The Twitch DMCA Crackdown and You

In the past few days a huge number of Twitch streamers have reported getting hit with Digital Millennium Copyright Act (DMCA) claims by the Record Industry Association of America (RIAA) for unlicensed use of music on their channels. Twitch has confirmed that they’ve been subject to a “mass” DMCA claim, the first of its kind they have ever received.

Twitch Repeat Infringer
While until now many streamers got by using copyrighted music without any issues, it looks like the RIAA has gotten more serious about policing this stuff.

It’s not clear why this is happening now, but I like world’s-most-famous-game-lawyer Ryan Morrison’s theory that this all came about because a bunch of music industry lawyers stuck at home during the quarantine heard copyrighted music on Twitch streams their kids were watching.

Morrison Tweet

Whatever the actual reason behind this new crackdown may be, I thought I would put this post together providing some DMCA basics for anyone interested in the legal issues behind the takedown notices, and what they can do in response.

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What is the DMCA?

Legislation passed by the US government 22 years ago governing how copyright works on the internet. The most important thing about it for our purposes is its “safe harbor”  provisions.

These provisions basically protect sites that allow users to upload and share content with others, like Twitch, from liability for copyright infringement. Without these provisions, in theory, whenever someone uploaded infringing content to Twitch, the site could get sued directly for copyright infringement in respect to that content.

Given how much copyright infringing material gets uploaded to Twitch on a daily basis, without these provisions it would take approximately 0.24536 seconds for Twitch to get sued into oblivion, so this safe harbor protection is absolutely crucial in order for Twitch (along with about half of the sites on the internet) to continue functioning.

In order to keep this protection, however, sites like Twitch have to comply with the DMCA’s “notice and take down” system, which basically means responding to DMCA notices from rights holders by removing infringing content, and taking action against ‘repeat infringers.’

That’s basically the TL:DR for the the DMCA safe harbor system, and the ultimate reason why, if you’re a streamer, you may have woken up today with a strike on your account for playing a random 50 Cent song on your stream two years ago.

Is this Twitch’s fault?

Not really. As discussed, Twitch has no real choice in the matter. If they get a takedown notice they have to enforce it or lose their safe harbor DMCA protection.

It’s also worth noting here that Twitch has no role in reviewing a DMCA takedown notice and determining whether it’s legitimate or not. If they get a notice they have to enforce it. Any issue regarding whether the notice is valid is between the rights holder and the uploader (more on that later). The only thing Twitch can do when it gets a DMCA notice is take down the content.

Please keep this in mind when talking to Twitch staff (who I would guess are probably as angry as you right about now about having to deal with this). This stuff is mandated by federal law, it’s not some internal Twitch policy they can waive, so they are not lying to you if they tell you there’s nothing they can do.

So if I get a DMCA notice against my channel what can I do?

You can send a DMCA counter-notice to Twitch. A counter-notice basically requires you to declare, under penalty of perjury, that you have a good faith belief that your content was wrongfully removed. If you send this notice, Twitch has to re-instate the content within 10-14 days … unless the rights holder files a lawsuit against you (that’s a pretty big “unless”).

Filing a counter-notice can be dangerous because it basically puts the rights holder in a position where it has to sue you if it wants to get the content taken down again. I suppose it’s possible that the rights holder may not want to deal with the expense or bad PR of suing you, and will essentially let the matter go, but, generally speaking, trying to play a game of legal chicken against a giant multinational corporation with limitless legal resources can be a very bad idea, so please, PLEASE think carefully and get some legal advice before filing a DMCA counter-notice.

What about fair use?

Unfortunately, just like it doesn’t render fan games legal, fair use isn’t going to be of much practical use to anyone in this situation.

First, while there are some potentially helpful decisions are out there, there’s no case law that I’m aware of that unambiguously establishes that use of copyrighted music on a stream constitutes fair use. Also, if someone is making significant revenue from from the stream at issue, I expect making that argument would be an uphill struggle.

Second, fair use is a legal defense that only comes into play after infringement is established. Thus, the only time it would really become an issue is if you’ve already been sued, and since the RIAA is probably not going to take an enlightened and charitable approach to conceding this kind of issue, if you wanted to establish fair use you would probably have to spend years and God knows how much in legal fees proving it in court. At that point, even if you win….well, google “pyrrhic victory.”

What if I have a license for the song from Spotify?

