Further edit 1: Translated the interview from Milkis' link.
Further edit 2: Added few bits from Fomos version.
Blizzard Entertainment -- global game development company that made StarCraft -- set forth today to clarify on the misunderstanding that some seem to have in regards to how much profit Blizzard is getting in South Korea.
Today (Dec. 2nd), COO Paul Sams from Blizzard Entertainment opened a press conference in South Korea. In this, he specifically said that the amount of profit that Blizzard gets from South Korea is about 5% of overall global sales. This is the first time where Blizzard officially stated just exactly how much profits Blizzard is getting in South Korean market.
This can be seen as a way to diffuse the bad press regarding "Blizzard, who has been getting massive profits through selling StarCraft, are also demanding StarCraft IP rights for e-sports."
This day, COO Paul Sams stated, "I visited South Korea to look over the issue related to StarCraft's IP rights. I want to clarify all the misunderstandings regarding Blizzard and the IP rights."
He continued, "I've read a news article where Korean sales takes up 60% of Blizzard's overall profits. While we see South Korea as an important market, the profits gained is not that big in comparison to overall earnings worldwide. For last 3 years, Blizzard Korea has only earned 5% of overall worldwide sales, and this is smaller than profits earned within Korea by companies such as HanGame, NCSoft, Nexon, NeoWiz, CJInternet, and other Korean online game companies."
He continued, "But South Korea is still an important market for Blizzard, and we will listen to what the Korean users have to say. Also, I have lots of special memories of South Korea. We have around 300 employees in our Korean division, and we are the only foreign game company that participated in GStar the most."
While this announcement does not state in-depth information on their sales, but it did officially state just how much profits did Blizzard get in South Korea, a controversy that has been doing on for a while.
Paul Sams stated, "Blizzard does not see e-sports as a source of profits. The reason why we are in negotiations with game TV channels for licensing is to get our IP rights acknowledged, not to get profits."
He also stated, "I believe South Korea is a place where IP rights of the developers are considered important. There's a reason why G20 has opened in Seoul. It is very important that the rights of the original IP holder is protected. I also know very well just how strict South Korea is with issues relating to IP rights. That's why USA has removed South Korea from the list of "IP rights violating country". As seen here, I believe IP rights is a very important issue."
He stressed, "A little of broadcasting fee and acknowledging IP rights is the basis needed to provide high quality shows for the fans and e-sports players." In addition, he stated, "I know that KeSPA demanded 1,700,000,000 won for broadcasting fee over the last 3 years for broadcasting Proleague in 2007. They don't have the rights to do that. In addition, the yearly broadcasting fee that KeSPA wants is still 5 times more than what GomTV is requesting KeSPA to pay. Also, this licensing fee wouldn't even impact our profits, which you can find out by seeing our financial statements."
Continued, he stated, "Blizzard has invested massive amount of money to develop StarCraft. Trying to set it apart into a public property is completely destroying the IP rights of the developer, and it will certainly reduce amount of investments for further creative game developments."
Currently, Blizzard has filed a lawsuit against MBCGame and OnGameNet through e-sports/broadcasting partner, Gretech(GomTV).
Paul Sams added, "We are considering to file a lawsuit against KeSPA as well as the broadcasting companies. We do hope that we can finalize the negotiations, but we are discussing with the lawyers in case the negotiations are not successful."
He also said, "We cannot state anything about what is exactly going on in the negotiations due to the NDA. GomTV is still in progress of negotiating with the broadcasters. Only in South Korea, our IP rights are not being acknowledged and protected."
Interview from link by Milkis: http://osen.mt.co.kr/news/view.html?mCode=C01&gid=G1012020102&page=1
- Is there any reason for owning rights to IP and derivative secondary works?
* We talked about the "60%" after seeing a different news. South Korea only brings in 5% of overall global sales. I think that, one would need a permission from the content IP rights holder, in regards to the international IP rights law. Blizzard owns the IP rights [to StarCraft]. Negotiations are done by GomTV. As for the derivative secondary works, GomTV is involved in the talks with that as the licensing partner. The whole "Blizzard demands 50% ownership of derivative secondary works", I cannot confirm for you since I am not the one involved in that argument. There's also the NDA. But, I think should the secondary works be broadcasted, then there needs to be the contracts and negotiations in place first, as it is commercialization. As for the secondary works of the progamers, one must think of their image and marketing when they participate in the league and the team. I think one can state them in the contract.
- What is the meaning of this, as an IP rights holder?
* First, GomTV is the exclusive business partner for SC1 and SC2 in South Korea. Because MBCGame and OnGameNet refused to sign the IP rights licensing contract, they are violating our IP rights. It is not right for them to broadcast when the negotiations are still in progress. So, I think our IP rights are being violated by some broadcasters.
- Why didn't you request an injunction to stop broadcasting?
