Welcome to The Scramble, presented by Wilson Sonsini’s Electronic Gaming Group. Over the lastfour decades, Wilson Sonsini has supported hundreds of clients who have revolutionized the gamingsector. The Scramble, our yearly publication, offers a retrospective look at the gaming industry’slegal landscape of the past year, showcasing Wilson Sonsini’s contributions during that period,delivering insightful industry analyses, and highlighting anticipated trends.A look back. Over the past year, Wilson Sonsini has provided comprehensive legal services togaming clients, including supporting product launches, cross-border partnerships, technologyintegrations, brand-building efforts, compliance reviews, and industry-wide collaborations.Building on the significant growth in immersive media technologies, artificial intelligence (AI)-driven game development, and global market expansion that began in 2024, 2025 led to continuedadvancement in these areas. The global games market generated $197 billion this past year, a7.5 percent increase year-on-year.1 With new console launches and announcements of upcominggaming products,2 the growing use of AI in video game development,3 the expansion of emergingmobile gaming markets in Southeast Asia, Latin America, and parts of Africa,4 and the creationof cutting-edge gaming technology from start-ups and existing players,5 the gaming industrydemonstrated a stronger-than-expected performance in 2025. As industry players continue toshape these transformations, the firm continues to invest heavily in pioneering new tools, refiningoperational frameworks, and strengthening support systems for innovators in the gaming industry.A look forward. In 2026 we expect the gaming industry to enter an era of expansion anddiversification as both veteran developers and newly formed studios branch into previouslyunderexplored niches. A recent forecast by MIDiA Research, an entertainment-focused marketresearch firm, projects the global games industry will grow to roughly USD $236.9 billion in 2026,underscoring resurgent demand across facets of gaming.6 Many of these new studios will likelyleverage AI not just to cut costs, but to create personalized, reactive game worlds, procedurallygenerated content, and adaptive narratives that respond in real time to a player’s behavior. Thisshould enable smaller teams with tighter budgets to deliver immersive experiences rivaling thoseof much larger publishers. At the same time, we anticipate the rise of hybrid distribution models,including cloud-based gaming across portable, mobile, and console platforms, allowing gamesto reach new audiences globally, especially in emerging regions. These shifts could foster a boomin indie exports and global multiplayer communities, expanding the industry’s reach far beyondtraditional strongholds. Finally, as the gaming industry continues to evolve technologically andeconomically, companies will face intensifying pressures from new and updated regulations inareas such as data privacy, content moderation, AI governance, and monetization practices.If you missed any of our 2025 gaming publications, you can find them linked from this issue of TheScramble and on our website (https://egg.wsgr.com). Throughout the year, we invite you to stayupdated with current developments through our publications and podcasts. Visit Wilson Sonsini’sSubscription Center to receive regular updates delivered directly to your inbox.We hope you enjoy The Scramble and look forward to connecting with you at the 2026 GameDeveloper’s Conference in San Francisco. If you have any inquiries about Wilson Sonsini’s ElectronicGaming Group, learn more about our team by visiting https://egg.wsgr.com or contact us by emailat [email protected] for reading,Christopher PaniewskiINDUSTRY INSIGHTWhat are the “next frontier” generative AI use-cases in e-gaming(e.g., dungeon-style narrative games, personalized AI coaches,procedural generated worlds), and what legal risks do they pose?As anticipated in last year’s issue of The Scramble, multi-modal AIis transforming both the creation and experience of gaming. On thedevelopment side, AI tools allow individual creators to act as art directorsfor massive asset libraries. While some studios may use these tools to reduceheadcount, the more innovative approach involves leveraging existing teamsto exponentially scale content production, making gaming environments significantlyricher and more expansive. On the player side, we are moving toward an era of endless,procedurally generated worlds featuring NPCs with genuine autonomy. This shifts gamesfrom static scripts into living environments that adapt to a player’s specific choices, creatingtruly