This doesn’t matter. Licenses from Spotify or other streaming music providers are generally only for personal use. They don’t let you use the song for a commercial purpose or play it for the general public, which means you can’t use it on your stream.

Fun fact: you also don’t have a license to use songs on a game’s actual soundtrack for commercial/streaming purposes. That means that if you play a game on stream you could potentially get a DMCA notice because of the game’s own soundtrack. Such is the world we live in.

But I’m not based in the US, does the DMCA affect me?

Yes it does. The DMCA takedown requests are sent to Twitch, not you, and Twitch is subject to US law. Twitch has to take down the allegedly infringing content regardless of where the owner of the account at issue lives, thus living outside the US basically makes no difference for these purposes.

So there’s not much I can do?

Not really, short of writing your congressman.

A lot of people have written about how the system is flawed and overdue for a rework, especially since it was put into place 22 years ago (basically forever in internet years), but until that happens there’s not much way around its requirements. Unfortunately, in the words of Donald Rumsfeld, you work with the DMCA you have, not the DMCA you want. I guess one thing to keep in mind is that, imperfect as it may be, if someone ever started using your content without your consent, you’d want something like the DMCA in place too.

So what if I want to use music on my streams?

There are lost of services out there that offer fully-licensed, legal music specifically aimed at streamers. These services aren’t going to have the same songs you hear on the radio, but often times the music is a decent selection, and a hell of a lot better than nothing. I’m going to plug Vancouver’s own Monstercat here, who offer a plan letting you use most of their library for streaming purposes for the not-unreasonable sum of $5/month.

DISCLAIMER: Nothing in this article creates a solicitor-client relationship between us or should be interpreted as legal advice. Any legal information provided in this article is a statement of general principles only, and the application of the law to a particular situation is  something that needs to be considered in light of each individual’s specific circumstances.

The LEC “tax scandal” and the distinction between employees and contractors.

Recently a YouTube video by Richard Wells, founder of H2K gaming, talking about a LEC “Tax Scandal” has been making the rounds:

The video opens up with some ominous music and allegations that this would be “the biggest shitstorm of all shitstorms to hit League of Legends,” so I got my popcorn ready expecting to hear hear some shady, shady stuff. Unfortunately, I was a little disappointed. The TL:DR of the video is this:

Back in 2013, when the LEC was just getting off the ground, Riot provided teams joining the league with a template player contract they could elect to use. The template stated the players were independent contractors, not employees. All the teams in the LEC used the template, and thus may have misclassified their players as independent contractors for a few years. As a result, they may now be liable for failing to remit taxes on what they paid the players to the German government.

To understand why this is an issue we need to go into some basics on the distinction between employees and independent contractors. The general idea is that independent contractors are more like ‘outside hired help’ and a company has fewer obligations towards them than they do to their employees. A few of the key differences between the two in most jurisdictions are:

  • Employees are subject to employment standards legislation (covering things like minimum wages, overtime, sick leave, occupational health and safety, etc.). Contractors are not.
  • Employees are generally entitled to participate in any benefit plan the company offers. Contractors are not.
  • Employees are (in some jurisdictions) entitled to severance if they are let go by the company. Contractors are not.

And, most important for our purposes:

  • Companies generally withhold employees’ taxes on each paycheque and remit the taxes (as well as deductions for things like employment insurance, contributions to programs like social security, etc.) directly to the government. With contractors they do not. Companies pay contractors a lump sum for their services, without any deductions, then it’s on the contractor to pay their own taxes and other remittances.

As you might expect, generally companies prefer to hire workers as contractors instead of employees, as doing so places fewer obligations on them. Of course, this is not as simple as just drafting up an agreement that calls someone a contractor (if it was, no one would be an employee). Regardless of what a legal agreement may say, the authorities will generally look at the nature of the actual relationship between a company and a worker to determine if a worker is contractor or an employee. The factors they look at vary from jurisdiction to jurisdiction, but they include things like:

  • how much control the company has over the worker’s activities, and how integrated they are in the company’s operations;
  • whether the worker is financially dependent on the company (i.e. is this their only income source or one of many sources);
  • does the work they perform fall within the scope of work generally performed by the company; and
  • does the worker provide their own equipment or have their own independent chance of profit/risk of loss;

The distinction is not always easy to make. If a company hires a SEO consultant to do a few hours of work a week on their site they’re probably a contractor. If they hire them full-time as the company’s head of marketing, they’re probably an employee.  But what if they hire them to work from home for 20/h a week and they continue to work with other clients on their own time? The answer in situations like these gets a bit murkier. That’s why a lot of the time the issue of whether someone is an employee or a contractor is not clear-cut, and needs to be determined on a case-by-case basis.

