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The dawn of streaming requires contract revisions

Beiten Burkhardt's Dr Andreas Lober explains why developers and publishers should check their contracts as services like Google Stadia emerge

Streaming platforms such as Google Stadia are set to be game changers in the coming years, especially when combined with subscription-based, flat-rate business models. For developers and publishers, they are yet another way to bring games to a bigger audience. But they also bring new legal issues, especially those relating to licensing agreements. In this article, I will be highlighting some of the more important points.

Scope of the IP license

First and foremost, the scope of the license might need to be revisited. Publishers licensing a game from a developer, for example, will want to make sure the scope of the license covers streaming and related business models. In the case that the contract provides for a "rights buyout," publishers seem to be covered -- but many legal systems, especially continental European legal systems, do not allow for a "buyout" of copyright. Which means that a publisher using a "buyout" clause when contracting with a developer in such a country might end up without sufficient rights.

This also means that any license agreements drafted for legal systems in which a "buyout" is not possible typically have a long list of the rights that are granted, often in an annex -- will "streaming" be among the permitted uses in such an annex?

"Knowing where players eventually quit can help with optimising the game. Knowing the next game they play might be even more valuable"

ESD

The next point to check should be the "ESD" definition, especially regarding any ESD exclusivity. Even though "ESD" is a commonly used term in the industry, there is no precise definition -- it is not even clear what "ESD" stands for.

Google suggests "electronic software distribution," "electronic software delivery," or "electronic software download." The difference between these explanations seems to be minor, but it is also clear that streaming might be considered software delivery, but certainly not a software download. So contract partners are well advised to include a proper definition for "ESD" in their contracts, and make it clear whether or not "streaming" should be covered.

Power of data

Being able to closely monitor player behavior has been identified as one of the more controversial points regarding streaming. It certainly gives every company with access to such data a competitive edge. Knowing where players fail, and at which stage they eventually quit, can help with optimising the game. Knowing the next game they play after having quit might be even more valuable.

The possibilities of what a company such as Google could do with such data seem to be endless. Contracts between developers, publishers, and the provider of the streaming service can determine who can access, use and exploit such data -- always respecting privacy laws, of course.

Cross-play -- and other things Sony doesn't like

One of the selling points of streaming is that it can be device agnostic, so cross-platform progression should be a given when the player uses various devices for the same streaming service. Whether cross-platform progression is available when a player wants to switch from a streaming service to "local device play" should be dealt with in the contract between the publisher and the streaming service provider. The same applies for the question of whether the publisher, the streaming service provider, or both have the power to ban players for toxic behavior such as hate speech or cheating.

Finally, Stadia currently does not support cross-platform play. This does not appear to be due to technical restrictions -- it is more likely based on Sony's aversion to widespread cross-platform-play on PlayStation.

Dr Andreas Lober is partner at the law firm Beiten Burkhardt. He has been advising video game companies for many years. The views expressed in this article are his personal opinions and not meant to be an exhaustive discussion of the legal implications of streaming.

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