Attorneys' Primer on Video Game Mods

A year ago, the word “fortnight” was relegated to relative obscurity — an archaic way of saying two weeks. In July 2017, however, all that changed. After software developer Epic Games released the blockbuster video game Fortnite Battle Royale — a multi-platform, free-to-play game in which players participate in a cartoonish fight for survival in a post-apocalyptic world — the word “fortnite” can now be heard everywhere.

Unlike other free games, Fortnite does not include ads; rather, to generate revenue it relies solely on in-game purchases from players to customize their avatar's appearance (called “skins”) with no other qualitative enhancements. Despite its simple premise and novel business model, Fortnite has been an overwhelming success, boasting 45 million players by 2018. USA Today recently reported that in May 2018 alone, Fortnite earned over $318 million, with over $837 million in revenue in three months. According to Forbes, the game earns $1 million a day just on mobile devices.

Fortnite also has an enormous e-sports following. Generally speaking, e-sports involves organized, multiplayer video game competitions, often between professional players. Two months ago, Epic announced it would provide $100 million to fund prize pools for the inaugural Fortnite tournament. But the true legacy of the success of Fortnite might be its impact on the world of user-generated video game modifications — or “mods” and the resultant intellectual property disputes. Depending on which game, mods can vary from minor cosmetic changes to substantive overhauls of preexisting properties. In some cases, mods are authorized by the original game developers; other times they are not.

As far as software developers are concerned, mods are not always a bad thing. Many players purchase games just so they can have access to the modded version. Consider the original Defense of the Ancients (commonly known as “DotA”), which was a “modded” version of Blizzard Entertainment's Warcraft III, an enormously popular game in the early 2000s. DotA had almost nothing to do with the Warcraft III storyline. Instead, it merely recycled some of the characters and landscapes, creating a new game with an entirely new premise. Yet thousands of players purchased Warcraft III just so they could play the DotA mod. That meant success for Blizzard.

The greatest cause for concern, however, arises when a modder creates a standalone game without permission from the developer — and then the new game takes market share away from the original. This is especially critical for games like DotA, where there are numerous, competing iterations and several versions attract significant esports followings. Not only would a developer in this kind of market lose games sales, it would also lose the attendant esports revenue.

Given these market forces, game developers often go to great lengths to protect their intellectual property. In 2013, for instance, Valve Corp. released a standalone version of DotA. After Valve released its DotA, other developers released similar games. Blizzard and Valve — which had long since settled their own copyright issues over DotA — then turned around and sued some of these copycat competitors. That litigation is still pending today.

With the advent of games like Fortnite, perhaps concern over unauthorized mods is a thing of the past. Epic does not allow any independent modding in Fortnite. And Fortnite also offers in-game upgrades for purchase, thereby curbing some of the demand for independent mods.

Historically, gamers prefer modded games over their original counterparts; indeed, the collective creativity of millions of gamers may trump that of a single developer. Take Counterstrike and DotA, for example, both of which are mods that are significantly more popular than their unmodded precursors.

Epic Games may have found a way to reverse this trend: By selling players what they would otherwise create themselves, Epic has effectively monetized modding. But by prohibiting independent mods, it may have also opened the door to a mod-friendly competitor.

Epic might consider selling independent game studio mods or player-made mods. But if Epic went that route, who would own the intellectual property rights to a player-made mod? And would modders be paid? After all, a desirable mod could be quite valuable to Epic, both as a sellable item, and a demand driver for Fortnite. These issues may be on the horizon. They might also be addressed in the next version of the gamer end-user license agreement.

The astounding success of Fortnite represents a revolution in the world of video games and the software industry at large. Whether this new paradigm will transform the battlegrounds from which intellectual property disputes are fought over player-driven mods has yet to be seen. For the players, however, until these issues are fully fleshed out their only option is to game on.

***** Jeffrey N. Rosenthal is a partner in Blank Rome's Philadelphia office. He concentrates his complex corporate litigation practice on consumer and privacy class action defense, and regularly publishes and presents on class action trends, attorney ethics and social media law. He can be reached at [email protected]. Ethan M. Simon is an associate in the firm's Philadelphia and Princeton, NJ, offices. He handles a variety of commercial litigation matters and focuses on appellate advocacy. He can be reached at [email protected]