News Round-Up –

What’s the latest on the Microsoft & Activision deal?

The video games industry’s largest merger is now one step closer to crossing the finish line. On 22 September, the UK Competition and Markets Authority (CMA) gave preliminary approval to Microsoft’s takeover deal of Activision Blizzard following Microsoft’s proposal to divest the cloud gaming rights for current Activision Blizzard titles and any future releases for the next 15 years to Ubisoft.

The CMA’s reservations toward full approval are based on its “limited residual concerns” that certain conditions of selling cloud gaming rights to Ubisoft will not be enforced or may be circumvented. Microsoft has addressed these concerns and the CMA has now opened a consultation to fully consider these remedies. Microsoft and Activision Blizzard view this positively and were hoping to finalise the deal by this month’s extended deadline. There is no doubt the industry will keep their eyes peeled as the CMA is expected to make their final decision this month.

Epic Games Store to trade revenue share for exclusivity window

This month Epic Games launches a new opt-in Epic First Run Program, trading the company’s revenue share in the first six months of a game’s release in exchange for exclusivity on their Store.

In a directly competitive move against Steam, this program will offer more financial incentives for developers to release their games on the Epic Games Store. This program will only apply to products launching on or before the launch date this month, and developers can stand to benefit from an increased promotional push, according to Epic.

Industry faces mixed approaches to Generative AI

Reports that Steam is rejecting games with AI-generated content from its platform is now front-of-mind for developers. Valve (developer of Steam) has since clarified its position, stating that developers can use appropriately licenced AI technologies in their work, but cannot infringe on existing copyrights. Similarly, Humble Games has announced it may restrict AI usage in future publishing contracts in order to steer clear of any potential legal pitfalls caused by generative AI.

In direct response to this, we are also seeing that Epic Games is welcoming games with AI-generated content. It will therefore be interesting to see how the industry continues to evolve its mindset on generative AI.

The Tetris Effect author claims filmmakers copied his story

Dan Ackerman, author of ‘The Tetris Effect’ filed a lawsuit in a Manhattan federal court claiming that Apple and the Tetris Company has infringed his copyright of the book in the 2023 film adaptation, starring Taron Egerton.

According to Ackerman, the film “liberally borrowed” specific sections of his book and claimed the Tetris Company refused to license its intellectual property for film and TV adaptations of his book by issuing a “strongly worded cease and desist letter”. An option agreement for the book would have prevented the lawsuit, but it is now up to the courts to decide whether the film is considered an unauthorised adaptation.

Unity faces widespread backlash over new ‘Runtime Fee’ model

In September, Unity faced overwhelming criticism following the announcement of its new fee model which will charge video game developers each time their games are installed. This new fee is proposed to come into effect from January 2024 and will be as high as $0.20 per install. This fee will apply subject to certain eligibility requirements.

Developers raised concerns about the new model, including the financial impact this will have on developers who now need to factor in this fee to their existing Unity licence fees and the practical issues calculating and managing the fee going forward. Unity has addressed some of these concerns, for example, by clarifying that the install fee will only apply to initial installs and installs on additional unique devices.

Unity later announced changes to the Unity Personal plan to win back smaller developers by improving the Unity Personal plan including its exemption from the Runtime Fee, increasing the cap on this plan to $200,000 and removing the requirement to use the ‘Made with Unity‘ splash screen. For Unity Pro and Unity Enterprise, developers will now have a choice between the Runtime Fee or a 2.5% revenue share, with Unity billing whichever is lesser of the two.

The general impression is that Unity has shattered the trust it had with developers by unilaterally changing its pricing model. While Unity has already taken steps to water down the Runtime Fee, only time will tell whether it is too little too late for many developers using or planning to use Unity.