Legal issues are a big problem that game developers and publishers have to deal with. The biggest and most well known recent legal issue is the one between Infinity Ward and Activision which resulted in multiple lawsuits. After Jason West (Infinity Ward president and game director) and Vince Zampella (CEO and co-founder of Infinity Ward) both senior employees of Infinity Ward were fired nearly half of the remaining employees resigned. In conjunction with these events it was reported that Infinity Ward had not received royalties from the sales of Call of Duty: Modern Warfare 2 and that the developer may have breached their contract with Activision by holding meetings with other video game publishers including Electronic Arts. It was revealed to be the reason behind the firings of West and Zampella when they filed a lawsuit against Activision on March 4, 2010 over “substantial royalty payments” that Activision had failed to pay them in the weeks leading up to their firing.

Issues involving royalties have also been seen with EA and their Madden series, Right in the beginning with the release of John Madden Football on the C64, Apple 2 and MS-DOS back in 1988. Now twenty-three years later and the series is a hundred-million dollar plus entity of it’s own. Now original developer Robin Antonick is seeking some of the revenue from it, and also some credit for his hard work. Antonick filed a lawsuit against Electronic Arts, seeking “tens of millions” in royalties according to routers, plus a portion of the enormous profits EA has made on the series.

John Madden

Legal issues in the gaming industry also include copyright laws and patenting. Back in 1974 Magnavox filed a lawsuit against Atari and many other companies that created Pong consoles. Ralph Baer, inventor of the Magnavox Odyssey, claimed that Atari had infringed on his patents and his concept of electronic ping-pong based on detailed records kept on the design process of the Odyssey. Other documents included depositions from witnesses and a signed guest book that demonstrated Bushnell had played the Odyssey’s table tennis game prior to releasing Pong. Upon accusations of seeing the Odyssey, Bushnell (Founder of Atari) said “The fact is that I absolutely did see the Odyssey game and I didn’t think it was very clever.” In conclusion Bushnell decided to settle with Magnavox outside of court, agreeing to making Magnavox a licensee for $0.7 million and rights to Atari products made in the next year, which Bushnell avoided by delaying the release of his products until after that year.

Video game emulation is another subject which is debated on whether or not it infringes copyright or not. United States law states that if the user legally obtains a purchased copy of the game/console then it is seen as fair use. Although it could be seen that popularizing old games is seen as benefiting a company and getting PC gamers interested in other platforms companies like Nintendo still discourage any use of emulation as they see it as hurting their goodwill and they also believe it represents the greatest threat to date to the intellectual property rights of video game developers.

(An NES emulator being used on an iOS device.)

In conclusion you can see that legal issues are very prominent in the video game industry and can affect any related party, from small businesses to multi-million dollar franchises to video game emulation developers.

 

Sources of research and quotes:

http://www.nintendo.com/corp/legal.jsp#emulator

http://en.wikipedia.org/wiki/Infinity_Ward#Lawsuits

http://en.wikipedia.org/wiki/Console_emulator#Legal_issues

http://en.wikipedia.org/wiki/Pong#Lawsuit_from_Magnavox

http://www.zdnet.co.uk/news/it-strategy/2002/02/11/game-industry-prepares-for-copyright-battle-2104032/