The Positive “Impact” of Fan-Friendly Copyright Policies on Fan-Made Merchandise: A Case Study of Genshin Impact (Oct 2022)
The Positive “Impact” of Fan-Friendly Copyright Policies on Fan-Made Merchandise: A Case Study of Genshin Impact
By: Aliza J. Lee
The video game industry has grown immensely over the past few decades. From creating a more global presence in society with esports, to video games being picked up by production companies and adapted into movies, tv shows, and animations. All of these successful endeavors were made possible because of the support of fans. The backbone of the video game community and industry are enthusiastic fans that are willing to go to great lengths to support what they love. In large part, the reason fans buttress certain videogames is that they have deep connections to the characters and stories that are embedded within. Many, if not most, successful iconic video games share this commonality. When a gamer thinks of Halo, their next thought is of Master Chief; Mass Effect evokes Commander Shepard, The Witcher – Geralt of Rivia, Legend of Zelda – Link, and the list goes on. Thus, as a result of zealous fans, any beloved character is going to be the subject of fan-made merchandise and content. However, fans may fail to realize that this concept of fan-made merchandise and content falls under copyright law and their creation may be subject to licensing to be commercially viable.
Legal Framework of Copyright and Infringement for Video Game Characters
Copyright is a type of Intellectual Property (IP) that protects original works of authorship as soon as they are created into a tangible medium of expression. There are many types of works in copyright law, such as paintings, photographs, musical compositions, books, blogs, movies, musicals, computer programs, and more. Video game law is complex and fascinating in that all sorts of artistic works within the game itself can be protected by copyright law. From musical compositions (original soundtracks or “OSTs”) and character designs to video game lore and more, there are many facets to video games that fall under the protection of copyright.
Regarding copyright of characters for video games, the actual visual characters created by the artist(s) are protected by copyright law. Unless the game studio specifically provides permission to use their characters for commercial use or one pays a licensing fee per unit to the game studio, one could be held liable for copyright infringement if they use the character designs to create and sell fan-made merchandise. According to the U.S. Copyright Office, “copyright infringement occurs when a copyrighted work is reproduced, distributed, performed, publicly displayed, or made into a derivative work without the permission of the copyright owner.” The potential consequences of willful copyright infringement can result in criminal penalties or civil judgments. Criminal penalties include imprisonment of up to five years and fines of up to $250,000 per offense. Civil judgments for copyright infringement can include fines ranging from $750 to $30,000 per work infringed. And for “willful” infringement, a court may award up to $150,000 per work infringed.
Thus, rightly so, video game studios are highly concerned with identifying what IP they own and how to protect it. However, just because every video game studio owns their IP does not mean that their policies on restricting the use of their IP to the public are all the same. Depending on the game studio, copyright policies can vary from a wide spectrum of acceptance regarding fan-made merchandise and content.
Genshin Impact’s Merchandising Authorization
This article discusses the positive impact to both the gaming community and the game studios of granting fans the liberty to create and sell fan-made merchandise and content without the fear of legal consequences. A good example of a game studio with fan-friendly copyright policies is Hoyoverse – formerly known as MiHoYo – the studio that created the widely popular video game Genshin Impact.
In November of 2021, MiHoYo, as it was known at the time, released a statement of copyright policy and guidelines regarding merchandising authorization. In short, MiHoYo clarified miscommunications about the guidelines and stated that they would not be charging a copyright fee for “all successfully declared merchandise.” According to Genshin Impact developers, fans are allowed to “create original secondary content from already published content of the Genshin Impact series and [may] produce physical merchandise to give away or sell.” Although more details specify the exact guidelines that fans must follow, MiHoYo affirmed that fans who create Genshin Impact merchandise are allowed to make money from selling their fan-made merchandise.
This decision continues to bring many positive impacts not only to the Genshin Impact community but to Hoyoverse as well. As the environment for creative works continues to diversify, games like Genshin Impact continue to find more fervent fans that are passionate about creating artworks and all sorts of merchandise based on the game. One only needs to search “Genshin Impact” on Etsy or Redbubble to see the extent of the game’s popularity among fan-creators. Fan-friendly copyright policies on fan-made merchandise have allowed fans to openly express their passion for the video game and even start small businesses on online marketplaces. Like-minded fans go out of their way to search for fan-made merchandise, which in turn creates more incentive for fan creators to make even higher-quality fan-made products. This cycle continues and, as a result, brings about a more creative and satisfied fan base.
Having an ardent and dedicated fan base is arguably the ultimate positive impact and objective for a game studio. In this case, by having a fan base that goes out of its way to create artistic works based on Genshin Impact, Hoyoverse creates a larger presence on social media that cannot be replicated without the genuine enthusiasm of fans. In August of 2022, Genshin Impact was crowned the most discussed game on Twitter in 2022. This increased presence on social media (due to a diverse and devoted fan base) translates into prime marketing. Who better to persuade others to play the game than a friend, family member, or partner who clearly expresses genuine interest and eagerness for it? This word-of-mouth marketing yields an increase of players every month/year. When the game launched back in September 2020, there were about 16 million players monthly. Within two years, this number had more than tripled. By September 2022, there were over 63 million players playing Genshin Impact. According to the stats on activeplayer.io, Genshin Impact has almost never witnessed a decrease in its monthly player count. This increase in global player popularity has had a direct impact on the revenue brought in by Genshin Impact. According to Forbes, Genshin Impact has made $3 billion in revenue on mobile sales alone since its release, averaging about $1 billion every six months. And these sales are for only one platform that Genshin Impact is listed on, as it is also available for purchase on PS4, PS5, and PC.
It comes as no surprise that Genshin Impact is financially successful and has a loyal fan base. The dedication and care the game developers have for Genshin Impact can be clearly seen when playing the game. From the beautiful anime-style, world-building capabilities, dynamic characters and NPCs (non-playable characters), to the intricate and complex storyline, and breathtaking musical compositions, the game brings a truly fantastic and engaging experience. With so much inspiration for fans to base their fan-made merchandise on, there is no limit as to what sorts of creative works can be brought into tangible existence. Hoyoverse’s decision to have a more fan-friendly copyright policy when applied to fan-made merchandise and content has helped fast-track Genshin Impact into a stable, vast, and diverse fan base. As a result, its fan base has undoubtedly helped skyrocket the game into its popularity even faster than imaginable, while still enjoying their freedom for artistic expression.
Genshin Impact is merely one example that showcases the positive effects of having more fan-friendly copyright policies than is traditional for video game studios. Such policies give a glimpse into the possibilities for the future of copyright law. While a critical look into the consequences of implementing more open copyright policies in video games is necessary, having thoughtful copyright policies that grant the right to use the characters for free but also provide use restrictions, is better for the future of video games. This is because such copyright policies bestow game studios with free promotion but also legal remedies in case of events in which characters are used inappropriately. Overall, such thoughtful copyright policies provide a net gain for both the fans and the game studios by protecting and promoting the IP of the video game.
 Lam Rui Rong, Game On! Intellectual Property Rights in the Billion Dollar Video Games Industry, Skrine (Feb. 22, 2022), https://www.skrine.com/insights/alerts/february-2022/game-on-intellectual-property-rights-in-the-billi.
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