How Video Games Survive on Streaming Platforms
In a world where technology is constantly evolving and becoming digital at a rapid pace, copyright owners are in increased jeopardy of infringement issues. This is increasingly prevalent in the video game sphere, where entire online economies exist solely around watching other personalities play video games live on air.
The video game industry is massive, projecting nearly $130 billion in revenue for 2020.[1] The growth and development of the Internet has bolstered video game prominence on streaming platforms, as two out of the top five YouTube Channels are gaming related.[2] Additionally, video game streaming has grown by 91.8% year-over-year with billions of hours of content watched across major platforms.[3] For instance, Facebook Gaming surpassed 1 billion hours watched for the first time in 2020, while YouTube Gaming Live has over 1.6 billion hours watched, and Twitch has a resounding 4.7 billion hours watched.[4]
Meanwhile, this enormous growth creates copyright concerns for companies that develop these games. On the one hand, it’s quite clear that most streamers aren’t contracting licensing rights before airing live on Twitch or YouTube. On the other hand, companies essentially receive free advertising when their game is live streamed in front of an audience of thousands of potential customers.[5] This creates a variety of responses. Companies like Microsoft, Riot Games, and Deep Silver, for example, have explicitly authorized monetization for streaming.[6] However, streamers aren’t given full reign over the copyright, as companies like Microsoft also have policies in place to protect their intellectual property, including prohibiting a variety of offensive content from being associated with their product.[7]
In contrast to companies that are lenient on copyright enforcement, Nintendo once took 60% of advertising revenue from streamers that post their gameplay on YouTube.[8] Nintendo also hit YouTubers with copyright claims and restricted livestreams.[9] Thankfully, Nintendo ended this regime around 2013 and has joined other top companies in the way it regards livestreaming and copyright, which has set a good precedent going forward.[10] While companies take a varying approach to copyright enforcement, it’s important to note that Twitch’s website itself claims that “You are responsible for ensuring that you have the rights to live stream or store copyrighted material on Twitch.”[11]
In terms of the copyright law at play, original works of authorship, such as songs and video games, are protected from unauthorized reproduction and use.[12] These copyrights typically span the author’s lifetime plus 70 years, so they retain heavy protection.[13] While copyright usually protects several categories of works, such as architectural works, musical compositions and graphical works, video games are covered on a “distributive classification” whereby each creative element is protected separately.[14] Moreover, live streaming of video games is considered a violation of the exclusive right of public performance, which allows copyright holders to shut down streams.[15] These protections create a legal wall of hurdles for live streamers in any scenario involving litigation, and live streamers often don’t have the time or money to hire an attorney and endure possibly years of legal battles.
Finally, while copyright holders have substantial tools in their arsenal to take down live streamers, there is a method to fight back known as “fair use.” Fair use allows for infringement of a copyrighted work for purposes of “criticism, comment, news reporting, teaching, scholarship or research.”[16] Courts generally apply a four-factor test to determine if fair use applies, those factors are: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion of the work as a whole; (4) the effect on the potential market value of the work.[17] Unfortunately, caselaw on this matter is very limited, which presents even more issues for streamers pushing back against copyright strikes.[18].
In conclusion, as of early 2021 the ecosystem of live streaming video games is very much at the mercy of the copyright holders. Since live streams directly infringe on the copyright holder’s right of public performance, and since those live streams aren’t fully protected by fair use case law, the discretion of copyright holders is the dam that keeps the water from bursting. While there are more extrinsic protections, such as community support for live streamers and the advertising benefits for copyright holders, live streaming of video games is a thriving industry that also is hanging on by a thread.
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