News from the lovely world of the Games Industry.

[Syt]

https://www.pcgamer.com/games/notorious-uk-rights-group-launches-legal-action-against-valve-for-distributing-music-in-games-on-steam-without-a-license/

Notorious UK rights group launches legal action against Valve for distributing music in games on Steam without a license

The Performing Right Society says a license to use music in a game does not constitute the right to distribute that music, via the game, to the public.

Valve is facing a new legal headache in the UK, and this one is definitely not like the others. The Performing Right Society, a rights management organization that collects royalties on behalf of musicians when their work is played publicly, has launched legal action against Valve over its use of PRS members' music on Steam without permission.

The PRS says that many of the games available on Steam feature music made by its members, and that by making those musical works available to the public via streaming or download, "Valve is communicating these works to the public without a licence."

"Our members create music that enhances experiences and PRS exists to protect the value of their work with integrity, transparency, and fairness," PRS for Music chief commercial officer Dan Gopal said.

"Legal proceedings are not a step we take lightly, but when a business's actions undermine those principles, we have a duty to act. Great videogames rely on great soundtracks, and the songwriters and creators behind them deserve to have their contribution recognised and fairly valued."

I initially assumed that this lawsuit was specifically about game soundtracks on Steam, which struck me as odd because surely no major game publisher would release an official soundtrack without the proper licenses in place. But a PRS spokesperson clarified that the action is related to any music, in games as well as soundtracks, that Valve hasn't separately licensed for distribution.

So, for instance, Rockstar will have obtained licenses to use PRS members' music in Grand Theft Auto games, but the PRS says those licenses do not allow for the separate act of making the game, which contains the music, available online.

"Copyright law gives rights holders control over certain acts, including copying, public performance, broadcast, and making available online," the spokesperson explained to me. "When someone wishes to use a copyright work like music in this way, permission from the rights holders is required, which is normally done via a licence. PRS represents songwriters, composers and music publishers, and licenses these uses of their musical works.

"In this case the relevant act which has not been authorised is the making available of the music online. The composer or publisher of the music may have cleared the rights for the work to be used by the developer in the relevant game, but there is a separate act carried out by the platform operator when the game (or its soundtrack) is made available to consumers for streaming or download .

"Valve operates the Steam store and is responsible for the downloads and streaming delivered to customers via its platform. Valve therefore plays an essential role in giving the public access to that music."

It all seems very odd to me, and a real reach too, although I readily acknowledge that I'm not familiar with the intricacies of UK copyright law and licensing requirements. The PRS does have a history of aggressive behavior with this sort of thing, though. In 2007, for instance, it took an auto repair shop in Scotland to court because its employees were listening to radios at work, which the PRS said constituted public performances of music. In 2009 it went after a woman who played classical music to help soothe her horses; that same year, it told a woman working at a grocery store that she wasn't allowed to sing while she stocked shelves unless she obtained a public performance license. In that case, at least, the backlash was so furious that the group withdrew the demand and apologized.

As for why it's launching this legal action now, the PRS said it's sought the required licenses "for many years without appropriate engagement from Valve." It also noted that Valve is facing a roughly $900 million lawsuit in the UK for overcharging gamers and "abusing a dominant market position," so maybe it just decided to strike while the suing Valve iron is hot.

What is the point of licensing the music if you can't sell the product afterwards?

Also, shouldn't they go after Netflix & Co, too?

[Syt]

https://www.pcgamer.com/gaming-industry/epic-games-lays-off-more-than-1-000-employees-were-spending-significantly-more-than-were-making-ceo-tim-sweeney-says/

Epic Games lays off more than 1,000 employees: 'We're spending significantly more than we're making,' CEO Tim Sweeney says

Epic Games has laid off more than 1,000 employees. CEO Tim Sweeney says the company is still "spending significantly more" than it's making as a result of an ongoing slump in Fortnite engagement that began in 2025, which has necessitated "major cuts to keep the company funded."

Sweeney said some of the problems facing Epic are endemic to the game industry, such as "current consoles selling less than last generation's," while others are unique to Epic. "Despite Fortnite remaining one of the most successful games in the world, we've had challenges delivering consistent Fortnite magic with every season," Sweeney wrote about the layoffs.

Sweeney also referenced Epic's years-long legal disputes with Apple and Google, an effort that ultimate resulted in victory for Epic but only after a drawn-out and surely very expensive process: "We're only in the early stages of returning to mobile and optimizing Fortnite for the world's billions of smartphones; and in being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers."

Sweeney also stated the layoffs "aren't related to AI."

The plan going forward is to "build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events," Sweeney continued, and "build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events." He also teased a launch of "the next generation of Epic" nearer the end of the year, and your guess is as good as ours as to what that will entail.

"Market conditions today are the most extreme we've seen" since the early days of Epic, which was founded in 1991 and officially became Epic Megagames the following year, Sweeney wrote. But there's also "massive opportunity for the companies that come out as winners on the other side," he added, which is what Epic is now focused on.

The layoffs come just over two years after Epic laid off more than 800 employees, cuts that occurred in September 2023 for essentially the same reason: "We've been spending way more money than we earn," Sweeney said at the time. He said in October 2024 that Epic was "financially sound" after spending the previous year "rebuilding and really executing solidly on all fronts." It also follows just two weeks after Epic raised the price of Fortnite V-Bucks, saying "the cost of running Fortnite has gone up a lot."

Epic told PC Gamer that following the layoffs it will have just over 4,000 employees remaining.

[Sophie Scholl]

"Sweeney also stated the layoffs 'aren't related to AI.'"

