new game. So, who’s filing these early applications? Well, Activision-Blizzard, the publisher behind Guitar Hero, has just filed a trademark application for “Sing Hero” for “interactive video game programs.” Or, check out the newest application for “Your Game Here” from Take-Two Interactive, publisher of the Grand Theft Auto series. Their new trademark for “Your Game Here” is… Continue Reading
>Fight for your Rights
>In my last post, I talked about the value of protecting the intellectual property in your characters. In this post, I want to talk about the other side of the negotiating table: where you are asking for permission to use someone else’s intellectual property.When you are becoming a licensee of someone else’s intellectual property, a common mistake is to negotiate only for the rights you think you need today. With the rate at which technology changes, getting a limited license today ends up meaning that you are re-negotiating tomorrow. And, re-negotiating generally translates into “pay more money.” So, make sure that you think about rights to do DLC, expansion packs, sequels, spin-offs, movies, toy lines, DVDs, machinima, books and merchandising (and more). If you don’t ask for it and get it, chances are you’ll have to, ahem, re-negotiate.
>Master Chief is Back! (Sort of…)
>Ok. I admit… the headline is over the top. No one has announced a Halo 4 (yet?), although The Halo franchise development director Frank O’Connor was quoted as saying “I doubt we have seen the last of Master Chief.” So, why do I bring that up? I want to highlight a different facet of intellectual property protection. The name “Master Chief” resonates with consumers, as well as pictures of the iconic character, and both the name and photographs are available for intellectual property protection. In fact, if you search the Copyright Office web site and the Trademark Office web site, you’ll find filings for each by Microsoft. Sometimes the focus on protection is on the guts of a game (e.g., the code, the trade secrets) while losing sight of protecting the intellectual property that faces your customers. Filing for copyright and trademark protection on elements of the game may be… Continue Reading
>Tip: Buy Me!
>Seeing the news reports of acquisitions brings to mind some issues that we commonly see during the buying and selling of technology companies. Before a potential purchaser will buy the company, they will most likely do an analysis of the innards of the seller. Does the seller have any contracts? Are the workers signed to employment agreements? Has the seller done anything to protect the intellectual property (e.g., filed copyrights, patents, trademarks?) If not, why not? And, what routinely happens is that the less actions that the seller has taken up to the point of the potential acquisition, the more downward price pressure that the buyer is able to exert.And I know I’m not saying anything earthshattering, but the value of a video game company generally comes down to two things: (i) the intellectual property assets and (ii) the people. So, to all of those fledgling game developers out there,… Continue Reading
>Ninth Circuit Declines to "Boldly Go Where No Court Has Gone Before"
>Proponents of free speech through the arts earned a victory on February 20, 2009, when the United States Court of Appeals for the Ninth Circuit confirmed a California district judge’s 2007 ruling that a California law that restricts sales of “violent video games” to minors is unconstitutional.Chapter 638 of the Statutes of 2005, otherwise known as “AB 1179,” was passed by the California state legislature in October 2005. AB 1179 imposes restrictions on the sale and rental of violent video games to anyone under the age of 18. The act defines a “violent video game” as, among other things, making available the option of “killing, maiming dismembering or sexually assaulting” a human or substantially human game character if doing so appeals to a “deviant or morbid interest of minors” or is done in an “especially heinous, cruel, or depraved” manner. Such games must also be labeled with two-inch by two-inch… Continue Reading
>More on Games and the Economy
>GameStop game out with its sales information for 2008. The game store had a 24 percent year-over-year increase, with sales of $8.8 billion. GameStop is expecting sales growth of 10% to 12% in 2009 and anticipates opening more than 400 new stores. In my previous post on the economy, we were using the sales numbers for one of the largest publishers of video games. With the release of these numbers, GameStop is also saying that it expects to outperform the retail sector in 2009.What I wonder about these sales numbers is the impact of used game sales. Publishers certainly like to keep the life of the game as prolonged as possible, and used sales can certainly help in that regard. On the flip side, a used game sale puts money into GameStop’s coffers and not into the coffers of the publisher/developer, which can lead to efforts such as what Epic… Continue Reading
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