So what’s a company to do if it doesn’t know whether a worker should be classified as a contractor or employee? Well, in theory, they should look at the case law and the details of the specific relationship with that worker and try their best to make sure the classification for that worker is correct. In practice, they often err on the side of calling them contractors. After all, there’s no real way to know for sure until the tax authorities come knocking, and often the authorities don’t in fact come knocking in any event, so they take the risk.

What happens if a company is wrong, and classifies a worker as a contractor when they should have been an employee? The laws vary but in many jurisdictions they have to go back and remit everything they failed to pay, including back-taxes, contributions to things like employment insurance, national pension plans like social security, etc, as well as pay some kind of penalty.  It looks like the LEC teams may have, knowingly or unknowingly, taken that risk here, and if the German tax authorities come calling and determine their players were employees they could potentially be looking at some liability in line with the above (though I can’t really give specific info on German law).

With that context out of the way, I had a look at the video and there’s a few points I think are worth making.

1. This kind of thing happens all the time.

As discussed above, companies classifying workers as contractors even though they’re not actually sure they are is not anything new, either in esports or in other fields. Indeed, most esports player contracts I’ve seen classify players as contractors. The obligations associated with hiring someone as an employee are often too onerous, especially for new orgs, and in many cases the relationship between the company and player is defensible as an independent contractor relationship. The issue of whether esports athletes are independent contractors is actually still something that’s being discussed among lawyer-types. The Esports Bar Association even wrote about it in their inaugural journal.

The fact that something is common practice doesn’t make it right, of course, but it’s not like anyone in the LEC was fixing matches, doctoring financial records or sneaking into offices after-hours shredding incriminating documents. Yes, if the teams were wrong about classifying players as contractors they may be looking at some penalties from the German tax authorities, but to me this doesn’t really qualify as some deep, dark secret that would be “talked about only in hushed tones, behind closed doors” as the video states. To be honest with you, I would have been much more surprised if the LEC’s players weren’t classified as independent contractors, at least in the league’s early days.

2. The players’ status is not as clear-cut as the video claims.

The video states pretty unequivocally that if someone works in Germany for 6 months and 30+ hours a week they are considered an employee under German law. While I’m obviously not a German lawyer, that’s not correct as far as I understand. As set out by a memo Richard had his own lawyer put together, the courts in Germany, like the courts in most jurisdictions, take a more holistic approach to determining whether someone is a contractor, looking at a wide number of factors in keeping with the discussion above. It looks like 6 months/30+ hours per week criteria applies to whether someone is a German resident for tax purposes and needs to file taxes in Germany, but this isn’t relevant to whether they’re an employee or a contractor.

This isn’t to say that the LEC players aren’t employees – there’s a good case to be made that they are – but no German government body has made a decision on the issue. Richard has provided a lawyer’s opinion that states that they are, but an opinion is just that – an opinion. I’m sure Riot’s lawyers would be happy to provide an opinion that states the opposite. Until there’s an actual decision on this by a court or administrative body, no one really knows for sure. Thus, the video is overstating things just a weeeeee tiny bit when it states that it’s been “confirmed that the contracts are completely illegal.”

3. Some of the blame for this falls on Riot.

Riot put together the template contract that caused this whole problem, and it appears from the video that when providing it to the teams they didn’t advise them about the finer points of the employer/independent contractor distinction, and the risks associated with designating someone as a contractor.

Of course, the teams could have gotten their own legal advice, but anytime you’re preparing a legal document for someone else to potentially use, even if the document is just for “informational purposes,” that’s a bit of a touchy situation. If the German tax authorities come after the LEC teams for this, I wouldn’t hold it against them if they turn towards Riot and ask them why they’re in this mess because of their contract template. If they do, I don’t know how credible it’s going to be for Riot to say “well, we never meant for you to actually use the things.”

Whether Riot could actually be legally liable to the teams over this I don’t know, but this is certainly not a good look on them. They were the proverbial ‘adults in the room’ when the league was starting up, and had legal resources that dwarfed those of the LEC teams.  If there’s anyone who should have made sure this issue was handled at that time, it’s them.

