In brief 3 min read
Video games are bigger than ever before, and IP is at the centre of it all. From Nintendo to esports, gaming has put on a masterclass, demonstrating how leveraging and protecting IP is a key companion to reaching audiences beyond the controller.
- Implementing a sophisticated IP strategy has been crucial to the growth of the video game brands into markets beyond the gaming industry.
- Esports generate significant revenue through a complex web of licensing arrangements relating to the merchandising, marketing and broadcasting. Nintendo finds new ways to reach its fans, including by partnering with big brands such as Lego.
- The video game industry is attractive to sophisticated pirates engaging in digital counterfeiting and fraud. Enforcement of IP and innovative technologies are key to protecting the industry's growth.
Marketing and branding teams, legal teams.
The video game industry is booming and is becoming larger than all other entertainment industries combined, with the global gaming industry projected to generate approximately $US160 billion this year.
The proliferation of free-to-play games with in-game purchases has ensured a broad consumer reach and generated massive revenue for game developers. Free-to-play formats and the reliance on the developers' servers for online play mean developers are winning the war against traditional pirates that try to copy games outright, but developers now need to protect their monopolies over in-game microtransactions in order to protect and grow their revenue stream.
Sale of 'grey market' digital gaming currency and loot (often by frauds) reduces developer income and is a key threat that needs greater attention. Developers have explored linking ownership of in-game items to specific gamer profiles and implementation of blockchain technology, but so far 'grey market' sales both legal and illegal are still rife. This is an example highlighting the challenges facing rights holders, where legal rights alone cannot flush out counterfeiting conduct, and there is a need for it to be coupled with innovative technology.
While gaming has been a growing part of popular culture for years, the rise of esports has taken that popularity to the next level, opening a world of new possibilities that are not just for gamers.
As per traditional sports, esports involves broadcasting rights, advertising rights, merchandising and more, with participants ranging from esport bodies, game developers, teams, players, influencers and sponsors. Worth approximately US$1 billion per year and growing, esport is becoming big business and broadcasting, sponsorship and merchandising deals are a major opportunity for those inside and outside the industry to capitalise on the hype. The broadcasting, sponsorship and merchandising opportunities are an excellent example of the industry leveraging intellectual property rights in order to generate revenue from, and control the quality of content presented to, the masses.
Nintendo's recent partnership with Lego is the perfect example of a symbiotic relationship between a gaming company and a big consumer brand. Nintendo gets to tap into a whole new base of consumers (and revenue) in the world of Lego, while Lego gets to feature the world-famous Mario to drive sales of its products.
With video games now accessible across all demographics, game developers have an opportunity to generate new and additional revenue streams from their customers. In recent years, game developers have increasingly sought to expand the scope of protection beyond video games for hallmark franchises into other sectors, to match ever-expanding commercial partnerships in non-game-related sectors.
This trade mark strategy, which involves trade mark protection for its key franchises in all manner of goods and services (including, among others, clothing, food and kitchen utensils), highlights how a trade mark portfolio can be leveraged to deliver income for the trade mark owner from beyond the screen.
- Consider reaching consumers in new ways based on your existing products and services;
- review and consider the potential IP rights in your business that can be protected and leveraged to help deliver new revenue streams; and
- obtain protection to cover material gaps.