When I was a kid, on days when we couldn’t play outside, my friend Mike and I would play Pong on our TV sets. Growing up in the Los Angeles area, many of our friends wanted to be in Hollywood. Now, the video game industry has earned more than Hollywood movies for years.
The San Diego Union Tribune has a great story on the opportunities and risks of the mobile app community. Appy Entertainment (motto: “deadly serious about stupid fun”) is based in Carlsbad, CA, and one of its founders is Chris Ulm, a friend of mine from Sutter Junior High School. One of Chris’ Appy co-founders said that
“One of the reasons we did this start-up is we saw this as the opportunity of the century . . . . The way mobile has grown since the iPhone was launched, it’s historic. But also, we want to create new things. And the video game business became so risk adverse because the budgets were so high.”
Mobile gaming apps, an industry that didn’t really exist four years ago, has now moved on to its second incarnation, in which the products are free, but in-game purchases for the apps cost money. This creates its own set of problems, especially when it is just an Apple App Store account that is charged: never mind kids ordering things without their parents’ approval, certain middle-aged attorneys have had problems mistakenly ordering more puzzles while helping his son on a kids’ app. Not only does the game now have to be entertaining, it has to have in-game items worth buying. But for addictive games, the revenue stream can continue long after the last game is downloaded. Legal headaches await, though, for in-game purchases that are not clearly marked as to price or purchasability. Already one child paid $1400 for “Smurfberries” (a Smurfs app “currency”), and an attorney in Philadelphia has filed a class action suit because his daughter racked up $200 in in-game purchases.
The rapid evolution of the mobile gaming industry echos the Internet boom of the late 1990s, when websites raced to fill the empty niches of the Internet. Good ideas like Google and Amazon flourished, while pets.com and webvan.com couldn’t deliver the goods efficiently to customers. Eventually in mobile gaming a few mega-winners will arise, while smaller successes will fill the niches in between.
Plenty of legal questions will arise. I can’t sell an all-new Gucci handbag from my office – but can I sell its doppelgänger in my lifestyle game, if I don’t use the Gucci name on it? If I (legally) reverse engineer the code to someone else’s game, can I sell in-game items for that game? If I have a valuable in-game item like a special sword, can I sell it? Should the video game company get a share of the proceeds? And what is going to happen when someone counterfeits “smurfberries” or other currency in the game? Intellectual property attorneys look forward to making a living off such momentous questions.