This document discusses licensing strategies for storylines and characters in the video game industry. It provides an overview of how intellectual property is protected and monetized in video games, including through licensing agreements. Specifically, it describes how video game developers and publishers expand their businesses by applying inbound licensing to increase game value and outbound licensing to create new revenue streams. It also notes some common legal issues around licensing video game elements, such as ownership disputes and infringement claims.

1. LICENSING OF STORYLINE
AND CHARACTERS IN
VIDEO GAME INDUSTRY
TIMOFEY RUBCHENKO
22/09/22
Master of Intellectual Property Law and Management 2022
Université de Strasbourg | Centre d'études internationales de la propriété intelectuelle

2. Table of contents
I. Evolution of Video Games
II. Intellectual Property in Video Game Industry
III. Monetizing of Video Game Elements
IV. Legal Issues in Licensing of Video Game Elements
V. Conclusion
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 2

3. Purpose of the study
Identify IP protection instruments and licensing strategies used in video game
industry, and in particular, with relation to video game elements such as
storyline and characters.
Overview examples of monetizing of video game elements through identified
licensing strategies, as well as legal issues and caveats which may occur during
licensing arrangements.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 3

4. Evolution of Video Games
Dawn and Dusk of Early Video Game Era
Magnavox Odyssey and Pong(1972) E.T game on Atari 2600 (1983)
“We were not convinced that video games had a long life. We knew that if the market was flooded with poor quality
video games, it'd blow up overnight” - Howard Lincoln, chairman at Nintendo of America.
1. Limited in graphics and depth of play;
2. Played at their best only in arcades;
3. Restricted to few colors;
4. Constrained by poor audio qualities, with a
limited variety of sound effects.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 4

5. Evolution of Video Games
Story-driven video games
Linear game narrative Non-Linear game narrative
Open world game
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 5

6. Intellectual Property in Video Game
Industry
Main pillar of the video game industry.
Content ownership facilitates their internal product development efforts and
maximizes profit potential.
Essential part of contractual and licensing relationships between developers,
publishers and players.
Protection of this capital investment from competitors and pirates.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 6

7. Intellectual Property in Video Game
Industry
IP PROTECTION OF VIDEO GAME COMPONENTS
Copyright Trade Secret Trademark Patent
Music Customer mailing lists Company name
Inventive game play
or game design
elements
Code Pricing information Company logo
Technical innovations
such as elements in
software, networking
or database design
Story Publisher contacts Game title
Hardware technical
innovations
Characters Middleware contacts Game subtitle
Art Developer contacts
Identifiable “catchphrases”
and non-traditional marks
associated with the game
or company
Box design
In-house development
tools
Website design Deal terms
Advertisements
User interface
Motion capture
Voice acting
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 7
Table of exemplary components of a game project and the type of IP law used to protect each component (Boyd, Pyne and Kane, 2018).

8. Monetizing of Video Game Elements
Six core business models for video games:
Retail;
Digital distribution;
Subscription;
Player to Player trading;
Micro transactions;
In-game advertising.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 8

9. Monetizing of Video Game Elements
INBOUND LICENSING
licensed content made by IP owner
create or increase product value.
OUTBOUND LICENSING
original content made by game developers
create new revenue streams.
Licensing IP for video games, with a combination of inbound licensing and outbound licensing, is a powerful
mechanism for a game publisher to create a competitive advantage for their games and build out new revenue
streams.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 9

10. Monetizing of Video Game Elements
CHARACTER LICENSING
Advertising
advergames
game characters in TV ad
Consumer goods
food and beverages, clothes, toys etc.
Collaborations/Crossovers
characters from/to other universes
STORYLINE LICENSING
Films/Animations/TV Series
adaptations and original stories
Books
game universe expansion
Remakes/Remasters
old games re-developed for current generation
systems
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 10

11. Legal Issues in Licensing of Video Game
Elements
Typical agreements:
Publishing Agreement;
Development Agreement;
Licensing Agreement;
End User Licensing Agreement.
Traditional value chain in the video game industry (Zackariasson and Wilson, 2012)
Developer Publisher Distributor Retailer Customer Consumer
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 11

12. Legal Issues in Licensing of Video Game
Elements
Primary License
◦ IP usually consists of copyrighted material and
trademarks associated with a particular brand as
well as the rights of an individual’s likeness.
Secondary License
◦ IP creates a realistic gaming environment but not
necessarily the focus of the game and might
include names, planes, locations, cars or other
identifiable IP.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 12

13. Legal Issues in Licensing of Video Game
Elements
Infringements:
Right of Publicity and Moral Rights;
Trademark Infringement;
Copyright Infringement;
Patent infringement;
Misappropriation of Trade Secrets.
Ownership Issues:
Work for hire Agreements;
User-generated content.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 13
The IP challenge is one of the biggest legal challenges facing the industry today, both in litigation involving
companies protecting their IP and in preventing IP infringements.

14. Conclusion
Video games are no more “childish” way of entertainment, but a profitable business with $203.1
billion market revenue and 3,9 billion players.
Games are becoming more complex -> industry is looking for ways of monetize their IP assets and
make return of investment.
Video game developers and publishers expand their business models through applying inbound
licensing strategy for increasing value of their games and outbound licensing strategy for creating new
revenue streams.
IP litigation matters will continue to evolve, particularly as new jurisdictions take on these challenges.
Patent litigation will continue to be a concern, regardless of whether it involves claims of non-
practicing entities or legitimate claims.
Ownership issues of created IP elements are always part of employer-employee relationship
discussions as well as user-generated content.
Future research can be suggested for identifying IP issues and licensing issues of video game
elements created by artificial intelligence, as well as using characters and storylines from popular
gaming franchises in virtual reality, augmented reality, and the metaverses.
MASTER THESIS | CEIPI MIPLM 2022 | TIMOFEY RUBCHENKO 14

15. Thanks for your
attention!
QUESTIONS?