TL:DR

So is this a big deal? Well it’s potentially a deal – we’ll see if this gets any media attention and if the German tax authorities investigate further as a result. However, it wouldn’t surprise me if this was something they already looked at. Remember, all the players would (or should) be filing individual tax returns with the German government as independent contractors, so it’s not like this is some secret no one but the teams knew about until now.

However, while this may be a problem for the LEC, is it a massive scandal and a “Nuke dropped on the LEC/Riot’s head” as Rich tweeted recently? In my opinion at least, probably not.

 

Blizzard Starting to Shut Down Hearthstone Fan Leagues – How Will Community React?

The news recently broke that Blizzard is forcing the United Hearthstone League to shut down. If you haven’t heard of the United Hearthstone League, don’t feel bad, most people haven’t (including me before today). It’s a tiny operation that doesn’t compete with Blizzard’s events in any meaningful way. It has a Discord with 100 members, a Youtube channel with 51 subscribers, and no prizes or sponsors as far as I can tell. It looks like it’s run by a bunch of fans who aren’t making any money off it, and are doing it just because they love Hearthstone.

Nevertheless, the UHL’s commissioner, Mike Lowe, reports receiving a call from Blizzard earlier today letting him know the UHL has to cease operating as a league or using the word “League” in its title (he was informed they can still hold monthly tournaments). Presumably, the overt or implied threat was if the UHL didn’t comply it would face a lawsuit from Blizzard. He was told that no league could operate independently of Blizzard, regardless of whether it’s for profit or not, so anyone else looking to operate a fan league like UHL is basically in the same boat. The story is actually the same a across all Blizzard titles (if you don’t believe me try running any Overwatch event with “League” in the title and see what happens.)

I’ve talked about this before, but this is the direction all esports are heading. Unlike traditional sports, with esports game companies literally own the game being played, and have the ability to legally stop anyone else from doing anything esports-related with their titles. A few years ago, when esports were getting off the ground, the companies were content to let anyone host events or leagues more or less as they wished, because this was good for development of the scene. Now, as esports becomes more established (and more money is involved) that’s starting to change pretty quickly.

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My photoshop skills aren’t great, but you get the point.

I remember talking with this with a friend in the industry a few months ago, and telling him that’s the way things were headed: as more money started being made, game companies would start to monopolize the right to hold all major tournaments, and any independent outfits (like the UHL) would get shut down. His reply was “well no, if they did something like that, the community would go crazy.”

Well, they’re doing it. And for the first time people are noticing (well by people are noticing I mean that Mike Lowe’s tweet about this has been at the top of /r/hearthstone all day with 3,500+ upvotes, and a couple of smaller sites have picked up the story). What I’m curious to see now is what happens next. Will this snowball and become a huge controversy like my buddy predicted, or will the story fade gently into the good night over a couple of days?

My hope is that it’s the former, if only because, as I’ve said before, I think game companies monopolizing everything this way is ultimately bad for esports. What’s Blizzard’s incentive to improve Hearthstone as an esports product if they can literally sue any competitor out of business anyway?  However, as it stands Blizzard has every legal right to do what they’re doing. The only thing that can be reasonably expected to stop them, and affect how they approach this issue in the future, is a nice, loot-box sized controversy. I don’t usually cheer for the reddit ball of hate to crush all in its’ path, but, well, fingers crossed time around.

Your Guide To Vancouver During The International

As pretty much everyone reading this already knows, for the first time ever The International, the world’s foremost esports tournament/giant nerd convention, will be held in Vancouver, Canada, instead of its customary home of Seattle.

So pretty!

Since Vancouver is my hometown, and for the past 3 years I’ve actually lived literally across the street from Rogers Arena, where The International is being held, I thought I’d be in a good position to write a little guide for the area for those heading in from out of town. So without further ado, here’s my guide for where to eat, drink and hang out during The International.

