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Summit – Countdown Initiated!

It's 5... 4... 3 days to the Reception Dinner, and the first attendees are already landing in Vilnius
Games Industry Law Summit
Summit – Countdown Initiated!
By Sergei Klimov • Issue #49 • View online
It’s 5… 4… 3 days to the Reception Dinner, and the first attendees are already landing in Vilnius as I type this! For a change, let’s start with a few industry news snippets – and then cover the topics related to the event.

"Inspired by..."
Who doesn’t like Akira? I have a hard time thinking of a single person among my friends who would not be a fan.
And who doesn’t like Cyberpunk 2077, the upcoming game by CD Projekt RED? How about this “inspired by” fan art, then (by Dominik Figlhuber) –
The category of what is – and what is not – acceptable in such “tribute” / “inspired by” artwork is difficult to define. Say, someone may confuse the fan art poster with the real thing, because of CDPR’s logo. While the game’s director may have a different vision for how to communicate the core values of that game. But then, push too hard against the community – and you may lose the whole stream of enjoyable fan art that is generally a sign of a healthy IP. No matter how you look at this, it’s a tough call!
$30 million worth of “counterfeit Lego” seized in China, BBC reports:
“The raid comes as China seeks to strengthen intellectual property rights, with the number of trials hitting a record high last year.”
The photo is not a joke, but a real thing. The job of Lego China’s general counsel, Robin Smith, must be quite challenging.
Tim Sweeney is games industry's Elon Musk
Whenever I see industry news that begins with “Tim Sweeney said…”, I grow concerned because “saying” means Tim tries to argue with some general statements rather than with hard data.
For example, 6 months ago we heard from Tim that EGS will have a number of great features, but we haven’t seen much in terms of actual features or an actionable roadmap. reports
“Epic Games CEO Tim Sweeney said that the company will cease pursuing paid exclusives on the Epic Games store if its main competitor, Steam, were to commit to matching Epic’s 88/12 revenue share model”
On one hand, I’m surprised that a genius like Tim, who is a great programmer, would try to pull this sort of argument in public: the way that Epic and Valve calculate gross revenue and attribute taxes and payment costs are quite a world apart, so comparing the percentile share of two different platforms is pretty meaningless.
On another, I’m not really surprised, because Tim here joins a legion of other geniuses who, having excelled in one field, then work really hard to destroy their reputations in another, where they have little clue about the ethics or substance of the matter.
Consider this: EGS does not have presence in China and struggles with regional pricing, while for Valve non-US and non-EU audiences make, perhaps, close to 50% of all revenue. And where the market is different, the payment options are different, too: from Russia’s QIWI wallets to China’s e-money.
The cost of processing such payments on Steam is currently invisible to its consumers and its developers. When a user in Russia adds 1,000 roubles to their Steam wallet, that means 1,000 roubles on their account – whether the payment cost is 1% or 12% to the platform.
Seeing Tim call Valve to drop their platform’s share to 12% – that would make Steam’s current modus operandi in Russia, China, Vietnam, etc. a net-negative – is like seeing a hotel selling its rooms without any breakfast options call on its competitor (that has breakfast included) to price-match.
It’s either ignorant (i.e. Tim doesn’t even know how Steam operates, financially) or malicious (i.e. Tim knows that what he asks for is impossible, and still asks for it in the public space, acting like a billionaire-provocateur).
Either way, it seems that Tim continues to spend the goodwill that he earned with his previous achievements, building more risk into the possible scenarios where Epic might stumble and he will really need what he would have spent by then.
The tough job of being a lawyer in Turkey
I’ve read about this before, and was wondering if I should share it within the context of the games industry. Then I spoke to a few of the attendees form the global companies who were genuinely unaware of the challenges of being a lawyer in Turkey, and decided to link it.
TL;DR – in Turkey, if you as a lawyer defend someone who is suspected of crime X, the police and the prosecution may call you “a group” that conspired to do X – and arrest you on the same charge. The full report from Human Rights Watch is here.
