Is the word “RIOT” now so attached to the company Riot Games that no other company can use the word in its name? Riot Games seems to think so based on its recent initiation of a lawsuit in the U.S. District Court for the Central District of California.
Zachary Zaggar of Law360 recently wrote an article titled, “Riot ESports League Looks To Align With Traditional Sports.” A subscription is required to read the full article.
Therein, the discussion surrounded the League of Legends developer and publisher deciding to adopt a franchise model. The assumption is that it is trying to frame esports in a similar fashion as traditional sports.
Heitner Legal lawyer Darren Heitner was quoted therein as an attorney with experience representing various individuals and entities in the space. His believe is that the franchise model will hedge a lot of the perceived risk attached to the still widely unknown esports industry.
It was very exciting to read that the BITKRAFT Esports Ventures fund announced a raise of 18 million Euro with a target close of 30 million Euro. The news broke this morning, which I reported on Forbes, and as you will note, there is a disclosure indicating that HEITNER LEGAL assisted in the diligence for one of the investors involved.
BITKRAFT, which officially launches today, describes itself as the first esports specific fund that is focused exclusively on incubating, building and investing in esports startups.
At HEITNER LEGAL, we specialize in a wide array of sectors, including the rapidly expanding esports industry. It was an honor to conduct diligence for Inner Circle Sports prior to it committing to an investment in BITKRAFT.
ESports, also known as competitive gaming, has gone from an industry mostly featuring amateurs to an industry with professional players and now even includes the creation and maintenance of professional teams. Professional gamers on teams may receive a salary, tournament prizes and team sponsors sometimes cover travel expenses as well as gaming hardware. On top of the existence of teams, there are also associations such as the Korean e-Sports Association, United Kingdom eSports Association, and the International eSport Federation. The rise of eSports has resulted in numerous video game developers building features in their games in order to facilitate competition. Further, as of 2013, an estimated 71,000,000+ people worldwide have watched an eSports competition with most competitions taking place in North America, Europe, and China. With its ever-growing popularity, competitions are now streamed online on a platform known as Twitch.tv, which has experienced tremendous growth.
eSports has seen most of its growth in the past fifteen years in the number of tournaments and participants in tournaments, thus enabling a substantial amount of prize money to be awarded as well as increased television coverage of these tournaments. For instance, as of 2010, there were over 260 large eSports tournaments worldwide. Further, in 2006, FUN Technologies Worldwide Webgames Championship featured a $1 million grand prize to compete in casual games. Although television coverage of eSports has not been entirely successful, Twitch.tv has enjoyed enormous success with over 12 billion minutes of video watched by viewers in 2013 alone.
Video game developers have embraced their success in a whole new way by creating outreach programs at the collegiate level in order to cultivate talent. In fact, Robert Morris University Illinois and University of Pikeville in Kentucky have recognized eSports competitors as varsity level athletes and have even offered athletic scholarships.
The success of eSports has led to the question, “Are we coming to the time where eSports is considered a sport?” Many believe this notion is laughable, but when Amazon bought out Twitch.tv it made people realize that they can longer overlook eSports as a possible up and coming sport. Just like in professional sports, professional gamers have rules they must adhere to or face repercussions such as fines as well as suspensions. For instance, professional gamers are expected to have good sportsmanship; however, there are professional gamers that have been suspended from competition for having a history of verbal abuse. Further, professional gamers, like some notable professional athletes, have looked to gain an edge over their competition by using performance enhancing drugs, which has led to leagues to impose a policy where use of any drugs during matches will result in expulsion from competition.
The success of eSports has been great for industry and professional gamers, which has made it essential to obtain strong legal counsel in the area of Sports Law. A lawyer can be helpful with negotiating and drafting contracts, understanding the advantages and disadvantages of the different corporate structures, rules violations/performance enhancing drug use penalties, and even player exploitation.
HEITNER LEGAL can assist with drafting and negotiating contracts, breaking down the corporate structures and advising which would be most beneficial to the client, discussing the options for a professional gamer who has violated any rules, and ensuring that a professional gamer is not being exploited and being fairly compensated. Additionally, we can ensure that professional gamers and teams continue to be treated fairly and earn compensation commensurate to the success of the industry as they are essential to its success.
Matthew Jarvis, Understanding eSports: A Brief History of eSports, The Market for Computer & Video Games (January 16, 2015), http://www.mcvuk.com/news/read/understanding-esports-a-brief-history-of-esports/0143925
Igor “Jason” Djuricic, History of eSports, (June 5, 2015), http://blog.zengaming.co/article/history-of-esports/