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Video Games and Business Law: Expanding the Reach of the $150 Billion Industry

Video Games and Business Law:
Expanding the Reach of the $150 Billion Industry

Credits: 1.0 G
Originally presented on May 26, 2021

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In Brown v. Entertainment Merchants Association, 564 U.S. 786 (2011), the U.S. Supreme Court recognized that video games as a medium qualify for full First Amendment protection which means that strict scrutiny applies to content-based regulations of the medium. The Court concluded that—like the format’s predecessor media of books, plays, and movies—video games operate as an artistic format where creators can express ideas to tell stories.

Like the transition from black and white to color films, advances in technology have dramatically changed the medium compared to its early capabilities during the mass market introduction of the format during the 1970’s. The Brown case settled the core First Amendment questions surrounding the medium, but video game technology continues to develop at an impressive pace. The launch of a new generation of video game consoles in November 2020 with the Sony PlayStation 5 and the Microsoft Xbox Series X presents an exciting new chapter in the evolution of the format.

The industry exceeded $150 billion in global sales during 2020, thriving through the COVID-19 pandemic while many segments of the entertainment industry struggled. While it is the case that video games are still a young medium that continues to evolve, the video game industry from a global media sales standpoint has within the past decade surpassed the combined global media sales of the movie and music industry combined. Even the U.S. military has jumped on the bandwagon, with the U.S. Department of Defense recently awarding a contract to Microsoft worth over $20 billion across ten years for HoloLens-based headsets for soldiers—technology adapted from an earlier augmented reality headset designed to use with the video game Minecraft.

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