Fast Food Near The Arena.   Due to the location of the arena, your only practical option for finding fast-food within walking distance is to exit on the North Side and head down Abbot Street. Some good places you’ll find in this direction:

  • Tako, a really good Korean/Mexican fusion fast food place directly across the street from the arena, whose business is probably going to triple for the duration of the tournament.
  • If you’re looking for Pizza, about half a block down Abbot street on your right there’s a pizza place named Uncle Fatih’s. Do not go to the Fresh Slice across the street. It is objectively worse and I have no idea how they’re still in business.
  • About one block North of the arena on Abbot street there’s a mall/cinema called Tinseltown/International Village. On the second floor there’s a food court (it’s not great, the highlight is the Sri-Lankan place on the South end), as well as a couple of bubble tea places. Crucially, this is probably the closest place to the arena to get bubble tea.
  • If you’re willing to a bit of a longer walk, go about 2 and a half blocks down Abbot to Taco Mio, the closest good Mexican fast food place to the arena. For desert you can get some fancy ice cream at CaoCao 70 next door.
  • If you’re wiling to take a longer walk, 3 blocks North and one block West there’s Meat and Bread. As the name suggests, this place basically serves only sandwiches. It only has 2 or 3 options any given day, but it does them really well, and is probably the best quality fast food you’re going to get within reasonable walking distance of the arena. I would not go between 11:30 a.m. and 1:30 p.m. because half of Gastown goes there for lunch, and the lineups get ridiculous, but if you’re going a bit later in the afternoon it’s worth the walk. If you do get there and the lineups are too long, or you have vegetarian friends with you, there’s a very good Malaysian place called Fresh Bowl next door.
  • If you’re a vegan, head 1 block North on Abbot street, then about three blocks East down Keefer until you hit Main St. There’s a very good an all-vegan pizza place called Virtuous Pie there (yes, I hate that name too). If your meat-eater friends want some protein, there’s a also a fried chicken place called Juke nearby.

Sit-Down Restaurants/Pubs. If you’re looking for more of a sit-down restaurant experience or a pub, your best bet is to again head a few blocks North of the arena into Gastown. Gastown famous for being Vancouver’s “hippest” neighborhood. I put “hippest” in quotes because the fact that it’s known as a hipster neighborhood attracts a lot of visitors, which gives it a touristy vibe and drives up prices, meaning all the hipsters actually live in other parts of town like Commercial Drive or in Kitsilano. Regardless of its level of true hipster street cred, the neighborhood probably has the most good pubs/restaurants per capita of any place in Vancouver, and if you’re going to go eat or drink close to the arena it should be here.

Small note – Gastown is right next to (well technically part of) Vancouver’s notorious Downtown Eastside, one of Canada’s worst neighborhoods in terms of drug addiction, mental illness and homelessness. It’s not really dangerous per se, but head a couple of blocks East of Abbot (anywhere past Columbia St.) and, well… you’re gonna see some stuff. You’ve been warned.

In terms of where to eat in Gastown, I would simply go down Abbot street until you hit Water St. then have a look until you find something you like. Your best bet is probably to head East to to giant runabout with the Gassy Jack statute (a dude standing on a barrel), as most of the good places are in that area.

See below for a handy little map of Gastown (the green area), the parts you should maybe avoid (the red area), as well as a path you should maybe follow along Keefer St.

Marius Adomnica | The Patch Notes

A few places that I would recommend in the Gastown area:

