Reprinted with permission from the Licensing Journal. February 2008, Vol. 28 No. 2. Published by Aspen Publishers 1185 Avenue of the America, New York, NY 10036. To order a subscription, please call (800) 638-8437.
The video game industry has come a long way from the days when Pong was played in wood paneled and shag carpeted rec rooms. Last year, the U.S. video gaming industry was almost a $13 billion industry, and by all indications, it continues to grow. U.S. computer and video game software sales were $7.4 billion last year – nearly tripling industry software sales since 1996.Both the industry and the games themselves are more sophisticated than anyone could have imagined in the early 1980s when Asteroids and Space Invaders ruled the arcade. With the amount of money at stake in 2007 and beyond, licensing in the video game industry is a crucial component to the industry’s continued success.
Licensing is a major component to video game development, publishing and distribution. This article focuses on hot licensing issues facing the video game industry, namely on securing the rights to use third parties’ intellectual property in a game, and drafting an effective, enforceable End User License Agreement (EULA) to keep the peace between and among players and the provider.