David Schulman, partner, Greenberg Traurig (Courtesy photo)
Greenberg Traurig shareholder David Schulman loved gaming as a kid, and he’s turned that into a legal career as video games and their fast-growing offshoot, esports, have become a multibillion-dollar global industry—with Atlanta as an emerging hot spot.
Schulman, who’s been advising video game companies in Atlanta, Los Angeles and New York for more than a decade, has just started a video game and esports practice for Greenberg along with two Dallas shareholders, Steven Walkowiak and P. William Stark, that draws on IP, media rights and a variety of other disciplines from about 20 lawyers around the firm.
“I’ve been quietly representing these companies over the past decade,” Schulman said. As the industry has matured and esports has taken off, it’s become a lot more high profile.
His clients include video game developers Hi-Rez Studios in Alpharetta and Tripwire Interactive in Roswell, which make multiplayer, fantasy-adventure games and L.A. companies Survios and The Void, which develop virtual reality ones.
It’s a unique practice because it combines expertise in tech and entertainment law, Schulman said.
“The core of the business is built around publishing agreements needed to take a game to market, and behind that are a lot of software development agreements, including media licensing,” he said.
That’s especially the case for games based on movies or other sources of “famous IP,” he said, adding that movie producers and studios these days routinely have a “gaming strategy” for video game spinoffs.
Schulman said Greenberg has gained enough of a “critical mass” of clients to formalize a practice team to serve them “in a really efficient way with subject matter experts.”
He handles the publishing and distribution agreements along with other contracts and transactions, for video game and esports clients but draws on the expertise of other lawyers for matters ranging from employment and immigration to regulatory issues.
Greenberg’s Atlanta entertainment and media law team regularly helps out, he said, noting that its co-leader Bobby Rosenbloum does the music licensing for his clients.
Atlanta has developed into a hub for the industry in the last decade. There were only eight video game studios in Atlanta when Hi-Rez launched in 2005. Now there are more than 130, according to Hi-Rez president Stewart Chisam in a recent Atlanta Business Chronicle op-ed.
Georgia’s film, TV and digital entertainment tax credit, which made the state a magnet for film and TV production after taking effect in 2008, has done the same for video game developers since it was expanded to include them, Schulman said. In Georgia now, the industry generates more than $750 million in revenue and employs more than 15,000 people, according to the Georgia Game Developers Association.
Atlanta also has the needed talent, Schulman said, thanks to schools like Georgia Tech and the Savannah College of Art and Design (which has a sizable Atlanta branch) that train gamer engineers and artists.
There is also a supportive network of tech entrepreneur-investors, he said, such as Chris Klaus and Ashish Mistry. Klaus founded Internet Security Systems and then Kaneva, a 3-D virtual world for gamers, and was one of the initial backers of the digital entertainment tax credit. Mistry runs gaming gear company KontrolFreek and is a partner at venture capital firm BLH Venture Partners.
Long Way From Atari
Schulman, 49, grew up playing Atari's "Asteroids" and "Dungeons & Dragons." Then, in the 1990s, he got into the first wave of immersive fantasy role-playing games on the computer, like "Rogue," a D&D-like game where players explore a dungeon and fend off hostile monsters, and "Diablo," which pits players against Diablo, the Lord of Terror.
With the advent of the Web, “massively multiplayer online” games like "World of Warcraft" became enormously popular, allowing players to game together from their own computers.
Video games account for a huge amount of today's entertainment industry, because people love how interactive they are, Schulman said, rather than passively watching a movie.
“There are millions of people around the world who play games every day, ranging from a parent playing one on their phone while waiting to pick up a kid from school to heavy gamers who spend hours a day playing MMOs,” he said.
The next new thing is esports, where competitive video-gaming has become an actual spectator sport. Players have formed college teams and leagues to compete in multiplayer video game tournaments held in real arenas.
The esports industry has exploded in popularity, going from $493 million in revenue in 2015 to a projected $906 million for 2018, according to consultancy Newzoo’s Esports Global Market Report—and with an audience of 360 million viewers.
One of Schulman’s clients, Hi-Rez, held tournaments worth $1.6 million in prizes for its multiplayer games "Smite" and "Paladins" last month at DreamHack Atlanta, a gamer nerdstravaganza held at the Georgia World Congress Center.
As a young tech lawyer, Schulman in 2005 landed Hi-Rez as his first video game client after its launch by Erez Goren and Todd Harris. He knew Goren because in 2000 he became the general counsel for Goren’s enterprise software company, Radiant Systems (later sold to NCR), and then the tech entrepreneur’s next company, BlueCube Software, where he worked until joining Greenberg in late 2005.
Hi-Rez, like many video game companies, offers the games for free and makes money off of sponsors and advertisers, who in turn collect data on participants.
Hi-Rez makes several types of fantasy adventure games, which give a sense of the variety of games out there. In "Realm Royale," set in a mythic medieval era, players compete to be the last one standing, while those that get knocked down turn into chickens.
"Smite" is an MMO fantasy game where teams of players, each controlling a mythological god character, compete against each other in arena combat. (Technically, it’s a MOBA—a “multiplayer online battle arena” game.) "Paladins," on the other hand, is a first-person shooter game where players also compete on teams.
"Smite" and "Paladins" have their own esports leagues, operated by Hi-Rez spinoff Skillshot Media, which launched last spring.
Tripwire’s games are more lurid. "Red Orchestra" is a first-person shooter game set during the Battle of Stalingrad in World War II. "Killing Floor" is set in a post-apocalyptic London where a military cloning experiment has gone horribly wrong, creating gruesome-looking and hostile mutants, which players try to kill.
While Schulman is still a gamer, he said these days he’s moved on from Atari's "Asteroids" to Hi-Rez’s "Smite."
David Schulman, partner, Greenberg Traurig (Courtesy photo)