  • Tacofnio. Really good, laid-back Mexican place that’s super popular. Try the fish tacos.
  • Peckinpah. If you want BBQ this is the place to go (they even make their own sauces). Sometimes they have a Montreal smoked meat sandwich as a special. Please, please, please ask them about this, and if they do 1. Order it, and 2. message me on Twitter so I can come down and get one too.
  • Irish Heather/Blarney Stone. I’m putting these together because they’re both Irish pubs and they’re right next to each other. The Irish Heather is the more upscale one. They even have a Shibeen (I believe that’s the fancy Irish word for “whiskey drinking place”) in the back, and a whiskey menu with like 400 options. The Blarney Stone is the more fun one where all the college kids go. The choice is yours.
  • The Diamond. You want fancy cocktails and an upscale, exclusive atmosphere? They have fancy cocktails and an upscale, exclusive atmosphere.
  • Six Acres. Laid-back, hipstery place, with really good vibes. If you’re looking for a quiet, chill place to eat healthy food, you can’t go wrong here. Really like this place.
  • Meet in Gastown. This is actually a vegan place (we’re known for our puns here in Vancouver). Your best bet for vegan food in the area, however it’s hugely popular so be prepared to wait in line at least half an hour if you go there in the evening.
  • Pourhouse. If I had to describe this place in three words it would be Fancy Burger Place. Still, it does both “fancy” and “burgers” well, so if you’re looking for a more fancy experience but don’t want to eat foie gras or anything, this may be the place for you.
  • Chambar. At night this is a full-on fancy restaurant. It does that very well, so if that’s what you’re into, or you’ve always wanted to try frog legs (which are on the menu), by all means. HOWEVER, during the morning’s this is also one of the city’s most underrated breakfast/brunch places. It’s not that expensive and the food is miles better than the very overrated Jam Cafe, which is half a block down. And as a bonus you don’t have to wait in line for 45 minutes.
  • Catch 122/Wildebeest/Tuc Craft Kitchen. I’m putting these together because they’re all good for one thing: breakfast/brunch. Brunch is probably a specialty for Gastown restaurants, and these 3 probably do it the best. Catch 122 and Wildebeest are right beside each other, and are both equally good. For some reason I still don’t fully understand, Catch 122 seems far more popular and always has a wait, while at Wildebeest you can get in right away. Either way, you can’t go wrong. If you want chicken and waffles, or more “creative” brunch options, try Tuc.
  • The Revel Room. Lousiana-themed place with live music. The food is not necessarily spectacular, but they’re one of the only places in the area that has live music, good vibes, and a laid-back but classy atmosphere. It kind of reminds you of the kind of place Don Draper would have gone to to have a good time in the 60s.  Really like this place, or I would if I was cool enough to go drinking regularly.
  • The Cambie/The Pint. These places are basically known cheap drinks and rowdy college kids. Don’t go here if you’re looking for good food or meticulously crafted interior design. Do go if you’re looking for a good time. If I had to guess, I’d think a large part of those in town for The International looking for drinks will find their way here at some point.

Other Stuff To Do. So that’s the food/bar situation near the arena. If you have a day or afternoon free and are looking to do something in the city itelf, here’s some other parts of the city you may want to check out.

  • Robson Street. This is actually Canada’s longest commercially-zoned street (#themoreyouknow). Think of it as way more downscale version of Rodeo Drive. If you want to take a walk on a sunny day but hate nature, there’s worse ways to spend a few hours. Also, for some reason I don’t understand, this street has Downtown’s best conglomeration of Korean restaurants (go all the way West to near Denman St.).
  • Stanley Park. This place always ranks at the top of any list of the best/most famous  city parks in North America. If you’re into parks/nature and don’t know when you might get back here again, you should make time to check it out. If you really want to go all-out you can do a walk around the 9-km long seawall surrounding it.

  • Commercial Drive/Kitsilano (around West 4th). These are Vancouver’s other main “hipster’ neighborhoods. If you’re looking for a nice walk somewhere hipstery but not as touristy as Gastown, try one of them.
  • Richmond. A lot of Vancouver’s (huge) Asian population congregates here, and as a result this place is known for having the best Asian food in North America. Always a good choice for some late night Korean BBQ or bubble tea. You’ll need a car, however, as it’s hard to get around otherwise.

So that’s it. Hope you guys have fun and enjoy your stay.

Oh, also, because I’m sure this question will pop up a lot: The building with a giant silver ball on top of it to the East of the arena is called Science World. It’s a giant museum for sciency stuff. #themoreyouknow

Terrifying Twitter Account Shows How Saturated the Indie Market Is

Further to my recent post on the importance of indie game marketing, if any indie dev wants some perspective about how hard it will be to have their stand out from the crowd, they should have a look at the Steam Trailers in 6s twitter account.

Like its name suggests, every time a game goes up on Steam, the account auto-posts a 6 second trailer of it. This allows you to see, in real time, the fire-hose like rate at which these games are cranked out. A new game is posted every 45 minutes to an hour or so. For instance, at the time of the time of this post, the account had put out 33 trailers in the past 24 hours.

If I was an indie dev, scrolling through this feed would scare the living crap out of me. It’s one thing to read stats on paper about how 7,000 games were released on Steam last year and so forth; it’s another thing to see it happen right in front of you like this, and to know that somehow your game is going to have to differentiate itself from all of these to see any sales.

Lawsuit Filed Against PUBG Mobile Clones

PUBG’s publisher has filed a suit in California for copyright and trademark infringement against Chinese gaming behemoth NetEase, developers of “Knives Out” and “Rules of Survival,” two popular PUBG mobile clones. The move comes only a few days after the release of a mobile version of PUBG, and after its publishers attempted to remove the clones from the app store without success.

