Legal Challenges in the Games Industry in 2022

So the pandemic is still ongoing. It’s still affecting our everyday lives in so, so many ways. Our thoughts go to all of the people who have lost family members and friends over the past two years.

Here are our thoughts and predictions on 2022 as the pandemic, yet again, continues to rage on in the US and abroad.

Remote work is still just work

Last year, we predicted that more companies in the games industry will go permanently remote but that there would be legal complications on taxes and management. We were completely correct here and as this year unfolds, it seems like returning to offices will cause strife between workers and companies.

After the Great Resignation occurred in October and November of 2021, workers are gaining more rights (more on this later). Employees want flexibility in their work and they’re able to get it now as talent is becoming a very scarce commodity.

Odin prediction: There will be a reckoning between companies and workers as companies attempt to get employees back in the office after more people have become acclimated to remote flexibility. Whether this results in more lawsuits over safety concerns for employees is hard to say but we do anticipate that the companies with more flexibility and more support of a distributed workforce will have an easier time attracting talent.

Worker organization

On this note – North America has its first unionized video game development studio at Vodeo Games as of December 2021. 

We first predicted that this would happen in 2019 and that Game Workers Unite in the UK would set off a chain reaction in the US and abroad. Things fell apart a bit in 2020 (although we still predicted unionization would affect more AAA studios) but it seems like our prediction is finally coming true, especially in light of the growing focus on labor and career shifts taking place globally.

Activision Blizzard workers also took their first steps toward unionizing in December 2021 and even in early 2021, Google workers formed a union to protect themselves. 

Odin prediction: It’s finally happening. Expect more pushes for unionization across the games industry and the tech industry in 2022. 

User generated content & NFTs

We predicted last year that more games will be offering user-generated content (UGC). We were definitely right there as more platforms try to succeed a la Roblox and Minecraft by adding UGC but not fully monitoring or supporting those efforts. 

Someone may still be made an example of and regulations may tighten. (We’re looking at you and your child labor issues too, Roblox.)

What we didn’t predict (and probably nobody could have predicted) has been the rise of non-fungible tokens (NFTs). Check out our brief primer on NFTs here.

NFTs are here for good, for better or worse. We’ll see brands investing more in the creation, placement and sale of digital counterparts for their real-world goods and looking to secure the associated IP rights ala Nike and Ubisoft.

Both UGC and NFTs point to a trend to giving more ownership of a game and its contents to the players but not really. There are going to be more legal challenges over this, for sure.

Odin prediction: Someone’s going to be on the chopping block on the UGC front sooner than later. For NFTs, they will find a place in the world that is more palatable and they aren’t going away. But they will both absolutely be attracting regulatory scrutiny. Both areas have too many gray areas currently on who owns what.

Greater power for content creators

In 2022, we anticipate a rise in platforms and business, e-commerce and creative tools that support the growing power of creators and end-users in content and experience creation, the modification of existing third-party content, and the sales of said content. IP and data/privacy issues will abound. 

Creators will need to take a close look at terms of service and the data practices of their service providers and their own IP and data practices to manage their exposure in relation to these risks. 

On that note – one-off, single platform sponsorship campaigns will most likely fade away in favor of long-term brand relationships and more comprehensive, cross-platform ambassador relationships. 

The FTC is already reviewing its guidance with respect to sponsorship disclosures, and as campaigns change it is likely that FTC disclosure requirements will as well. 

We’ll also see creators hiring larger in-house teams to support their businesses. They’ll need to make sure that all of these relationships are properly classified, and that IP rights and important obligations such as confidentiality are clearly spelled out.

Odin prediction: Content/IP ownership may become more of an issue with more comprehensive sponsorship relationships as will exclusivity obligations and morals clauses. 

Esports

Previously in 2019, we anticipated consolidation in esports as the field matures. But moving forward, we finally expect the esports industry to contract on multiple fronts due to a few factors. Investment, player salaries and the growth of competitive teams will slow down as scandals, mismanagement challenges, new frontiers (like UGC and NFTs, as mentioned previously) and other shinier objects come to the forefront. We’ve also addressed that we expect the growth of individual creators (or creator collectives) will draw more eyeballs and be a more profitable endeavor.

Odin prediction: In 2020, we predicted that esports may finally plateau in the near future but we weren’t sure when. We predict that this year (2022) will be when esports finally hits that point. It is still going to be a significant part of the industry but the days of rapid, unregulated and unmanaged growth may be over.

The metaverse

We have no predictions here specifically about what the metaverse will look like or anything along those lines. We just hope new vocabulary will emerge to more accurately describe the different pushes in this space. 

Odin prediction: Please. Someone. Figure this out to make everyone’s lives better.

A few wild predictions

We spent some time discussing what may happen in 2022 and here are a few of our wild card predictions internally:

Voluntary participation in simulated activities will become the audition for real-life professional activities  – for example, NASCAR’s training simulators being real-world tests for a role on a NASCAR team or for a new driver spot. Same thing for the workforce at large.

The term “influencer” will finally be retired in favor of “creator” or “content creator” – we can only hope, at least. As brands look more and more to hire big-name creators in-house to provide not just content creation and campaign management services, we hope that they’re more accurately named and acknowledged moving forward. 

It will be a challenge for creators in 2022 to determine if they’re willing to compromise their personal brands (and the associated IP rights) in favor of the security of in-house creative gigs, though.

Some of our past predictions

In 2020 and 2021, we predicted we’d go back more to transmedia. We still stand by this prediction overall. It’s inevitable. 

Combined with the “metaverse,” there’s still a very strong likelihood of a single pipeline of development for Film/TV/Games as the future of entertainment. Lines are already blurring as the previous differences between screens (mobile vs. PC vs. TV) are increasingly overlapping thanks to cross-platform efforts, devices like the Steamdeck and the Nintendo Switch, and more.

Video games in cars are now totally a thing but the licenses and agreements are still evolving. And definitely encountering some hiccups along the way.

We were spot-on last year that we didn’t anticipate in-person events in 2021 would happen and there were privacy issues as events requested/required vaccination records. We anticipated that there would be challenges with organizations and events, like PAX West, requesting personal information but not being equipped to handle that sensitive information. We were unfortunately very right on this front. 

On that note – we assumed privacy rights will become a bigger part of regulatory discussions. CPRA goes into effect in 2023 so it may be that 2023 will be the year that there is finally real movement on the federal level. 

The United States is still one of the few developed countries without federal protection and instead relies on patchwork regulations between states. Beyond Europe and North America, Brazil already has its own version of GDPR (GDPL) and China has its Personal Information Protection Law.

Have thoughts on our predictions for 2022? Let us know! We’re happy to hear different opinions on what the future holds.

Brandon J. Huffman

Brandon is the founder of Odin Law and Media. His law practice focuses on digital and interactive media, entertainment, internet related issues and crisis communication. He serves as general counsel to the International Game Developers Association and is an active member of many bar associations and community organizations. He can be reached at brandon at odin law dot com.

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