The National Football League has announced a partnership with Mythical Games to create a blockchain video game called NFL Rivals. The game will use unique, generative 3D NFL franchise-themed NFTs and let players act as a general manager to assemble a team and compete against other teams.
Given the explosive growth of blockchain games, this deal is no surprise and more will likely follow. As we addressed back in 2020, blockchain games are becoming a key driver of overall blockchain adoption. The use of sports-themed content licenses for blockchain games is not new. We worked with Lucid Sight in connection with its MLB-licensed blockchain game announced in 2018. Rivals is a continuation of the trend of major sports teams licensing content for NFT and other blockchain projects. Given the AAA game development experience of the team at Mythical, this will likely be a state-of-the-art blockchain video game. Other notable sports-related NFT license deals include Dapper Labs’ NBA Top Shot, which has been one of the most successful NFT collectible projects.
This license deal is also a continuation of the more general trend of famous brands licensing their IP to Web3 companies for use with NFTs, metaverses, and other blockchain-related purposes. Licensing of IP for NFTs involves all of the traditional issues that arise when licensing IP and some NFT-specific issues as well. For example, we have covered some examples of legal issues and considerations that arise when brands are licensing their IP for NFTs. Other issues continue to arise.
For example, while many of the early NFT license deals only granted users a personal, non-commercial license to use the digital asset associated with the NFT, there is a growing trend to grant NFT owners some commercialization rights. Another issue that may be relevant to blockchain games is the use of dynamic NFTs. Dynamic NFTs enable the metadata and even the digital asset associated with the NFT to change even after the initial sale. For an overview of dynamic NFTs, see this Chainlink article. The legal issues with dynamic NFTs can get quite complex.
As we have previously discussed, there are also many legal issues to consider with blockchain games. For example, in addition to the IP-intensive issues, blockchain games need to be legally vetted for issues related to gambling, securities, money laundering, and other financial regulatory issues.
The opportunities and growth in blockchain games, NFTs, and Web3 generally are exploding. But so too is the regulatory scrutiny and lawsuits. Anyone leveraging these opportunities should ensure a careful review of the legal issues involved.
Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 155