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Category — Distribution Agmt Cases

GameIndustry.biz: Introversion Software – The Evolution of Distribution

Categories: Digital DistributionDistribution Agmt CasesFeatured ArticlesNew Business ModelsStartup Game Developer Issues

GameIndustry.biz Article: "The Evolution of Distribution". This GameIndustry.biz feature article discusses Introversion Software's fierce independence and success with digital game distribution.  

Source: GameIndustry.biz

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Microsoft (Accidentally) Giveth, Microsoft (Intentionally) Taketh Region Code Work-a-Round Away

Categories: Distribution Agmt CasesDRMGrey Market CasesImport/Export CasesRegion Coding Cases

If a recent post I mentioned that some clever users found a way around Microsoft’s XBox 360 region-specific Market Place movie and video demo download restrictions. The trick was to take advantage of Microsoft’s free XBox Live Accounts. A user in one jurisdiction could create multiple silver-level (a.k.a. free) accounts by simply stating in the online sign up process that they live in a another download-frinedly jurisdiction. Paid movie downloads, trailers, game demos etc. would then be available available through the alternative silver-level account in jurisdictions that Microsoft did not intend.

After only weeks of being out in the wild, Microsoft has patched this work-around. Now only users that have credit cards with billing addresses that match the purported region can download content for that region. Happily Microsoft is not banning these extra accounts, they are simply restricting their access to region-coded content.

As a lawyer, this is understandable. As a user, this is sad. Having previously lived in the U.S.and having access to virtually anything the Internet can deliver, it is a very rude awaking to move back to a 2nd tier jurisdiction like Canada where so many Internet-based services are either not available, delayed, provided at higher price points or provided with less functionality. Microsoft’s new movie download service is a perfect example of this regrettable phenomena.

Presumably a Canadian with an American credit card and billing address could still circumvent the system for instance. Humm… as a holder of several U.S.-based credit cards, I wonder which of my U.S. buddies would allow me to use their address for credit card statement receipts? :)

Sources: TeamXbox | Major Nelson | Xbox 360 Fanboy | Hexus | Pro-G | EuroGamer | PlanetXbox | Gamasutra | Joystiq

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Users Find Work-a-Round to Defeat 360 Marketplace Region Coding

Categories: Distribution Agmt CasesDRMGrey Market CasesImport/Export CasesRegion Coding Cases

If you follow Major Nelson’s (Larry Herb’s) day-to-day missives about what is available for download through the Xbox 360 Marketplace, you’ll note that many arcade games, game demos, trailers and other downloadable content is only available in certain regions of the world. This has lead to much consternation among Microsoft’s international customers. But the issue was brought to a head recently when, for the first time, North American XBox Owners were initially restricted from downloading a Rainbow Six: Las Vegas demo that was available for download by European users. This doesn’t happen very often to U.S. customers.

As a result, some clever users found a way around Microsoft’s XBox 360 region-specific MarketPlace download restrictions. You can read about them in the linked articles below.

Dale’s Comment: Just as Sony had legitimate legal reasons for opposing Lik-Sang’s import of PSP systems into the UK, no doubt Microsoft has legitimate legal reasons for restricting access to content on a country by country basis. For example, game publishers/developers that provide downloadable content to Microsoft probably have granted exclusive distribution/marketing and other rights to that content in the prohibited regions to others. My hope/expectation is that over time licensing and distribution deals will be structured to recognize the increasingly globalized nature of the market so as to anticipate and, indeed, facilitate global distribution/downloads without this kind of constraint.

Sources: Gizmodo | SAGN

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Sony Wins U.K. Lik-Sang Grey Market Case – Lik-Sang Shuts Down

Categories: Distribution Agmt CasesGrey Market CasesImport/Export CasesStruggling FirmsTrademark Cases

Sony has won a High Court Judgment in the U.K. banning Hong-Kong based Lik-Sang.com from selling PSP consoles into the European Economic Area. While Hong-Kong-based Lik-Sang did participate in pre-trial activities, it did not show up in court to contest the case. Thus, a default judgment was awarded to Sony.

This action was launched in August of 2005 when Lik-Sang sold PSPs into Europe after Sony delayed North American and European shipments for many months after the Japanese PSP launch. The same sort of delay is about to occur with the PS3. Sony is launching the PS3 in the Japanese and North American markets months before Europe.

[October 24 Update:]After years of fighting Sony, Lik-Sang has closed its e-doors. In an interesting side-story, Sony’s European management purchased Sony products from Lik-Sang when unavailable in Europe (See BBC Story). Pascal Clarysse, former marketing manager for Lik-Sang, had this to say on closing:

“Blame it on Sony. That’s the latest dark spot in their shameful track record as gaming industry leader. The ‘empire’ finally won. A few dominating retailers from the U.K. probably will rejoice (in) the news, but everybody else in the gaming world lost something today.”

