Types of Intellectual Property in the Gaming Industry
The gaming industry is no longer merely a form of entertainment—it has become one of the largest digital economic sectors in the world. Globally, the gaming industry is projected to generate approximately USD 188.8 billion in 2025, with billions of players worldwide. In fact, the sector is expected to continue growing and may approach USD 300 billion within the next 2–3 years. In Indonesia, the potential is equally significant. The gaming market is estimated to reach around USD 4.28 billion (± IDR 65 trillion) in 2025, with more than 150 million active players. Indonesia has even become the largest gaming market in Southeast Asia, driven largely by the dominance of mobile gaming. However, what is truly interesting is not just the numbers, but where the money actually comes from. Where Does the Gaming Industry’s Revenue Come From? The economic circulation within the gaming industry is driven by various monetization streams, including: In-App Purchase (IAP) In-game purchases such as skins, items, characters, or battle passes have become the primary revenue driver. In Indonesia alone, IAP contributes hundreds of millions of dollars annually. Game Sales (Premium Model) Paid games—both digital and physical—remain a core business model, especially for PC and console platforms. Advertising Free-to-play games often monetize through advertising, which contributes a significant portion of industry revenue. Subscription & Platform Ecosystem Models such as Xbox Game Pass and PlayStation Plus create stable recurring revenue streams. Esports & Streaming Tournaments, sponsorships, and streaming platforms generate their own economic ecosystem. Merchandise & Licensing Game characters evolve into brands that generate revenue through derivative products such as toys, films, apparel, and more. Intellectual Property in the Gaming Industry However, before a game can even exist in the market, its Intellectual Property (IP) protection is indispensable. Behind the complexity of the industry lies a combination of integrated IP rights: Trademark Protects the game name (e.g., Mobile Legends, Genshin Impact), logos, and even character names. Trademark registration serves as both a business identity safeguard and a key marketing asset. Copyright Protects source code, artwork, character design, animation, music and sound effects, as well as dialogue and storyline. In essence, almost all creative elements within a game fall under copyright protection. Patent Used to protect innovative gameplay mechanics and technical systems such as matchmaking algorithms, AI behavior, or unique physics engines. Patent protection for gameplay mechanisms has become common practice—not only to prevent competitors from copying, but also to generate additional revenue through licensing to other developers. Trade Secret Protects internal algorithms (such as drop rates and balancing systems), player data and analytics, as well as monetization strategies. Licensing Licensing is the core of IP monetization in the gaming industry. Today, many successful games achieve significant growth through collaborations with well-known brands. Examples include games that incorporate characters from films (Marvel, anime, tokusatsu, etc.) or brand collaborations (such as skins tied to fashion, automotive, or sports brands). However, these collaborations carry serious legal implications. Without proper licensing agreements, the use of third-party IP may lead to significant legal disputes. Why Do Many Games Use Region Lock? The “region lock” phenomenon in gaming is not merely a technical decision—it is closely tied to both business strategy and intellectual property law, driven by the following factors: Licensing Differences Distribution rights for a game may vary across countries. For example, Publisher A may hold rights in Asia, while another entity controls Europe. Unauthorized distribution may harm these rights holders. Regulatory Compliance Each country has different regulations regarding content (violence, gambling, etc.), data privacy, and payment systems. Therefore, a game cannot simply be released globally without adapting to local regulations. Pricing Strategy Region lock allows companies to apply different pricing strategies based on purchasing power in each country. Markets with large player bases may receive lower pricing—or not—depending on marketing strategy, including region-specific promotions. Technical Limitations Some games require specific internet infrastructure or platforms that may not be available in all countries. Forcing availability could result in poor performance and damage user experience. For these reasons, region lock and distribution limitations have become standard practice in the gaming industry. If your business is involved in the gaming industry and you require further information regarding Intellectual Property protection and registration in Indonesia or other jurisdictions, feel free to contact us through the following channels and receive a FREE 15-minute consultation: 📩 E-Mail : [email protected] 📞 Book a Call : +62 21 83793812 💬 WhatsApp : +62 812 87000 889 About AFFA: Established in 1999, AFFA Intellectual Property Rights is an Indonesia-based boutique IP law firm serving international brands and innovators, offering full-service support—from prosecution and licensing to enforcement and commercialization—in Indonesia’s dynamic IP landscape. Our firm is widely recognized for its excellence, with accolades including “Best Boutique Law Firm in Indonesia” and “IP Enforcement Firm” at the Indonesia Law Firm Awards 2025 by Asia Business Law Journal, as well as being listed as a “Recommended Firm 2024 — Indonesia” by WTR 1000: The World’s Leading Trademark Professionals. For more information, please visit: www.affa.co.id.