In their Global Cloud Gaming Report, Newzoo forecast that the games market would grow by 19.6% to $174.9 billion in 2020.
Of that, cloud gaming was estimated to generate revenues of $585 million and it’s a growing market. Even before the pandemic (remember those days?), game sales were booming and, in 2019, video game revenues overtook worldwide book sales for the first time.
Cloud gaming in particular is proving to be hugely popular as it relies on streaming from the cloud to users’ devices reducing the end-users requirement for expensive hardware and providing access to a catalogue of games remotely.
Through a review of data collected and manipulated by Clarivate, I take a look at the intellectual property (IP) trends in gaming to see what can be learnt from the corporate giants, and what this tells us about the future of cloud gaming.
Topping the leader board are Microsoft, Tencent, Nvidia, Sony, and Google, which have launched (or are close to launch) cloud gaming offerings. These ‘Big Five’ take their IP strategy seriously as otherwise their titles as major players would be lost.
Patents
Years before the launch of a new product or technology, entities within the gaming ecosystem file patents to protect their inventions. It is possible to see that a disruption to technologies in the video gaming sphere occurred in around 2010, when there was a surge in patent applications for multiplayer enablement technologies. In 2011, these numbers were briefly approximately matched by inventions relating to commercial models, payments and transactions, but the number of patent applications for multiplayer enablement technologies continued to increase and accounted for more patent applications for gaming-rated tech than any other until mid-2014.
While the overall numbers of patent filings in the gaming arena reduced from then, inventions relating to streaming technology, latency reduction and user experience became the largest area of patent filings from mid-2014 until 2018. In particular, of these patents, only 17% were filed by game developers and publishers, whereas 49% were filed by cloud platform/console developers. On average, it takes 7.5 years from the first patent filing to a technology going live (shorter if relying on other technology that has already been developed) and so this data is a sign that cloud gaming is really where the console developers see growth.
Branding
Due to novelty requirements at the time of filing, patents are usually filed at the first opportunity. Conversely, trade mark filings can be much more strategic.
Each of the Big Five use a house brand – Google, Microsoft, Nvidia, Sony, and Tencent. They then use sub-brands for their cloud gaming offerings - Google Stadia, Microsoft Project xCloud, Nvidia GeForce Now, Sony PlayStation Now, and Tencent Start.
Many countries operate a “first to file” system wherein trade mark rights are only accrued through registration. Trade mark trolls file third party rights in various countries simply to annoy the owner or, more usually, to seek payment. Domain name squatters also seek to register domains that they consider may be of interest to large entities in the hope of huge profit. As such, applying for trade marks and registering appropriate and available domain names in advance of publicly revealing your chosen branding can be important, especially in a global market such as cloud gaming.
All of the Big Five appear to file trade marks for their chosen sub-brand in at least one country, a month or two in advance of announcing the product launch. There is no real need to wait until registration as, once accepted by the relevant Intellectual Property Office, a trade mark is validly registered from the date of filing. In addition, if a trade mark is filed in one territory there is (usually) a six-month priority period during which subsequent applications in other territories may claim the filing date of the first trade mark. There is therefore no immediate rush to file in other territories.
It seems that on occasion, the Big Five have developed their brand before finalising their offering under that brand. For example, Sony applied for Playstation Now in Japan in 2000, but filed a new mark in 2013 to cover streaming services, a month before its cloud gaming service was announced. Nvidia applied for GeForce Now in August 2015 for gaming consoles generally but filed a new application in October 2015 to cover streaming services, just over a year before it announced their cloud gaming service.
Usually, entities file for trade marks in countries of specific interest - or defensively, for example in China, where trade mark trolling is still unfortunately fairly prevalent. Google, on the other hand, applied for its Stadia trade mark in the Kingdom of Tonga first. With a population of around 100,000, the Kingdom of Tonga represents an extremely small market, and so at first glance, Google’s strategy seems misplaced. However, unlike many other countries wherein publication of a trade mark following filing is very quick, in Tonga it can take around 6 months. This means that competitors, squatters, or trolls who are watching are less likely to be made aware of potential launches, plus it limits the risk of plans being leaked to the public.
Domain Names
Unlike trade marks, domain names are either available or not, much like a home address. As such, early registration of appropriate domains is advised to avoid them being snapped up by squatters. In fact, Nvidia registered its geforcenow.com domain in June 2015, before it filed its first trade mark for the brand.
Since 2012, thousands of new Top-Level Domain names (TLDs) have become available, including non-proprietary terms like .tech, .games, .play, and .cloud. Many entities use TLDs to direct (or redirect) their customers to specific content, for example, amazon.games. Other entities have used the controversial .sucks TLD to their advantage, directing consumers to their complaints procedures.
Companies are also able to apply for their house brand or sub-brand to be a TLD and big names have done so, including .sony, .playstation, .microsoft, and .xbox, though the process is not yet complete.
Perhaps a less-likely star of domain name strategy is Guernsey, one of the Channel Islands. Guernsey’s country code TLD is .gg, which in the gaming world is a popular abbreviation for ‘good game’. For example, Vortex.gg (cloud gaming provider), Discord.gg (VoIP application frequently used with multiplayer gaming) and champion.gg (League of Legends player stats) all use domains with this country code.
Summary
There is much to be learnt from the forward-thinking strategies employed by gaming companies. They take a holistic approach to filing and registration which means that they can maximise their scope of protection and avoid conflicts. They don’t underestimate the importance of early-identification of registrable rights which is especially crucial for tech-dependent businesses, and they consider territorial scope from the outset.
Brabners is able to assist you with all of your intellectual property requirements, from clearance and registration to strategy and management. We can either provide ad-hoc advice or work with you to develop an effective IP policy tailored to your business, please contact Hayley Morgan, for assistance.
