FILED: NEW YORK COUNTY CLERK 05/09/2011

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The Experience sold about 2 million copies in five months, while Dance Central sold 1.8 million copies in the same time frame. 87. Starpower: Beyoncé has major commercial advantages over all of these comparable products. Wii Fit, Just Dance, Dance Central and Michael Jackson: The Experience can each be played on only one of the three major game consoles. Starpower: Beyoncé, on the other hand, would have been playable on all three consoles. And while Wii Fit, Just Dance and Dance Central are not associated with any celebrity, Starpower: Beyoncé had the biggest star in the world as its headline star. Third, in contrast with the expensive, bulky control devices that purchasers must buy in order to play Guitar Hero and Rock Band, purchasers of Starpower: Beyoncé would not have to buy any dedicated control device and could buy the game for approximately half of what Guitar Hero cost. Also, none of the artists associated with Guitar Hero (e.g., the rock bands Van Halen and Aerosmith) are currently enjoying anything close to Beyoncé’s level of global commercial success. 88. Starpower: Beyoncé had at least two other key commercial advantages over comparable games. First, it was one of the first music or fitness games built to be played on the Kinect. This was an enormous benefit given how wildly popular Kinect has turned out to be. Kinect has been far more successful than Gate Five, Ms. Carter, Alcon, or probably even Microsoft ever thought it could possibly be. On March 9, <strong>2011</strong>, Microsoft announced that it had sold 10 million units of the Kinect since its release on November 4, 2010; the same day, the Guinness World Records organization announced that the Kinect had become the “Fastest- selling Consumer Electronics Device” in history. Inasmuch as the public has fallen in love with the Kinect and is buying it at a record breaking pace, there is good reason to believe that Starpower: Beyoncé’s sales would have been boosted by its enormous popularity. PC Law # 15232 30
89. Second, Ms. Carter was contractually obligated to personally assist with the development and promotion of the game to an extent that no other celebrity associated with a video game has ever been. Ms. Carter herself commented that her arrangement with Gate Five was “revolutionary” in the video game industry because, rather than simply licensing her name and likeness for Gate Five to use in the game (as is done in most video game deals with celebrities), she became an equity member of Gate Five and would therefore be personally “vest[ed] in the development of the . . . company.” She committed under the Agreement, for example, to participate in facial and body scans to be used by the developers, a motion capture shoot to incorporate her dancing into the game, voice recording sessions, print and video commercials, live personal appearances at several promotional events, and to “comply with whatever reasonable instructions, or suggestions that Gate Five or its agents may give Mrs. Carter in connection with the rendition of services.” Ms. Carter, in other words, specifically bargained for an equity stake in Gate Five, and in order to get it she agreed to personally commit to the development and promotion of the game to an extent that was unprecedented in the industry. Her representatives stressed this fact in meetings with investors and retailers, emphasizing that her equity interest in Gate Five, and consequent “full commitment” to developing and promoting Starpower: Beyoncé, would translate to huge sales. 90. Under these circumstances, an estimate that Starpower: Beyoncé would have sold 15 million copies is a conservative one. Using this number as a modest example (given that the real number would have likely been much higher, as will be demonstrated at trial), Gate Five would have earned in excess of $172 million in profits on sales of the game, in light of the detailed cost-structure chart prepared by Alcon during due diligence. This figure, moreover, does not even include the substantial profits Gate Five would have earned from sales of additional PC Law # 15232 31
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Page 7 and 8: Electronic Arts, MTV, Major League
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Page 11 and 12: with the Kinect, and it was activel
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Page 17 and 18: Mart. Starpower: Beyoncé featured
Page 19 and 20: game sold 7 million units (a conser
Page 21 and 22: 58. Two days later, her lawyer sent
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Page 33 and 34: and agreed to provide certain servi
Page 35: terminated it. 112. The Agreement i

FILED: NEW YORK COUNTY CLERK 05/09/2011

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