IP Rights – Why Are They Are Important to Indie Game Developers? Part 1
Posted by Rampant Coyote
This is gonna be a multi-part article about a discussion we had last week (in comments) about Intellectual Property rights. Why are they such a big deal? Why should indies care (beyond the fact that, in the opinion of most, if you are working on someone else’s IP, you ain’t indie)?
Let’s talk about a former Big Publisher. I always feel bad talking negatively speaking ill of the dead, but this particular company has been pretty much dead-and-buried for a decade, in spite of being one of the BIG PUBLISHERS of the early-to-mid 90′s, so here goes. (I should note here that any relationship I might have had with said big company gave me very little insight into their actual workings, and much of this is based on the press of the time, plus some conjectures, rumors, and ruminations by former employees).
So once upon a time, this big publisher (A Certain Company, Loathed Am I to Mention… let’s just call ‘em BP – not British Petroleum!) struck a deal with a struggling but up-and-coming wrestling franchise. “Hey,” said BP, “Your audience represents a segment of potential market we don’t normally appeal to. This could be a great opportunity for us to expand, and for you to start, you know, leveraging your franchise and get more money.”
Said wrestling league, probably hard-up for cash, took the deal: an extended exclusive deal with BP.
Well, the deal went far better than either of them could have imagined. The games were Really Popular and made BP a lot of money. It went really well for the wrestling league too… in fact, in many ways, it made their business. Instead of simply giving the BP access to their audience, it vastly increased their audience as people played the game and then started tuning into wrestling matches on TV.
At least, that was BP’s take. I think they were correct in that they had a hand in it.
But years went by, and as both companies prospered, the wrestling league started getting annoyed. That multi-year exclusive deal was for peanuts, they protested… it would be worth a lot more now!
BP saw it differently. They were the kingmakers – if anything, the wrestlers owed THEM for their success.
Well, the time came that the exclusive license came to an end. As you’d expect, the now-big-and-famous wrestling league jacked up their price for future licenses by an almost punitive amount.
“Now,” they said to BP, “You will pay us what you should have paid us all along for our piece of awesomeness.”
“Bite me,” said BP. “We made you. We can make someone else just like you. Good luck staying awesome without us to prop you up.”
I doubt the conversation went exactly like that. But from the rumors I heard that may have suffered a little from the telephone-game effect, that was the gist of it. In the end, BP and the wrestlers went their separate ways. BP found a new, struggling wrestling league just like their former partners had once been. And the wrestlers found game publishers willing to pay through the nose to sell games with the official franchise brand that were guaranteed to make lots of sales, because they always had before.
So who won that argument?
In my opinion, nobody.
The wrestling league pretty much peaked at about that time. The “fad,” I guess, faded. Though there are innumerable reasons for their decline, I don’t think changing game publishers made that big of a difference.
And the Big Publisher? As I stated earlier, dead-and-buried. Again, many reasons for this, most of them having little to do with wrestling games, but a lot of them having to do with it not actually owning the IP rights for most of its games. I imagine they had a tough time without being able to anchor their business on a consistently franchise, and other stories often repeated this one: the more successful they were, the more difficult life became for them later.
And the new wrestling league? Also dead-and-buried, with bits and pieces of it purchased and absorbed into the original wrestling league of this story.
There is much more to this story, but let’s just treat it as an allegory for now.
BP used to brag in magazines about its core strategy of leveraging other people’s IP. It worked out pretty well for them when video game licenses were cheap, and they didn’t have to do much more than re-texture an existing game to match the license and push it out into the stores. But as games became bigger and bigger business, the licenses got pricier, and quick-and-dirty game development got less a lot less quick (or cheap).
In an industry built on ephemeral works of creativity given form only in the collection of information, Intellectual Property rights are the lifeblood. It doesn’t matter if the product is rented, sold, or given away freely and even permits others to share a joint ownership – the holders of the IP rights have the control over their own creations and are allowed to dictate how they they will be shared with the word, insofar as legally enforceable. It is very possible for symbiotes (and their nastier, leechier cousins, the parasites) to survive or even thrive in this world, but they are always dependent upon their hosts for life.
Note the word “dependent.” As in, opposite of “independent.”
Maybe it’s unfair, but maybe it was a victim of its own success. But as much of a beneficial symbiote as BP saw itself, without enough lifeblood from hosts, it curled up and died.
IP rights matter. And yeah, they should.
IP Rights – Why Are They Are Important to Indie Game Developers? Part 2
Posted by Rampant Coyote on June 13, 2012
So yesterday I prefaced the whole “IP rights” thing with a story about a non-indie publisher.
My feeling – echoed by most within the indie arena, but apparently not all – is that owning your own IP is a “necessary but not sufficient” aspect of your game being indie. But even within that, there’s a lot of fuzzy areas. Maybe a game is indie to somebody, but not to me, as I’m doing contract work for an indie or porting the game to another platform for a percentage. Does that make me non-indie? Let’s just assume right now that it’s all a big fuzzy generalization with a lot of exceptions and nits that you could pick here and hairs you can split there. And IANAL, or even a good business-person, so feel free to take this all with a grain of salt. But maybe it’s something you’ve been thinking about, and these little essays will help.
Now here’s the thing. IP rights are simultaneously the most worthless and most valuable thing you can own as an indie.
On the worthless side: Ideas are a dime a dozen if we’re feeling generous. Sitting on my butt dreaming up “intellectual property” all day long is worth pretty much nothing. While some ideas and so-called properties may have some merit and more potential all on their own, the real value doesn’t exist until the property has an audience.
Plus, it has to have had some value pumped into it so its not something easily duplicated or replaced. For example, a webcomic that only has three strips drawn probably possesses no inherent superiority to any other webcomic that is also three strips long. While three strips isn’t trivial, there’s still not a whole lot to it, yet. Now, fifty strips… that’s history. That’s an achievement. That’s not something someone will be able to duplicate in a caffeine-fueled three-day weekend.
So I guess there’s three factors at work here that give an IP value: The inherent potential of the concept (which is more of a multiplier than an inherent value), execution, and audience. All three need to be kicking butt, and sadly… most concepts just don’t ever get there. Yeah, even our beloved indie games.
But what does that really mean? So how much is IP really worth?
Well, to put dollars and cents on it, it’s worth something along the lines of how much money you can make exploiting it vs. doing something else.
The trick is… it’s not the same value to everybody.
This was how the game studios got themselves pretty much boned by the publishers back in the early days. For a studio with little means, expertise, or contacts, the value of the IP rights for their game to them wasn’t all that high. But to a publisher, especially one that eats, breathes, and sleeps these things, the potential value of a property could be huge. So it makes sense for the studios to trade those rights to the guys for whom its more valuable, right? That’s capitalism ‘n stuff.
That wasn’t the problem. The problem was that they traded those rights for something much closer to their own value than that of the value to the publishers. This persisted until taking control of the IP rights was pretty much boilerplate stuff for publishing contracts.
It’s like… who needs a soul anyway? When was the last time you did anything with it? We’ll just throw that little thing in the contract too, as a minor clause…
So studios got into the habit of selling off their birthrights for a mess of pottage.
To be fair, the publishers don’t even bat something like .500 when it comes to picking winners, either, and it’s an expensive biz. So it’s not like a fair price is exactly in the center of the value range or anything. And a lot of that value invested into the game that I mentioned – that can be measured in marketing dollars that get poured into it. You’d better believe a publisher doesn’t want to pour millions into promoting a game series that it doesn’t control… that someone else could leverage off of and make money on the sequel. Or on the ports. Or on the original game.