Metro Detroit is uniquely poised to become the next epicenter of a growing industry: competitive video gaming, or simply eSports. An emerging form of entertainment that is particularly popular among the teenage and college-age crowd, eSports had its first major metro Detroit debut this August, when Little Caesars Arena hosted the League of Legends Championship Series summer finals. Detroit’s storied sports history, as well as its growing reputation as a technological pioneer made it particularly attractive to Riot Games when it decided to bring this event to the Motor City.
The tournament attracted more than 10,000 “live” fans to the city and the arena, with tens of thousands more watching a live-stream on Twitch. Metro Detroit is also home to gaming lounges, arcade bars, and even competitive video game teams based around local schools and universities. Competitive video gaming is increasingly mainstream and is making a grab for a share of the entertainment market.
So where do lawyers and business owners get involved? Surprisingly, there are no dedicated eSports law firms or eSports lawyers in Michigan. I’m not even sure if there are eSports agencies representing Michigan players or Michigan-based teams. Professional gaming, like professional football, tennis, baseball, etc., is a legal minefield for the unwary. Additionally, eSports participants and professionals tend to be younger, without professional representation, and especially vulnerable to predatory market practices. And, eSports is sufficiently unique to require a specialized knowledge base and background. Your 65 year-old uncle the real estate lawyer is unlikely to know the difference between streaming on Twitch and Discord, or meaningfully converse about the games themselves.
Get someone who knows both the law and video games. The classic “Legend of Zelda” line rings true: It’s dangerous to go alone! Take this (advice):
- Before signing ANY contract with ANY team, sponsor, representative, etc., consult with an attorney. Preferably with an eSports attorney like myself, who actually knows the games, terminology, and the other aspects of the competitive gaming world.
- An eSports attorney can act as your agent and advise you regarding things like your rights and obligations, contract termination, payments, taxes, and other “legal” aspects. An eSports attorney can help you protect your career, revenue stream, and potential winnings, while you can completely focus on the gaming and building your brand.
- Do not assume that because you are part of a school team that you are automatically protected.
- There are many professional teams out there, for every game. There are also many unscrupulous owners who will take advantage of you, and pressure you to sign contracts with disadvantageous terms.
- Merchandising and general intellectual property are big money, but often overlooked. As a pro gamer, you will likely receive a salary, but you also stand to make a lot of money through sponsorship. For example, if Mountain Dew calls you up and offers big money to drink their products during your live stream, who owns those rights? Who gets the money?
- And, like with any business, the more it grows the more trouble it attracts. Did you create a signature kill shot or a unique move that gained you 1,000 new followers on Twitch? Then, the next day you get a “cease and desist” letter, accusing you of stealing someone else’s move. What to do? You need to have a trusted professional to help
- Another question that will come up sooner rather later is how to deal with the social media aspects – especially the negative trolls. Can you send “cease and desist” letters? What legal options do you have when someone defames you on Facebook?
- You may also want to incorporate at some point. A single-member LLC is a simple, cheap, and effective corporate form that you can set up to protect your craft, creations, and work from any sort of liability – such as adverse copyright claims for example. An LLC can have a single member/owner, and is the preferred business form of solo business operators.
Video games are big business and are a growing sector of the entertainment world. The $865 million (plus) global industry is continuing to expand worldwide, including to Metro Detroit. The emerging market means there are more players, more teams, more brands, and more potential pitfalls than ever before.