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The year 2016 was significant for mobile gaming, at least in my house. For months we anticipated the release of a popular video-game-gone-mobile, and on day one of its release we had four separate phones side-scrolling to collect coins. That game and the New Year have me thinking about what is in store for mobile gaming in 2017.

In 2017, three trends in mobile gaming should raise interesting legal issues for corporate counsel: artificial intelligence, new ways to generate revenue, and alternative realities.

Artificial Intelligence

Many games currently use some aspect of artificial intelligence (AI). The application of AI in games is still rather nascent even though AI technology made a splash in gaming with Go last year. 2017, though, has already started with news about AI's effective use in a poker game, and we should expect to see more of its influence in gaming during the year. The shift will likely be from using AI to create deterministic logic to using it to create probabilistic environments (i.e., to learn from the game play and make the play more dynamic and challenging for the user).

Regardless of how AI shapes mobile gaming in 2017, a few legal issues to look out for if your studio is incorporating AI immediately come to mind.

First, consider whether there is anything about the AI that is patentable or, instead, that is a trade secret. The door may be opening for patenting video games (see our discussion of that issue here). But, many game companies do and will continue to rely on trade secrets to protect their technology. If that is the case for you, make sure that you are proactively taking the necessary steps to secure your trade secrets. The federal Defend Trade Secrets Act has likely put a new focus on trade secret litigation. Studios that rely on trade secrets to protect their intellectual property should take another look at every aspect of their compliance program to secure those secrets. An often overlooked area is whether the employee on-boarding and off-boarding are designed to secure the secrets.

Second, the use of AI can pose legal issues related to data privacy. Depending upon the game concept and the data input used to develop the AI system, there may be some legal exposure. Therefore, it is important to understand the data collected for the AI system, what is done with that data, and then take another look at the relevant privacy policy to confirm that it accurately reflects how data will be handled.

Revenue Models

Monetizing mobile games has always had its challenges, although 2016 offered some new (or newer) solutions. For instance, in 2016, in-game monetization significantly improved from the consumer point of view, specifically, we saw improvements to the ways consumers receive in-game advertising. Many games rely on in-game advertising for a stream of revenue or take a different approach and use an up-front fee model. Yet a third option came from Apple, which now allows developers to use a subscription revenue model. We should expect to see a continuing refinement of revenue models in 2017.

We will see developers become smarter and more creative with in-game advertising. But we will also see more games work with different forms of up-front revenue models. In any event, from the perspective of advertising, branding, customer satisfaction, and risk management, developers should establish clarity about their revenue model with their gamers. Their legal counsel should help ensure that consumers understand what they are paying for and what they are receiving. If any native advertising is used to drive revenue (either to or in the game), counsel should ensure that all of the appropriate disclosures are made where required.

Virtual Reality, Augmented Reality, Mixed Reality

Virtual reality, augmented reality, and mixed reality are the new reality. They are here to stay, and will find their permanence with interactive games. Mobile will not be left out of this trend. However, 2017 will likely still be a year of experimentation, in terms of both the hardware consumers enjoy and the strategies that are found to be effective in mobile. This will present risks and opportunities.

For example, companies entering into licensing or branding deals related to such technologies should consider whether and how to keep their options open and flexible to allow for a developing market.

Geolocation technology will continue to gain traction in this space, but it too offers both risks and rewards. Like AI, geolocation raises privacy concerns. Privacy policies must be clear about what is being done with data taken from consumers. Companies that create games targeted at children should tread very carefully when using geolocation data.

For those games that integrate real locations with the mobile game experience, there may be opportunities for branding partnerships (e.g., companies that are willing to pay to make their storefront a "location" in a particular game). These opportunities will create the usual host of licensing issues. Less obviously, however, the game producer should consider whether any form of disclosure to the gamer about the partnership itself is required.

In a related application, employers may be interested in using geolocation data about employees to track when and where employees are using mobile games, and perhaps discipline employees for this purpose. Some employers are putting language in handbooks about the use of mobile games in the workplace for this express purpose. Mobile game companies themselves may want to consider features that allow their gamers the option to play the game with and without sharing of geolocation data, for example.

Conclusion

For a host of reasons, mobile gaming will offer interesting challenges for corporate counsel with no one theme dominating the 2017 mobile game market. Broadly though, technologies that look to innovate, experiment, and change the way something "is done" in mobile gaming will require frank legal discussions about intellectual property, advertising, and privacy.