Video Game Industry: Growth Brings Brand Protection Challenges at Virtually Every Level

Portfolio Marketing Manager

How do you know when something has hit mainstream? One clue is when major corporations start shelling out billions of dollars to get in on the action...

Take last year when Amazon paid nearly a billion dollars for Twitch – a site that allows users to watch live streaming video games. How about when Microsoft paid $2.5 billion for Mojang – the creator of Minecraft? Or who can forget Facebook’s unexpected announcement they were acquiring a small designer of Virtual Reality headsets, Oculus VR, for $2 billion dollars?

These are signs that the video game industry has grown up.

Want more proof? Okay, how about the fact that YouTube’s top 100 video game channels generated nearly 6 billion views last month, equivalent to 80% of the world’s population (if everyone on earth viewed one video).

Last year, over 27 million people watched the League of Legends World Championship via live stream and ESPN3, more than Game 7 of World Series which had a ‘trivial’ 23.5 million viewers. By the way, this isn’t just people sitting at home – the League of Legends Championship featured an entire stadium of fans watching game play in real time in Seoul, Korea.

If you think video games are for kids you are mistaken. The average video gamer is 35 years old with 44%, nearly half of the segment female.

Times have certainly changed.

With this growth in the video game industry, there are inevitably going to be brand protection challenges.

When most people think about video games or other digital media such as movies, they immediately think of pirated content, which continues to plague the industry.

That said, the trend toward online subscription services where gamers are immersed in an online world for a monthly fee makes it much harder for pirates to insert themselves into the transaction.  Instead, fraudsters need to find another way to monetize the channel, which is why they have turned toward phishing and other forms of fraud.

Phishing for online game account credentials is a popular way for criminals to hack into accounts and strip them of virtual goods. Gaming accounts are often already connected to the payment information of players, and because of this video game companies have implemented a number of security protocols normally reserved for financial institutions such as 2-factor authentication, but the problem persists.

The sale of virtual goods is a type of abuse that is unique to the video game industry. Rare or expensive items such as special characters or weapons, or even large amounts of “virtual gold” can take months to acquire, yet they are bought and sold online for a price. Entire accounts can be worth thousands of real-world dollars.  Often these goods are stolen from legitimate accounts through phishing attacks or are “harvested” by gold farmers in China. Estimates have valued the online gold harvesting industry from $200 million to $1 billion per year.

Moving from virtual goods to physical goods, counterfeit or otherwise infringing items can be pervasive for some brands.  Lost licensing revenue and damaged brand equity can result with both video game and movie merchandise sold on popular global marketplaces. Pick any popular video game character or icon and you are more than likely to find apparel, posters or other paraphernalia available online. Brands are somewhat restricted in the steps they can take here and must walk a careful line between upsetting a loyal fan who is creating pop art and combating a merchant creating and selling unlicensed or counterfeit product. It becomes a delicate balancing act between protecting the interests of licensees and the integrity of the brand, while avoiding alienating loyal customers.

As you can see, not only has the video game industry evolved, but it has acquired real world problems that need to be addressed through a comprehensive brand protection program. To be effective brand owners need advanced detection, monitoring and enforcement technologies paired with a dedicated team of experts who understand the unique challenges facing their industry. With such a program in place, brand owners can spend less time battling threats and more time producing the products and experiences enjoyed by so many.

 

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Alison Simpson
With more than 13 years’ experience in the domain industry, Alison has managed all aspects of Corporate Domain Managem... More