The video games industry is dynamic and transformative with innovative business models. With the changing norms of social life and the boost in the usage of mobile devices, the number of people and age range in the digital game industry is increasing day by day.
Early prototypes of video games date back to nearly fifty years. However, technologies and consumer tendencies gradually changed, resulting in a global market with various segments, including console games, PC games, online games, and mobile games. According to Newzoo Global Games Market Report 2021, the global gaming market reached $180.3 billion in revenue with an increase of 1.4% compared to the previous year. In 2020, the pandemic skyrocketed the mobile gaming market to reach $77.2 billion while the audience demographics changed from a particular group of people to a much more diverse population. The number of players continued to increase through 2021, reaching 3 billion players with an increase of 5.33%1.
Turkey has been making a name for itself as a hub for mobile gaming startups, with Zynga acquiring Turkey’s Peak Games for $1.8 billion last year, the first Turkish unicorn, and then following it up with the acquisition Rollic Games for $168 million. There are nearly 600 active video game companies in Turkey, with ongoing local and global investments. In contrast, the industry is supported by private programs and public funds, universities, and incubation centers. As 59 video game companies received venture capital investments in 2021, the total volume reaching 355 million dollars can be considered a sign that the industry will develop further2.
The video games industry has also affected different fields of law with the evolution of technologies and business models. Video games are computer software protected under the Law on Intellectual and Artistic Works (“the Law”). Only some game components are considered copyrightable, and the game’s presentation can be copyrighted as a literary work or dramatic work. In contrast, elements like character design, art, sound, and music can also be copyrighted that create value. Considering the international jurisdictions, digital games in different countries are considered computer programs because they are software, but when evaluated with the flow of the scenario within the scope of the game, they can be accepted as cinematographic work. If the visual and auditory elements have artistic work quality, they can be protected under the Law on Intellectual and Artistic Works. We need to consider that all the participants, such as game developers, licensors, and players, can have intellectual property rights if they have interactive contributions3.
Video game developers have business relations with different parties, including video game designers (an individual or a company), distributors, and online payment systems that are also subject to advertising agreements; sponsorship agreements should be considered by the Turkish Commercial Law. It is forecasted that mutual growth momentum will be gained in the cashless payment sector, especially with companies that offer payment interfaces for games such as Apple and Google Pay in the recent period. The game industry, which is seen as the fastest implementer of technological developments, continues to grow by including the fields of metaverse, cryptocurrencies, and NFT.
While collectors are interested in video game NFTs, which is quite notable from digital property aspects, it is known that in blockchain-based play-to-earn games, players can earn real income according to the amount of time and effort they spend. As such, we witness the creation of a billion-dollar business where gamers sell the items that they create or purchase in exchange for cryptocurrencies, thus making real money. South Korean regulators have banned NFT-applied games in the country on concerns these new services could fuel gambling addiction among teens and demanding the removal of existing ones from the Apple and Google app stores, showing that the gaming market will cause new legislation to be enforced in the future4.
Video game developers and gaming startups must consider their rights in video games along with the applicable compliance procedures during their incorporation, product development, launch, and investment processes. They must fulfill their obligations concerning data security and personal data protection in platforms involving gamers’ individual or collective participation and other obligations arising from interpersonal relationships in interactive games under the Turkish Criminal Code. They must abide by the consumer law, the labor law, and the antitrust law while drafting license agreements, distribution agreements, purchase agreements, labor agreements, etc., during the whole process from incorporation to investing.
Turkey will indeed regulate its video games industry as a global industry player. Therefore, the sector’s entrepreneurs, SMEs, and investors must pay attention to protecting intellectual property, in-game items, and gamers’ rights while following the relevant legislation and amendments.