 
*insert "Sure, Jan." meme here.*

Although, to be fair, I think the c-level suite crew's salaries and foolish missteps were also a factor that adds to the disaster that was ai investing.

[The Minsky Moment]

Epic's business consists of:

1. Fortnite
2. Unreal Engine
3. Epic Game Store
4. Random flotsam and jetsam

Fortnite and Unreal Engine royalties are cash cows. There is no way their costs are higher than revenues for those lines.  It's probably true that Fortnite has peaked and maybe they don't need or want the staffing level they currently have to over-saturate the market with pointless variants like Fortnite: Chartered Accountancy and Fortnite: Killer Erkel.  But that's about maintaining profit margins not avoiding losses.

The Game Store OTOH is a money pit. But I doubt staffing is a major contributor to those losses.  Steam runs their more substantial store on a shoestring.  EGS is losing money because no one buys games there but they are paying the cost on the free game giveaway programs.

[Baron von Schtinkenbutt]

I think Epic's problem is they over-hired in an effort to diversify their revenue stream, and keep the Fortnite momentum going.  It hasn't panned out, though, so now they have to cut the excess to survive.  They should probably just accept that they are now a game engine company who also maintains a popular game on the side.  They could do that with even less head count than they'll have after this layoff.

[garbon]

Yeah why do they still give away so many games?

[Syt]

Epic said a while ago that them giving away games for free was good for the devs because it usually would trigger a sales bump on Steam for them.

[Sheilbh]

What is the point of licensing the music if you can't sell the product afterwards?

Also, shouldn't they go after Netflix & Co, too?

I read a couple of other articles about this. Because I found the tone of that one a bit strident (and odd). It's a copyright collective (similar for writers and actors and directors and newspapers), there are absolutely big music publishers in the PRS, but it's also basically how composers and song-writers get the equivalent of residuals. Instead of people who have rights to small income streams from IP they've licensed having to monitor that and chase down big companies themselves, they form a collective to do it on behalf of them all. But it's not unusual for IP licenses to be very specific - certainly the way it works for copyright in fiction and translations.

They have absolutely overreached in the past and can be a bit aggressive - but I kind of sympathise with them as whether it's the PRS or the equivalent in other industries they are really important in collecting income that creative workers are entitled to.

In the last decade or so PRS have had a strategy of doing deals with the big streamers - so they have an agreement with BBC, Sky, Netflix, Apple TV etc (there's been similar by other copyright collectives).

The way it works for companies like Netflix is basically that they do a deal wth PRS through the license for distribution online (in this territory) is agreed, and basically those streamers pay a fee (I'd guess almost a royalty element to some extent) which PRS then distributes to their members - I'm sure there'll be some complicated calculations. So the reason that they're not going after Netflix is that Netflix is paying them. Within video games PRS say they have deals in place with Microsoft and Sony who I assume are major distributors on their platforms.

My read from that PRS statement that there's been efforts for "many years" and Valve would not "appropriately engage" is that they've been trying to negotiate a deal with Valve for a while and they've either not engaged or can't get there so they're litigating (probably with an eye to get them back at the negotiating table).

[Jacob]

Thanks for the additional context Sheilbh

[Syt]

That sounds very similar to GEMA in Germany (who also have a history of questionable overreach at times).

[Sheilbh]

Yeah I think it's the equivalent - there is definite overreach but I think that's less going after Valve than, say, threatening to sue a school putting on a play without the right license (and in fairness not heard many cases recently - I think they maybe realised the PR damage wasn't worth it - or have a different strategy).

[Sophie Scholl]

That sounds very similar to GEMA in Germany (who also have a history of questionable overreach at times).

...or ASCAP in the US. If it is an issue, I wonder why they don't go after other game selling options like Gamestop or Walmart or GOG or make it a combined suit against all of them. That part makes me think it is solely a cash grab/shakedown of Steam.

[Syt]

Over here, GEMA was going after e.g. when a private bowling club played music at their get togethers, and at work we would get form letters asking us to confirm whether or not the music that played when we put you on hold in our phone system was from one of the artists they represent (and they were notorious for doing spot checks). And I recall an article from years ago (might have changed?) that their fee system was a tad convoluted, requiring artists performing their own songs on stage to pay GEMA license fees for each concert to be reimbursed back later.

[Sheilbh]

...or ASCAP in the US. If it is an issue, I wonder why they don't go after other game selling options like Gamestop or Walmart or GOG or make it a combined suit against all of them. That part makes me think it is solely a cash grab/shakedown of Steam.

Oh to be clear it absolutely is a shakedown/cashgrab That's how the business works - it's also how regulators (like the competition regulator who just ruled against Valve) often act. You start from the top and work down.

From that article the license they're saying Valve need to be paying for is basically streaming content (so the video game equivalent of Netflix or streamers - or in the same way in publishing there's different licenses and royalties for print or electronic distribution). I'm ignorant on this but I'm not sure there are many alternatives in the UK (and these groups are territory specific) - I don't know if GameStop or Walmart do streaming, but they don't exist here. Less sure on GOG - but the other point is that those companies may, like Netflix and Sony and Microsoft, have done a deal. I think there's an assumption that Valve is just doing what everyone else does - and looking at the (non-exhaustive) list of companies paying for licenses I'm not sure that's true (I'd also add I think there may be a point from a legal strategy perspective on rights enforcement - you probably wouldn't want to do all targets at once for risk of decisions going against you impacting your cases against all companies - go splashy on the most egregious, hope for a good result/precedent you can then leverage but if it doesn't go your way be able to finesse/try a different line of attack next time.)