SEGMENT 1:

Sean F. Kane, Esq., Attorney Consultant,
Kane & Associates LLC

1. What are the legal questions concerning digital distribution of video games?

2. What IP rights exist in video games?

3. Is virtual property legally protected?

SEGMENT 2:

Sean Bersell, Vice President, Public Affairs,
Entertainment Merchants Association

Since 2000, there have been 230 bills attempting to restrict the sale of violent video games to minors introduced in Congress, 34 states, and other jurisdictions. Nine of these bills were enacted into law, but all have been overturned on First Amendment grounds. These cases have firmly established video games as protected expression, just like books and movies.

In light of their inability to restrict minors’ access to video games based on the content of the games, video game critics are now pursuing legislation to declare the sale of a video game in contravention of its rating to be an “unfair or deceptive trade practice.” This approach threatens to encompass other entertainment products and, if successful, would undermine the video game ratings system.

The Consumer Products Safety Improvement Act of 2008 established new limits on lead in children’s products and on phthalates in children’s toys, requires third-party testing of those substances to ensure compliance, and imposes labeling requirements. The application of the act to video games aimed primarily at children has not been resolved, but retailers are requiring video game suppliers to demonstrate compliance with the Act. All manufacturers and importers of video games aimed primarily at children should be familiar with the act and have a compliance strategy.

SEGMENT 3:

Russell G. Weiss, Partner,
Morrison Foerster

Topic: Major Deal Points That Video Game Developers and Publishers Must Consider When Negotiating A Video Game Development Agreement

1. Ownership. Who owns the video game? If the publisher owns the video game, will the developer
    retain ownership of any of the underlying technology or content contained therein? Should a source
    code escrow be used?

2. Ancillary Rights. Who owns or controls the rights concerning porting, downloadable content,
    sequels, merchandise and other ancillary revenue streams (e.g., film, tv, publishing, etc.)? If the
    publisher owns or controls these rights, should the developer have a right of first negotiation and/or
    last refusal to develop ancillary video game products? If the developer owns or controls these
    rights, should the publisher have a right of first negotiation and/or last refusal to exploit any such
    ancillary rights?

3. Game Specifications, Milestone Delivery Schedule and Approvals. What level of detail should be
    used in the agreement to define each party's relative rights regarding the game specifications,
    milestone delivery schedule and approvals?

4. Compensation. How should the developer be compensated and incentivized? Development fee?
    Revenue share (in which revenue streams)? On-time completion bonus? Late delivery penalty?
    Unanticipated Costs?

5. Termination. What are each party's relative termination rights? What is the effect of termination?
    Should the publisher have the option to receive transition services?

6. End User Data. What are each party's relative rights and obligations relating to end user data
    collected from the end users of the video game?

SEGMENT 4:

Mike Vorhaus, President, Magid Advisors,
Frank N. Magid Associates

Gaming is very broad – among the online population in this country, the majority of consumers are playing some type of electronic games.

Gamers play across many platforms – there is no thing as just a console player or just a mobile gamer.

The big money is in the console area, which is dominated by young men, but many of these young men are also play the new social games on social networks like Facebook that are getting a lot of attention.

Used games are often sold and bought by consumers and this takes revenue away from the game industry.

These social games are supported by the purchase of virtual goods online for real money, or earned through offers/promotions.

Wireless gaming is also growing and particularly driven by iphones and other smartphones.