Executive Ownership
Depending on the jurisdiction, video games and their various elements can be protected through intellectual property laws and international treaties.[1] Crucially, the persons who enjoy intellectual property rights also dictate the terms for the production and consumption of esports. Developers/publishers, depending on the legal arrangement between them, have the ultimate say over a video game.
A term coined by Dr Veli-Matti Karhulahti, “executive ownership” explains the roots of the current legal and governance landscape in esports.[2] As executive owners, rightsholders have large discretion over a video game. They can publish them, exploit the rights related to them, cease supporting them, and even discontinue them. Since there is ownership over video games, esports competitions that are based on them are intricately related to the consequences of this legal status. Generally, if a video game becomes the basis of an esports competition without the consent of the executive owner, the competition organiser would infringe upon the executive owner’s intellectual property rights.
Rightsholders can introduce specific licensing processes to protect their rights and ensure oversight over esports competitions based on their products. These processes depend on the strategy of the rightsholder. For instance, Blizzard, publisher of the Overwatch series, used to organise esports competitions based on its games. However, due to declining interest and income, it discontinued the competitions and decided to allow third-party organisers to organise top competitions.[3] Similarly, for smaller and amateur Overwatch competitions, Blizzard introduced separate licensing procedures, terms, and conditions.[4]
Intellectual property rights and accompanying licenses also bring about tensions and disputes between executive owners and third parties who want to organise esports competitions through licensing. Continuing with Blizzard, the executive owner of the popular StarCraft series, had a dispute with the Korea e-Sports Association (KeSPA) in 2010. Despite the popularity of the video game (to the point that it introduced esports to the masses in South Korea), the executive owner stopped organisers from using StarCraft from as the basis of esports competitions. Essentially, esports competitions ceased for this video game.[5] More recently, the disagreement with Activision Blizzard and NetEase–the company that distributed Overwatch, among other Blizzard titles in China–resulted in most titles of the publisher being unavailable in the country.[6] Hence, the executive ownership of Blizzard as protected by intellectual property rights ne, and accordingly, they rendered esports negatively impacted Chinese gamers and competitions based on almost all esports activities based on Activision Blizzard games.[7]
The European Union (EU) has noted the prevalence of developers/publishers and executive ownership in esports. In 2022, the European Parliament, the EU’s legislative body, passed a resolution on esports and video games.[8] When determining the characteristics of esports and video games, the resolution underlined that sports and esports are different. It stated that video games “belong to private entities that enjoy full legal control and all exclusive and unrestricted rights over the video games themselves”.[9] Essentially, the EU’s official viewpoint determined that the intellectual property rights that undergird executive ownership in esports having a different status than sports. Similarly, the fact that the core of esports is video games led the International Olympic Committee (IOC) to declare in 2018 that “the [esports] industry is commercially driven, while on the other hand the sports movement is values-based”.[10] Although the claim is open to criticism,[11] it shows that the nature of the esports sector creates prejudice in the eyes of one of the crucial actors.
Consequently, executive ownership, which is based on intellectual property rights, allows video game developers/publishers great control over their video games. On the one hand, such ownership allows the developers/publishers to exploit their products and shape the esports sector. The executive owners can organise esports competitions or dictate to third parties the terms for organising these competitions through licensing agreements and procedures. On the other hand, the extent of influence over video games and esports competitions, as well as the fact that the sector is intellectual property- and commercialisation-driven, has led to negativity. As seen in the official stances of the EU and the IOC, crucial actors view esports activities in a different light than sports activities.
[1] C Lunsford, ‘Drawing a Line between Idea and Expression in Videogame Copyright: The Evolution of
Substantial Similarity for Videogame Clones’ [2013] 18 Intellectual Property Law Bulleting 87, 93-100
[2] V-M Karhulahti, ‘Reconsidering Esport: Economics and Executive Ownership’ [2017] 74 Physical Culture and Sport – Studies and Research 43
[3] Kat Bailey, ‘Overwatch League Officially Ending as Blizzard Focuses on “New Direction”’(IGN Website, 8 November 2023) <https://www.ign.com/articles/overwatch-league-officially-ending-as-blizzard-focuses-on-new-direction> accessed 16 September 2024
[4] Overwatch Esports Website, ‘Community Competition License Conditions for Overwatch’ <https://esports.overwatch.com/en-us/third-party-license> accessed 16 September 2024
[5] TL Taylor, Raising the stakes: E-sports and the professionalization of computer gaming (MIT Press 2012) 162
[6] Activision Blizzard Website, ‘Blizzard Entertainment and NetEase Suspending Game Services in China’ (2022) <https://investor.activision.com/news-releases/news-release-details/blizzard-entertainment-and-netease-suspending-game-services> accessed 16 September 2024
[7] The video game Diablo Immortal was the subject of a separate agreement between Activision Blizzard and NetEase concerning its co-development and publishing. ibid.
[8] European Parliament resolution of 10 November 2022 on esports and video games (2022/2027(INI)). <https://www.europarl.europa.eu/doceo/document/TA-9-2022-0388_EN.html> accessed 16 September 2024
[9] ibid, par 28
[10] IOC Website, ‘Communique of the 7th Olympic Summit’ (2018) <https://olympics.com/ioc/news/communique-of-the-7th-olympic-summit> accessed 16 September 2024
[11] C Abanazir, ‘Of Values and Commercialisation: An Exploration of Esports’ Place within the Olympic Movement’ [2022] 16:4 Sport, Ethics and Philosophy 397
