Lawlines Volume 9 Issue 4 - eOASIS

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LawLinesVol 9 . <strong>Issue</strong> 4 • December 2007Around Rajah & TannRound Up – 2007 InPerspectiveFeature ArticlesTo Withhold Or Not ToWithhold – That Is TheQuestionAll Abuzz About GamesCorporate SocialResponsibility UnderThe New IndonesianCompany LawCase BitesLegislation Bitesoften whimsical. Consequently, games publishersbalance the risk of exploiting brand new games(with the resultant risk of failure) with their library ofsuccessful game franchises.Key Participants In The GamesIndustryThe key participants in the games industry includethe following groups:• Game developers – These are companies thatconceptualise and create new computer games,and are often small independent studios.• Game publishers – These are companies thatpromote, market and publish computer gamesthat have been developed by game developers.Game publishers are typically large companies.Some publishers are themselves also gamedevelopers.• Retailers and distributors.• Console owners – These companies develop andmanufacture the game consoles on which gamesare played, eg, Microsoft and Sony.DistributionThe main markets for computer games are NorthAmerica, Europe, Japan and Korea. In Asia, PCgames played online as well as mobile games areproving to be popular. Each territory is characterisedby different tastes and culture.What this means is that a computer game may notnecessarily have universal appeal. A game that isprimarily developed for the North American marketmay succeed in Europe but may not appeal toconsumers in Asia. The reverse may apply as well.Hence, game publishers may need to customisethe game in question in order to suit the tastes ofconsumers in various territories.Sales channels also vary from territory to territory.In some territories, the popular mode of distributionmay be through CD or DVD retail channels. Inothers, it may be via the Internet. Hence, localknowledge is extremely important. This explainswhy major game publishers often have subsidiariesestablished in the foreign distribution market. Forterritories in which the game publisher may not havepage 20 of 44 pages | print | comments | close
LawLinesVol 9 . <strong>Issue</strong> 4 • December 2007Around Rajah & TannRound Up – 2007 InPerspectiveFeature ArticlesTo Withhold Or Not ToWithhold – That Is TheQuestionAll Abuzz About GamesCorporate SocialResponsibility UnderThe New IndonesianCompany LawCase BitesLegislation Bitesa locally incorporated subsidiary, it may appointa local independent game publisher to sell thecomputer game in that territory in question, tappingon the local knowledge and connections of thatlocal independent game publisher.The key players in the distribution channel includethe following:• The Publisher – The publisher manufacturesindividual boxed game units for sale to retailersand manages the stock in the retail channel. Itnegotiates sale or returns with retailers as well asmarkets games to end-users and retailers.• The Distributor – The distributor ships gameunits to the retail outlets. It may also undertakemarketing of the game to retailers.• The Retailer – the retailer sells game units to endusers in its shops.Lines have blurred in the Internet age. Gamesare now being sold directly by publishers anddistributors via downloads through the Internet.Traditional retail at shops to end users neverthelessremains the most common form of distribution. Assuch, retailers carry a signifi cant level of clout innegotiating their contracts with publishers.In agreements with retailers, game units are soldtypically either on a ‘fi rm sale’ basis or a ‘sale orreturn’ basis. For the former, units of games sold toa retailer cannot be returned unless it is defective.For the latter, the retailer pays the publisher foreach unit it acquires from the publisher. Howeverfor units that the retailer is unable to sell to endusers, the publisher would need to repurchasethem from the retailer.Finding The Goose That Lays TheGolden EggThe success of a game depends on a myriadof factors – its design and game play, its genre,the reputation of the publisher, marketing andpromotional activities, consumer tastes, localknowledge and the level of piracy in the territoryin question. Probably one of the more importantfactors would be the clout of the game publisherwho has been appointed to market and publishthe game.An established game publisher would be wellpoised to leverage on its past experience andextensive distribution network and connectionspage 21 of 44 pages | print | comments | close
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