The Changing Relationships within Esports: Know Your Legal Rights

The Arcade 2.0™: Video Game Law Blog

Braxton Padgett
Tuesday, 07 November 2017

Once regarded as a niche endeavor, the world of esports is increasingly becoming a part of mainstream culture. Thanks largely to a thriving esports industry in South Korea and the rise of accessible streaming platforms such as Twitch.tv, the last decade has seen an incredible surge in viewership. Esports events, such as Dota 2’s The International, pull in millions of viewers each year excited to root for their favorite team. But as esports has found its footing, the industry has begun to reassess its own structure and the relationship it has with its professional players.

The esports industry is experiencing a time of rapid growth and change.

Esports is currently undergoing rapid change as the industry attempts to catch up with this blossoming market. Up to this point, the industry has been characterized by a hotchpot of privately run tournaments and teams that too often disband just as quickly as they appear. Now, major game developers are attempting to stabilize the industry by shifting to a franchise model. Last November, Blizzard Entertainment Inc. revealed the Overwatch League for its game Overwatch, which embraces a model far more reminiscent of traditional sports. Overwatch League franchises are tied to specific cities around the globe and sold to team owners for millions of dollars. In June, Riot Games Inc. revealed that it will roll out a similar franchise-based esports league for its massively popular game League of Legends.

With the move to franchising, the relationship between developers, team owners, and the professional players themselves will undoubtedly evolve. Whereas professional players currently have little job security, with Overwatch League, developer Blizzard Entertainment Inc. has mandated that players receive a minimum salary of $50,000, a one-year contract, health insurance, retirement saving plans, and a share of prize pool money won in tournaments. Team owners must comply with these requirement, but stand to benefit from a more streamlined and stable esports ecosystem. Developers, on the other hand, are using these franchised leagues to maintain greater control over how their intellectual properties are presented on the tournament stage. The dynamics for all parties involved is shifting.

As the relationships in the industry change, so too will the legal challenges. Despite the heightened stakes, too often those within the esports industry fail to seek legal counsel to ensure that their rights are protected. Developers, team owners, and professional players alike must often navigate a complicated web of state and federal laws as they enter into contracts and operate in the industry. Just as with players of traditional sports, esports players are prone to medical injuries often associated with repetitive use. Similarly, team owners must ensure they comply with state workers’ compensation laws and federal health laws. Like any business, developers and team owners must also carefully manage their intellectual property portfolios, including any trademarks or copyrights owned by the organization. Especially as esports grows, some players will increasingly face issues surrounding their right to privacy and right of publicity. The failure to get ahead of these issues now can lead to costly litigation and negative publicity for those involved.

As the relationships between developers, team owners, and professional players evolve, it is important to seek legal counsel.

The world of esports is experiencing a time of significant change as the business model of various leagues begins to shift to one that more closely resembles traditional sports. These changes may lead to a healthier esports industry, but as the stakes are raised, so too will the consequences of failing to address legal challenges as they present themselves. If you are a game developer, team owner, or professional esports player, here are a few things you should consider:

  • Know your rights. The web of state and federal laws surrounding esports is complicated. If you’re unsure of your rights, pick up the phone and call an attorney.
  • Get ahead of the issues. It’s always easier to prevent a legal problem from occurring than it is to clean it up later. Seek legal counsel before entering into any contract and to ensure compliance with state and federal laws.
  • Put your trust in experienced attorneys. Attorneys experienced in the law surrounding esports are best positioned to help you find desirable solutions for your legal problems.

If you’re a game developer, team owner, or professional player and want to know more about your rights, have questions about the law, or you’re facing potential litigation, please Contact Us.



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Watson LLP is a United States based law firm practicing in the areas of intellectual property, entertainment law, litigation, government investigations, and eDiscovery. The firm has offices in Atlanta, Los Angeles, New York, and Orlando. For more information, please visit www.watsonllp.com.

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