Sony dismissed this as sour grapes. A similar Hong-Kong-based case between the parties continues.

Dale’s Comment: I understand Sony’s need to protect the interests of its European distributors and its trademarks. I also understand its wanting to protect its own economic interests by means of region-by-region product launches. But its claim that the lawsuit was brought to protect consumers’ safety is, of course, nonsense.

In a world of global markets with the ability to deliver products throughout the Globe overnight, one wonders if this market-by-market distribution model is appropriate any more. It certainly is far from consumer friendly or fair. Lik-Sang met a real consumer need. Through Lik-Sang, Sony’s most loyal fans had a means to purchase Sony products long before Sony had the wherewithal to launch/distribute products in their particular country. Sometimes it takes years before Sony launches a product into a given market (if ever). With this ruling, there is no legal way for etailers to sell into markets not served, or underserved by Sony and its resellers.

As a Canadian living right next to the U.S., I have oft experienced the frustration of not being able to purchase products and services only made available in the U.S. I relish the fact that etailers such as Lik-sang are willing to serve the needs of consumers in under-served regions of the world.

Lawsuit Stories: Gamasutra | Engadget | GameIndustry.biz | GameSpot | *GameDaily.biz | PC Pro | IGN | ars technica | TVG | BetaNews | Pocket-lint | GameIndustry.biz| Daily Tech

Lik-Sang Closing Stories: Lik-Sang.com Notice | Gamastura | ars technica | Outlaw.com | ZDNet | Engadget | BBC | GameSpot | GameDaily.biz | GameShout | CNet | afterdawn | PC Pro | IGN | NeoSeeker | Pocket-Lint | Gizmodo | Inquirer | Hexus | GameIndustry.biz | EuroGamer | Kotaku | Gadgetspy | PC World | Games Digest

Blogosphere: Bit-tech.net

Engadget Podcast 93 Coverage (Time Index 4:44-12:33).

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WWE Sues THQ – Claims Unauthorized Sublicensing

Categories: Distribution Agmt CasesLicensed Game CasesRoyalty Disputes

The WWE filed a lawsuit against THQ on October 12th claiming games using the WWE trademark were improperly sold in Japan and Asia. The WWE is seeking a declaration that it has the right to terminate its license agreement with THQ.

WWE claims that THQ sublicensed out rights to the game that they were not granted the right to sublicense. Indeed, WWE claims that the license explicitly precludes sublicensing without written consent from the WWE which such consent was not sought nor received.

WWE claims that THQ sublicensed rights to Yukes (partly owned by THQ) and that Yukes paid royalties directly to THQ that should have been paid to WWE.

THQ, for its part, says that WWE has been aware aware of and consented to the manner of distribution it uses in Japan.

Sources: Gamasutra | Pro-G | GameSpot 1 | *GameSpot 2 | Gamers.com | XBoxic | THQ Press Release

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GameStop Launches Internet Distribution Service ‘Download Now’

Categories: Digital DistributionDistribution Agmt CasesNew Business Models

GameStop has launched its new Internet-based digital distribution service “Download Now“. The service launches with some 1,000 titles including games from Capcom and Eidos.

Dale’s Comment: Internet video game distribution is an inevitability. The only thing surprising about this is that it took GameStop this long to get into the game that Valve has been in for several years with its Steam digital distribution system. I believe third party digital distribution has a very bright future. GameStop may face the same challenge that the likes of Cinema Now and others have faced in the context of online movie distribution – an industry reluctant to share revenue from 3rd party online distributors in the hopes it can bypass such distributors. But just like movies, in the main, I believe gamers won’t want to surf from publisher web-site to publisher website when searching for online game purchases. They’ll want a choice of one stop online game aggregaters just as they have a choice of brick and mortar shops to shop for games today.

Sources: Gamasutra | GameDaily.biz | GameIndustry.biz | Next Generation

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Square Enix Sued for Return of $3.78M Royalty Payment

Categories: Distribution Agmt CasesRoyalty Disputes

Soft-World International has filed a lawsuit against Japan-based Square Enix, alleging that the Japanese company has failed to comply with a distribution agreement and demanded Square Enix pay back a royalty payment of US$3.78 million. Soft-World claims Square Enix failed to provide source codes as contracted.
Sources: DigiTimes  |  GameIndustry.biz  |  MMORPG blog

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The Good News About Digital Distribution

Categories: Digital DistributionDistribution Agmt CasesFeatured ArticlesNew Business Models

Attorney Tom Buscaglia discusses some of the advantages of digital distribution for today’s video game developer – including higher profits, retention of IP rights and new funding models.