* Blizzard and GomTV has always been participating in the negotiations in the good faith. Any other companies in our situation would never have the same patience we have. We still acknowledge South Korea as an important market. But now, I think there is no answer other than the lawsuit. If we really wanted to get done with this faster, we would have filed an injunction. I think that in order to broadcast, a proper license is required. So, we filed an lawsuit in the basis of IP rights violation without filing an injunction first.
- Seems there would only be waste of time arguing if injunction is not filed.
* We have not decided if we want to do it. Negotiations are continuing with GomTV. We will decide after how this negotiation goes. We will see once and for all through the IP rights violation lawsuit. I know that the broadcasters can continue to broadcast, but I hope that GomTV can finally successfully end the negotiation with them. We will also help the arbitrators in this negotiation as well. There are rumors that SC1 might not be allowed to broadcast anymore, but we hope this is not the case. I personally love StarCraft 1. As long as there is the game and the fans, it will continue to be.
- You have said reverently in regards to rights of the players . But SC 2 leagues seem to have less of the rights for the players than SC 1.
* As for the rights of the players, we first, need the freedom. Existing players under KeSPA, due to their contract, they can't participate in other leagues. We believe that we can give the progamers the chance to freely choose. If progamers so wish, they should be allowed to participate in any other leagues. In the past, KeSPA did not give the progamers any freedom. Right now, if the progamers wish so, they can return to StarCraft 1 after playing SC 2. The progamers need to have the freedom to choose what they want to play.
We can also see what can happen when Blizzard does not participate as a partner in e-sports that makes use of Blizzard games. I've seen the match fixing scandal, and I've also seen how Lee Yun-Yeol (NaDa) had his record and his achievements completely nullified just because he chose to play a game he wanted to play. This is obviously not fair. So, that is why we are trying hard to protect our IP rights. We want to grow e-sports and progamers through right methods.
- It is said Blizzard wants at least 700,000,000 won from the Korean market. Is that true? And why is this IP rights problem only in South Korea?
* The licensing fee is there to say that if they wish to use our content, they need to be capable of producing high quality content. When problems relating to intellectual rights is dealt with, the fee can be adjusted as needed. GomTV seems to have requested a fair amount as well. MBCGame and OGN are both ignoring our intellectual rights as well as not participating properly in the negotiations. Once the IP rights problem is dealt with, GomTV and Blizzard can adjust the licensing fee. This is not for the profits, but to protect our IP rights. To operate a business, it is important, as the holder of the IP, to get our IP rights protected.
All markets, including South Korea, request the rights to use our content. Of course, we cannot state exactly how much they needed to pay, but other markets do also pay as well. China and Taiwan came to us first, to get the license needed. We will finalize the licensing for broadcasting as well. It is not right to say that China has different situation than South Korea. This is same anywhere else including Europe.
- Any special benefits being prepared for the progamers?
* First, GomTV is operating GSL. They are trying their best to give the most optimal environment. We think the passion GomTV is showing is an enough of an answer for the gamers. It has only been few months since the start of GSL. We don't have the kind of base that SC 1 has, but we believe for sure that GSL can provide the same kind of environment that SC 1 has. We tried our best for last 3 years to find an agreement. We did think of what to do for the player compensation as well.
GomTV will announce plans for GSL in 2011. There will be compensations for the progamers. We will help them find a chance of getting private sponsorship. This is an example of what GomTV is doing for the players. While most players are trying to find a team, we will help them find a sponsorship.
Edit: I found some information on the law firm representing Blizzard. It is on Fomos. Holy crap, they really are Flash & Jaedong of the law firms.
Blizzard Entertainment hired Korean law firm, Kim & Jang (Chang is also a way to say 장) to represent them in the IP rights lawsuit.
Paul Sams said during the press conference that, "In regards to the lawsuit, we are cooperating with Korea's best law firm, "Kim & Jang".
Law firm Kim & Jang was founded in 1973, with history spanning for over 30 years. Based on 2010's data, this massive law firm has over 450 lawyers belonging to this firm, and has earned over 350,000,000,000 won in yearly profits. Especially, the law firm is known for being the leader in IP rights area.
The law firm has been selected as the best law firm in South Korea by the world-renowned Chambers and Partners' yearly publication, Chambers Asia.
In addition, the law firm has been selected as the best law firm in IP rights area by the professional magazine "Managing Intellectual Property" (managed under Euromoney).
According to MIP, in June 2010, Kim & Jang has been no.1 in areas dealing with applying for patents, patent lawsuit, trademark registration, trademark lawsuit, and intellectual property. Also, since 2006, Kim & Jang has been selected the best law firm for IP rights area for 4 years straight.
It is expected there will be a fierce courtroom drama with Blizzard hiring Kim & Jang as their law firm, the firm known for being the very best in IP rights area of the law.