Whenever you need a lawyer in Turkey, the first and foremost quality to look for, these days, is the personal integrity (which is as hard to come across as it is in Russia).
Neogames reports on Finland's industry in 2018
The report on the Finnish games industry is available here. Certain metrics seem inherited from the olden days, e.g. “number of games released” (who cares, in the era of GaaS?) but there’s still enough hard data to learn something new.
Some highlights:
* the whole games industry of Finland is estimated to employ 3,200 people in 2018, which is less than what Wargaming alone currently employs globally;
* the turnover of the whole Finnish industry is roughly x2 that of Turkey’s games industry (€2B vs €1B) – though if you remove Supercell (har-har!), it’s at €700M;
* the most curious fact that I learned: in 2016, 18% of employees in the Finnish games industry were expats. In 2018, that share increased to an astonishing 27% – almost every 3rd employee is not Finnish, wow!
LEGO does another Chinese exclusive
As reported by the community sites that track LEGO’s releases worldwide, the company plans another (3rd so far) Chinese exclusive called Dragon Boat Race, based on the Duanwu Festival. This sort of regional exclusives from a global company highlights the importance of the Chinese market, which is big enough to sustain products otherwise unappealing in other territories.
What seems like big news to the brick-and-mortar industries, though, has been enabled for years on Steam when Valve started to allow releasing games that do not even support English language. Take a look at this, for example: 東方天空璋 ~ Hidden Star in Four Seasons, a Japanese-only release that, at ¥1512, has nearly 4,000 user reviews (which means sales of approximately 200,000 copies), 98% of which are positive (!!).
$25K for a Yes/No advice?
One of the things that is the hardest to understand for game developers who hire lawyers is how most of the expertise that they buy from a good lawyer is, in fact, invisible.
You’d like to register some trademarks for your upcoming game, and there’s 12 law firms that can do it for more or less the same budget. Why would you choose someone who charges 20% more, if this is a “technical transaction”, asks a brilliant programmer? And, in most cases, goes with the appeal of “low prices + global reach”; only to end up registering some classes that they don’t need and not registering some classes that they do need. But this is discovered years later and by then the developer has already forgotten their approach that landed them in trouble.
Often, what we need as games studios is a simple Yes/No advice: “here’s my situation, should I do this or not?” But what is “simple” in the presentation in fact implies years of experience and dozens of similar cases in the past, for this particular lawyer.
I thought about this when reading a thread on how a 3,000-word article got cut down to 2 sentences in editing, which was the right thing to do – except, to arrive at those 2 sentences, the writer had to write the whole 3,000-word thing first. The thread is here.
SUMMIT: Weather Update
The above is the weather for the next 5 days herein Vilnius. It’s been a totally summer-is +25C this weekend, but it’s bound to get colder as the northern winds pick up. If you’re joining the Morning Legal Run on Thursday, you may want to bring a second layer with you to keep yourself warm while waiting for your run during the relay race!
SUMMIT: Local Beer
Back in 2017, we got the idea that the beer at the Summit must be local, so that you guys get to try something new. In 2017 that was Sakiškių Alus, in 2018 we went with Genys Brewing Co., and in 2019 we invite you to try the beers brewed at Kuro Aparatūra – a rather young Vilnius-based brewery with a strong following. We selected three different beers that are easy to drink and not too strong in alcohol, not to impress you with a “passion fruit ale” but rather to give you a great execution of a classic idea.
Here are the makers, by the way –
SUMMIT: Use your time to meet new people!
This year, we’ve got folks from 33 different countries and allowing you to meet new people who work in the same industry and in the same professional field as you, ranks high on the list of the Summit’s main goals.
If you land on Monday, Tuesday or Wednesday, you’ll be in town with dozens and dozens of peers – why not grab a coffee or a beer with some of them?
Here’s the updated attendee list.
See you in three days (or earlier), people!
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Sergei Klimov

A newsletter about games industry's legal side, written for the benefit and entertainment of the folks attending (or considering to attend) the annual Games Industry Law Summit in Vilnius.

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