Virtual Trademark Trends 2005-2009: Virtual Goods, Currency and Worlds
A few years ago, virtual worlds such as Linden Labs' Second Life garnered a lot of media attention and attracted many new users chasing the next big thing. Meanwhile, the creation, sale and use of virtual goods and currency grew strong within the once niche market of massive multiplayer online (MMO) gaming.
Now, virtual goods and currencies reach beyond the MMO gaming world and have significant impact on the business models and development of social games, social networks, and community sites. With various estimates claiming that the virtual goods market will grow from $1 billion in 2009 to $1.6 billion in 2010, we thought it useful to conduct a study of how companies playing within the virtual space protect and leverage their brands. Our findings thus far have been interesting and shed a lot of light on where the industry is going.
The study is ongoing, but to whet your appetite before we publish our report, we include the chart above. This chart shows the number of trademarks filed per year between 2005 and 2009 that expressly cover virtual goods, virtual currency (or virtual money), and virtual worlds.
Here are some of our early conclusions from the study:
1. Those with trademarks covering core virtual brand aspects (i.e. the signs, icons or symbols that consumers know you for) show higher than average ARPU.
2. In markets such as the US, where consumers tend to be more willing to pay for virtual goods, trademark protection appears to make a more significant impact than some other markets where consumers may not be willing to pay as much.
3. With many new entrants and more venture financing entering the social media and virtual goods markets, competition for "share of voice" and consumer attention will only get tougher. Companies with a trademark strategy that incorporates certain "best practices" that we identify in the study are best positioned to distinguish from their competition and profit from their brands in the future.
Please contact us for more details and information regarding the Inside Trademarks™ Virtual Goods Report.
Online Game Suit Against Facebook and the Creator of Chain Rxn
Is Chain Rxn Game on Facebook A Clone?
Daniel Miller, the video game designer behind a popular online casual game, Boomshine, recently filed a lawsuit against Facebook and Yao Wei Yeo, of Zwiggler's Apps, the creator of the Chain Rxn game. Miller alleges that the Chain Rxn game, which is available on Facebook, is an unauthorized flash game clone of his original Boomshine game.
Although Miller first filed suit in Georgia in October 2009 claiming both trademark and copyright infringement, he just filed an amended complaint alleging only copyright infringement on Wednesday, March 17 in the U.S. District Court for the Northern District of California.
Miller created the flash-based Boomshine game in early 2007 and then published it on the Internet on March 9, 2007. Since then the game has been played over 70 million times online. He also secured a copyright registration for his game on May 5, 2009.
Chain Rxn first appeared on Facebook in April 2009. Not long after its debut on the popular social network, Miller noticed Chain Rxn and took issue with the unauthorized cloning of Boomshine on his blog months prior to filing suit.
It appears that Miller's and others' notices to Facebook and the Chain Rxn creator regarding the cloning of Boomshine went unanswered, and eventually Miller filed the current lawsuit (see amended complaint below).
Miller claims that Facebook allowed the cloned game, Chain Rxn, to remain on its website even after being notified of its infringement. Both Boomshine and Chain Rxn are available on iPhones as well.
Cloning of casual and social games is an ever growing problem for developers seeking to monetize their games and intellectual property. Research conducted by Inside Trademarks™ Analytics indicates that intellectual property strategy is a significant factor in determining game developers' business success.
Yesterday, the court in San Francisco, CA held a hearing to consider Facebook's motion to dismiss the suit, however the judge has not yet issued a ruling. Until then, take a look at Boomshine and then Chain Rxn, and make your own comparison.
See our other articles related to online gaming.
Trademarks in Social Gaming – A Key Indicator of Success for Game Developers (Part II)
We recently conducted an Inside Trademarks™ study of the market performance and trademark management activity of certain major social game developers over the past two years (Q4 2007 - Q4 2009).
Here are some highlights of the research:
- The majority of social game developers (approx. 90%) do not seek trademark protection for their games.
- The most successful social game developers (approx. 10%), especially those on Facebook and MySpace, do seek trademark protection for their game titles and logos.
- Social game developers that actively and strategically manage their trademark portfolios tend to have higher user engagement or "stickyness" ratios (i.e. DAU/MAU) than those without trademark protection.
- Zynga's trademark filing activity in 2009 nearly eclipses the rest of the top social game developers:
- Zynga filed 26 trademarks alone in Q4 2009
- This was more than all of the other major players' trademark filings combined
- Sheer number of trademark filings alone, however, is not directly correlative to a company's success in the social gaming market.
- A combination of a number of factors, including but not limited to brand and market strategy, risk tolerance, timing, trademark filing and enforcement activity can be combined to provide a better indicator of success in the market.
For more details on this Inside Trademarks™ research, or to order our social gaming report, please contact us.
Click here to see Part I of this series.
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Trademarks in Social Gaming – A Key Indicator of Success for Game Developers (Part I)
Trademark Share in Social Gaming (Feb 27, 2010)
While you are probably familiar with the term "market share" when applied to a company's share of revenue or units sold in a particular market, how often have you heard the term "trademark share"? "Trademark share" is a term we use to refer to a company's share of registered and unregistered trademarks in a particular industry or market segment. It is a key metric and one of many useful tools, when appropriately used, to understand how well positioned a company is to gain some competitive advantage (e.g. more profit or revenue, better ROI on ad campaigns, defend or increase market share) within an industry or market segment.
"Share" pie charts are great visual aids for getting a snapshot of how a market looks at a certain point in time. To illustrate how the fast growing social game market currently looks from a "trademark share" perspective, we provide the chart above for your reference and as a starting point in discussions of our ongoing and extensive research in how the strategic management and use of trademarks impacts gaming industry, and in particular, the social gaming market.
Interested in learning more? Click here.
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