Esports advertisers, consumers, brands, investors, and athletes are congregating around streaming game content, competing for the revenue it generates. Juniper Research reports that esports and streaming video game content will generate $3.5 billion by 2021, up from $1.8 billion in 2016. Technological advances in cloud gaming, virtual reality and cross play could accelerate these revenue projections.
Revenue from live or recorded streams comes from advertisements before and after videos, or video advertisement overlays. Game developers are adjusting their legal policies and adopting new technology to balance monetization of streams with facilitating viewership and creativity. As billions of dollars pour into the industry, game publishers, streaming distribution channels, and esports athletes are working to redefine how intellectual property rights and accelerating technology control this rapidly evolving legal and entertainment landscape.
A game developer or publisher legally owns the rights to use of game images and video through copyright law. A game’s copyright holder can use copyright law to limit how their video game is used in online videos and streaming gameplay. For example, a video game developer may refuse to permit legal videos or images from their games, and could have their attorney send unauthorized users of their content legal takedown notices or sue unauthorized game streamers. Streamers have limited legal responses, with, arguably, the strongest legal defense being that the stream satisfies the Fair Use exemption. That’s a narrow rule saying that for purposes such as criticism, news reporting, teaching, and research, permission from or payment to the copyright holder isn’t required.
From a business perspective, developers may adopt user-generated streaming content and game streaming as a fundamental and profitable area of the video game and esports industries. Streaming of video games can expand a game’s user base, drive sales, generate free publicity and foster groups of players who share their gaming experiences with one another. These communities are especially lucrative for advertisers, video game makers, and streamers.
Many prominent video game developers have taken a middle-of-the-road approach, attempting to balance protecting their intellectual property with capturing the benefits of streaming gameplay. Perhaps the best example of video game makers exerting control over user videos and streams is Blizzard Entertainment. Blizzard explicitly allows consumers “to create video productions using Blizzard’s Content” so long as a video is available without charge. This policy limits use of company content to…