Source: GamaSutra Feature

Related Stories: GameIndustry.biz | CNet | Joystiq | 1Up.com

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GMX Refutes Tesseraction’s Court Victory Claim

Categories: DecisionsDistribution Agmt CasesRoyalty Disputes

The two-year legal battle between GMX Media and Tesseraction Games appears not to be settled contrary to Tesseration’s claim.

Source: GameIndustry.biz

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Tesseraction Games Claims Summary Judgement Victory Against GMX Media

Categories: DecisionsDistribution Agmt CasesRoyalty Disputes

Text of September 23, 2003 Complaint
The lawsuit alleged that GMX Media failed to produce timely and accurate sales and royalty accounts, failed to pay royalties from sales and interest on delayed royalties, distributed the title in countries outside of those defined in the agreement, and distributed the title in packaging that was not approved by Tesseraction, contained altered text and omitted vital game support information.

Source: GameIndustry.biz

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Kylotonn Severs Digital Jesters Ties

Categories: Distribution Agmt CasesPublisher/Developer CasesStruggling Firms

Representatives from French developer Kylotonn Entertainment have announced that the company has terminated its distributing and publishing agreement with UK-headquartered publisher Digital Jesters with immediate effect, complaining of a series of breaches of contract.

Source: Gamasutra

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The (New) Dawn of Digital Distribution

Categories: Digital DistributionDistribution Agmt CasesNew Business ModelsNew Tech

Every multimedia conglomerate and its sister company wants in on the digital distribution market, but is it finally ready for prime time?

Source: GameSpot | Earlier Related Story: GameSpot (Nov. 9, 2004)

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Sony Sues Online Retailer for PSP Sale

Categories: Distribution Agmt CasesGrey Market CasesImport/Export Cases

Hong Kong-based online retailer Lik-Sang.com is by Sony Computer Entertainment Europe for selling Japanese PlayStation Portable systems to UK customers ahead of the PSP’s European debut in September.

Sources: IGN | CNet | Gamasutra | GamaeIndustry.biz | Channel Register | PSPWorld | ZDNet | IGN IQ | CD Freaks | Out-Law.com | Softpedia | GamePro.com | Lik-Sang Press Release

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Valve & Vivendi Universal Settle Distribution Dispute

Categories: Distribution Agmt CasesPublisher/Developer CasesSettlements

The settlement provides for a complete severing of the publisher/developer link. Under VU Games is required to cease distribution of Valve’s games – up to and including Half-Life 2, and Valve properties developed by other companies, such as Counter-Strike Condition Zero – on August 31st.

Sources: GameIndustry.biz | Gamasutra | ign.com | Gamespot | ars technica | Yahoo! Games | Wikipedia | Mega Games | Valve Press Release

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Vivendi Barred From Distributing Valve Games in Cyber Cafes

Categories: DecisionsDistribution Agmt CasesPolice ActionsPublisher/Developer Cases

Judge Zilly ruled that Sierra/Vivendi Universal Games are not authorized to distribute Valve games through cyber cafés to end users for pay-to-play activities pursuant to the parties’ current publishing agreement. Valve games such as Counter-Strike, Counter-Strike: Condition Zero and the recently released Half-Life 2 and Counter-Strike: Source are all popular in cyber cafés. Judge Zilly also ruled in favor of the Valve motion regarding the contractual limitation of liability, allowing Valve to recover copyright damages for any infringement without regard to the publishing agreement’s limitation of liability clause

Sources: Gamespy PC | Yahoo! Games | ign.com | ars technica | BBC

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Valve and Vivendi Sue and Counter-sue Over Distribution Agreement

Categories: Distribution Agmt CasesPolice ActionsPublisher/Developer Cases

On August 14, 2002, Valve served its then-publisher Sierra On-Line (now Sierra Entertainment, a Vivendi Universal Games brand) with a lawsuit in the US District Court of Washington, Western Division, alleging copyright infringement–the result of Sierra distributing Valve games in Internet cafés in the US and abroad. Vivendi accuses Valve of deliberately misleading them and had counterclaimed that Valve’s distribution of Half-Live with Steam had adversely affected its retail plans. Under their distribution agreement Vivendi can release Half-Life up to six months after the game goes gold. Valve says that Vivendi has not announced the date it will be released.

Sources: Gamespot | Yahoo! Games | EuroGamer

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