WHEN PUBLISHERS WON’T LET GO SIGNING AWAY RIGHTS TO FUTURE GAMES

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Steve RubinLaw Office of Stephen Rubin

stephenrubin.com

Preliminaries

» The lecture as speed dating » The Disclaimer » Cell phones/silent Questions/at

end Evaluations/please hand in

Old World» Publisher is principal source of

independent developer funding and distribution

» Publisher takes game ownership in exchange for recoupable advance against potential royalties

» Publisher ownership gives developer the opportunity - but not the right - to make derivative works based on the game

» Limited developer options make publisher/console exclusivity relatively attractive to developer

New World» Transition from boxes to bytes –

broadband access and downloadable content transform game industry

» Publishers lose monopoly on funding» Casual end of game spectrum

increasingly viable - games less expensive and take less time to make

» More distribution channels open up» Publishers remain reliant on independent

developers for ground-breaking games

New World» Effect on game ownership

Publisher has diminished bargaining power to demand game ownership

Developer has more options to exploit derivative works such as game sequels and expansion packs

With more ways to exploit games ownership has greater practical value to developer

Publisher Response» No longer insists upon publisher

ownership of the game » Locks up future rights to derivative

works such as sequels and to new games, thus limiting use of ownership rights

» Demands confidentiality, exclusivity and non-compete to go with first review rights

The Rights Clauses» Right of first look» Right of first offer» Right of first negotiation» Right of first refusal» Right of last refusal

How It Works» Publisher finances game on

condition that developer work exclusively on game, not disclose the game during development, and after development not compete by making a similar game

» Developer is tied up until game releases, but developer has no funds to carry over to next game

» Publisher gets back previous leverage over developer

How It Works» Publisher now has leverage to

decide whether to do next game on publisher’s terms

» While still “owning” game, developer has little option but to sign on for next game with same publisher

» Conversely, publisher has no obligation to sign on with developer for next game

The Other Side» Publisher with whom developer

currently works often best opportunity for future work

» Rights clauses such as first look may be beneficial to both parties

» Other rights like first negotiation worthwhile if properly limited

» Rights clauses such as last refusal are abusive, but rarely imposed

Questions?

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