Hmmmmmm.

It will be interesting to see how this one turns out. While PUBG essentially created its own genere, things like game concepts and ideas are not protectable IP. Any developer can make their own battle-royale style game, copying things like the airplane drop, last-man-standing format, shrinking play area, etc. without worrying about a lawsuit.

However, it’s still possible for PUBG’s publishers to succeed if they can establish NetEase’s games copied the “look and feel” of PUBG . This is a pretty nebulous legal concept that basically means that, even if NetEase didn’t directly copy any actual code or art assets from PUBG, if the two games are substantially similar in terms of both visuals and overall functionality, NetEase will have infringed the PUBG’s publishers’ copyright.

Generally these kind of infringement claims have been successful in regard to less complex games with easy-to-define rule sets like Tetris or simple tile-matching games. PUBG is of course a far more complicated beast, and its publishers will probably have an uphill struggle on their hands showing there are enough similarities between it and NetEase’s two clones to establish infringement. If this claim succeeds it will probably be the first time the a court will have found this kind of infringement between games of this level of complexity.

Is the Clash Royale Crown Championship the Future of E-Sports?

If any of you are wondering what the e-sports landscape is going to look for most games coming out the next few years, the best place to look probably isn’t major events for established titles like the International, or Blizzard’s Overwatch league, but rather Clash Royale’s Crown Championship Series.

For those of you who aren’t familiar with Clash Royale, it’s a mobile game by the makers of Clash of Clans. It’s got its’ own small (but growing) fan base, but it’s no DotA or CS and doesn’t have a huge pro scene. However, that didn’t stop SuperCell, the game’s publisher, from pulling out all the stops in putting this event together.

As you can see from the video above, this event involved, among other things: a full studio arena with live crowds and expensive-as-hell looking giant projection screen showing the proceedings, multiple sets of commentators and assorted studio people, and an $150,000 USD grand prize for the winner. For some previous events they even traveled to the players’ homes to do human interest pieces on their home lives and families.

There’s absolutely no way that SuperCell came anywhere close to making back the money it put into this event (the video above only has 1.5 million views for instance). But you know what, they’re probably OK with that. Putting something like this together helps generate interest in the game, which should lead to more revenue in the long run. And if it helps kick-start a pro scene, perpetuating self-reinforcing cycle of interest in the game, which leads to more events, which leads to more interest, and so forth, even better.

If I had to guess, I’d say that in the long run, this will probably be the model followed by games that aren’t quite at the top-tier in terms of an e-sports audience. Putting together events like these, and supporting a competitive scenes that would otherwise probably not be strong enough to support themselves, will become almost standard practice for companies that can afford it, going into their marketing budgets right beside traditional advertising like TV commercials, magazine ads, and paying for good reviews sending swag and perks to game websites.

 

Pokemon GO Lawsuit Settles for $83,000

Remember that Pokemon GO lawsuit I posted about a few months ago?  It turns out that Pokemon GO probably is protected by the right to free speech, as the Milwaukee County Board of Supervisors has agreed to settle the case for the sum of $83,000, with the entire amount reportedly going to the plaintiff’s legal fees. The park board will also agree not to enforce the ordinance at issue, which creates an awkward permitting process for any augmented reality games to be played in Milwaukee public parks.

This settlement comes after a July court ruling holding that it was likely that the plaintiff would succeed in establishing that the park board ordinance banning augmented reality games from public parks violated their right to free expression under the first amendment, and granting an injunction preventing the park board from enforcing the injunction.

This is as close to a 100% win as you get in law, with the board agreeing to give the plaintiffs everything their were asking for, and pay their legal fees. Score one for the forces of justice and freedom.

How is the E-Sports Revenue Pie Going to Be Split?

Pie
Yes, I got lazy with the picture, but you try finding something that matches “e-sports revenue pie”

I recently did a podcast with local game developer Christian Sears, and a really interesting question came up and I thought I’d write a post about it, as it’s probably one of the most interesting issues to follow as the e-sports industry develops. The question comes down to this: as e-sports, and in particular e-sports leagues, become more established, how are revenues they earn going to be split?

One good starting point for an answer to this question is probably traditional sports. In most traditional pro sports leagues like the NBA and NHL, revenue is generally split roughly 50/50 between owners and players. Each league has arrived at that split after years of hard-nosed labour negotiations, including lockouts, strikes and countless melodramatic press conferences, so maybe there’s something about that number, and we can expect that in e-sports revenue will also end up being shared along those same lines.

