Industry Rule #4,080: Success Brings Lawsuits

by Darius Kazemi on February 9, 2007

in business,law,publishers

Some more crazy legal action is happening between RedOctane/Activision and TAC over Guitar Hero.

Now, while the reports say that the lawsuit is being filed in part against three ex-developers of Guitar Hero II, these devs did not work for Harmonix, but rather, for RedOctane. You can see it at the Moby Games entry.

Some of you industry n00bs out there might be wondering, “But, don’t all the developers work at Harmonix?” No–for pretty much every game there are people who worked on the game for the publishers who are given development credit. Except instead of titles like programmer or lead designer or associate producer, they have titles like “brand manager” or “licensing associate” or “logistics specialist.”

Anyway, here’s a business rule for you that I just made up: as the success of your product increases exponentially, your probability of being sued increases linearly. (Note how coy I am being about the values of coefficients for this shoddily constructed relationship.)


Aprotim February 9, 2007 at 8:22 pm

So probability of being sued grows as the log of success? That’s a pretty winning proposition, really…

Darius Kazemi February 9, 2007 at 8:30 pm

That would only make sense if a 200% chance of being sued were any worse than a 100% chance of being sued. Since probability maxes out a 1, it entirely depends on your coefficients, and my statement is meaningless except for the “for poorly defined values of ‘pretty damn’, you have to be pretty damn successful to engender a lawsuit” part.

Norm February 10, 2007 at 12:39 am

I suppose we can assume that the coefficients are modified by the content of your game. Particularly, music-themed games like Guitar Hero must lend themselves to significantly higher lawsuit rates given the broader range of people involved in their success.

After all, you not only have to worry about publishers but potentially musicians and music labels as well! Of course, the latter we need not worry about because everyone knows the music industry has no interest in suing their customers.

Bradley Momberger February 10, 2007 at 7:14 pm

Maybe you could correlate the expected value of losses due to lawsuit (projected value of settlement multiplied by probability of having to pay it out) with the success of the project. Is it still linear or does the cost of success increase at a faster pace?

From a financial perspective it may be a more important figure for budgetary purposes.

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