Sacrificing IP
Wed Aug 17, 2011 · 3 min

There was a bit of a stramash last week regarding who gets to own the Intellectual Property (registration required) rights to games when someone other than the creator is paying for it. Good way to get publicity for a new publisher, some might say.

As you might expect, there was a mix of outrage, agreement, indifference and factual error in the comments that followed the article. Given that the most common question I'm asked in my role at the Cultural Enterprise Office is "Where can I get money?", there were a surprising number of people prepared to turn down the chance to get their product made.

There's a truism thrown around that game creators must maintain control over their IP at all costs. It's certainly true that the only way you can build a sustainable games company is to retain as many rights to as many things as possible, but you also need a plan that actively builds that value. Simply making a game and releasing it will technically provide you with some IP, but if no one knows it exists is it actually valuable?

Sometimes, it's worth sacrificing IP to reach your ultimate destination. Pixar never owned the IP in Toy Story. It was all transferred to Disney in the funding deal for the film. Pixar did retain several royalty streams as part of the deal (including merchandise, which for some reason no one at Disney thought would be a big deal in a movie about toys), but Disney had full control over when or if a sequel would happen, for example. The clue that there was a masterplan at work is the clause that stated Pixar's logo would be given equal prominence to the Disney logo in all promotional materials.

When Pixar filed to go public (their IPO date was the week after Toy Story was due to open), they explicitly stated they wanted to build the next big consumer facing movie brand of note. A brand that acted as a stamp of quality and expectation in the same way as Disney, for example (the only other example). I'd say they certainly managed to achieve that, given that more than five years after Disney acquired them, the name "Pixar" lives on above the film name.

Not owning the IP to Toy Story didn't hold Pixar back, but they had a clear understanding of why it didn't matter quite so much at that point. So, by all means negotiate to keep your IP, but make sure you have a clear understanding of what you're negotiating for.

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