Of course, with e-sports you have a third power group that doesn’t really exist in traditional sports: the companies that make the games. While no one “owns” basketball or hockey, someone does own games like Overwatch, League of Legends and DotA. Anyone who wants to operate an e-sports event needs the game maker’s consent, which means the game maker is going to get a piece of the pie. For this reason, I think the key issue regarding how revenue will be allocated in e-sports leagues is not the split between players and owners, like in traditional sports, but the split between the game companies and everyone else.

That seems to be the direction things are heading for a lot existing sports leagues. For instance, the League of Legends North America League Championship Series (NALCS) recently unveiled an overhauled revenue sharing model that states revenue will essentially be split three ways with Riot Games, the company behind LoL, getting 32.5% of league revenues, teams getting 32.5% and players getting 35%. In Blizzard’s upcoming Overwatch league, the split is apparently going to be 50/50 between Blizzard and the teams (with no details regarding how much of the teams’ share will go to the players).

While 32.5% and 50% are already significant numbers, if I had to guess, I would say that as things continue to shake out, the revenue going to the game companies is only going to increase. This is because, as discussed above, they’re literally the only game in town, and have all the bargaining power.

Say for example Blizzard goes to the owners and players in the Overwatch league a few years from now and asks for 70% of revenue instead of the current 50%. Even if all the owners and players were united against Blizzard’s demands, they can’t exactly tell Blizzard to f*** off and start their own league, because, as discussed Blizzard literally owns the game their league is based on and can prevent them from doing that. Instead, the owners and players would have essentially two choices: (1) take the 30%, or (2) stop operating and make nothing.

Blizzard, on the other hand, could always find more teams and players to replace the ones sitting out. They probably prefer not to go through the effort, but if the league is making money hand over fist and that extra 20% of revenue works out to a lot of cash, the effort may be worth it to them. Plus, if the league is doing well financially, there will probably be no shortage of new teams and players looking to sign up, even if they’re only getting 30% of revenues instead of 50%.

The bottom line is that Blizzard can always find more teams and players. The teams and players can’t find another Overwatch league.

Right now, the owners and players in e-sports leagues are basically in the same situation baseball players were before unrestricted free agency came along. They’re basically at the mercy of the game companies, who can pay them the minimum they’ll accept to continue operating and no more, then keep all the remaining profit for themselves.

I may be overstating things here of course. There’s obviously PR aspects to this I haven’t really considered. As EA has learned recently, the gaming community can get petty worked up by things they perceive as unfair. This would also take a certain cold bloodedness from the game companies that we haven’t really seen yet, nor would I expect to see anytime soon given that a lot of these e-sports leagues are just getting off the ground, no one knows how successful they’ll be, and everyone is in the “let’s all get together and make this thing work” phase.

However, and as e-sports gets more established and the amount of money at stake increases, that phase might start to give way to a more business-minded approach by the game companies (it’s worth noting, for instance, that Blizzard has essentially spent the year essentially shutting out independent Overwatch tournaments, harming the Overwatch scene in the process, in order to prepare for the roll out of the Overwatch league), and lead to the kind of negotiations you see in traditional sports. If that does happen, I can tell you right now who’s probably going to win, and it’s not going to be the teams or players.

CD Projekt RED Struck By Blackmail Attempt

It looks like the video game industry isn’t immune from the kind of ransomware attacks that have been hitting…well, everywhere, recently, as CD Projekt Red, the Polish developer behind the Witcher series, reports being subject to a blackmail attempt by thieves who have stolen some early development materials for its’ upcoming game, Cyberpunk 77. The blackmailers have reportedly threatened to release the materials online if their demands aren’t met.

What’s been great to see is the way the company has responded to to the situation. Taking a page from the Jaromir Jagr handbook, they’ve basically told the blackmailers to go ahead and release everything. They’ve also put out a public statement summarizing the situation, and noting that the materials are old and don’t represent the current state of the game.

All in all, this was a fantastic way to handle this by the company. In the end, I wouldn’t be surprised if the positive PR, and the extra exposure  for Cyberpunk 77 that the company gets as a result of this incident (ironically enough, this story will probably be the reason many people hear about the game for the first time) will outweigh any damage done if the materials are released.

Full statement from CD Projekt Red below:

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