personalized narratives.However, these “next frontier” use cases introduce significant legal and social challenges.Models trained on scraped data pose constant litigation risks, particularly if an AIinadvertently generates outputs similar to existing trademarks or characters. To mitigatethis, forward-thinking studios are fine-tuning models exclusively on their own original assetsto ensure outputs remain legally defensible derivative works. Socially, the industry mustalso address the risks of gaming addiction and the unpredictability of autonomous NPCs.Without robust safety guardrails, AI characters could generate toxic content in real-time,creating reputational liabilities that did not exist with pre-written dialogue.Ultimately, the winners in this space will be the studios that use these tools not to replacethe human element, but to amplify it. The potential for infinite, personalized worldsrepresents a massive opportunity, but it requires a commitment to creating experiences thatare as legally secure and socially responsible as they are technically impressive.- Atussa Simon, Technology TransactionsAI AND GAME DEVELOPMENTI think the examples above are good examples of “next frontier” generativeAI use-cases in e-gaming, as are things like AI non-player characters (NPCs).Companies need to take steps to address unpredictable outputs, such asdefamatory content, infringing materials, or inappropriate materials beingprovided to minors. There are also a number of data privacy issues, especiallywith minors interacting with AI platforms. Finally, where substantive portions of a game arepurely AI-generated, there are potential IP risks since purely AI-generated outputs are notprotectible by U.S. copyright law. Companies need to have strong terms of service to protecttheir games, as well as robust disclaimers, and should also implement content filtering toprotect their users.- Barath Chari, Technology TransactionsWILSON SONSINI | THE SCRAMBLE 2026 2WILSON SONSINI | THE SCRAMBLE 2026 3The Copyright Office has long stood behind the “human authorship”requirement and reaffirmed its position in January 2025 that works createdentirely by AI are not protected by copyright. The U.S. Court of Appeals forthe D.C. Circuit issued an order in March 2025 deferring to the U.S. CopyrightOffice’s interpretation, but the plaintiff in that case has petitioned for reviewfrom the U.S. Supreme Court, and we may see the final word on the requirement soon.7 Whilethe issue remains unsettled, it is important for game developers who want to experimentwith AI to ensure human involvement in the game-making process (such as by editing andpolishing AI-generated assets) to support any claim to copyright.- Qifan Huang, LitigationHow is the increasing use of generative AI in game development(e.g., art assets, character design, voice, dialogue) challengingtraditional notions of copyright and “human authorship?”Current legal frameworks, such as those from the U.S. Copyright Office,generally do not grant copyright to works created solely by AI. If a studiogenerates a massive world via AI with minimal human intervention, theymay find it difficult to protect that intellectual property (IP) from beingcloned by competitors. To bridge this gap, studios must implement humanin-the-loop workflows. By adding a level of original human authorship through the manualarrangement and creative refinement of AI outputs, developers can ensure the resultingwork is copyrightable to the extent of the human creative contribution.- Atussa Simon, Technology TransactionsAI AND GAME DEVELOPMENTINDUSTRY INSIGHTWILSON SONSINI | THE SCRAMBLE 2026 3Wilson Sonsini is a top three legal provider for AI gamingdeveloper tools, serving as counsel to three of the top fivecompanies in the vertical.8WILSON SONSINI | THE SCRAMBLE 2026 4What legal strategies should game developers adopt to secure IPrights and manage ownership for AI-assisted creations?INDUSTRY INSIGHTThe laws governing the protectability of AI-assisted creations are evolvingquickly, so companies should adopt a flexible strategy and try to rely onnot just copyrights but also trade secret protection and trademarks forbranding. Layering multiple types of IP protection on a game can be a usefultool to ensure that there are multiple paths to protection. On copyright, sincecopyright offices remain skeptical of purely AI-generated work, companies should documenthuman creative contributions carefully. Finally, be careful to review the license agreementswith AI tool vendors to ensure that the provider does not claim rights to outputs.- Barath Chari, Technology TransactionsAI AND GAME DEVELOPMENTWilson Sonsini’s Electronic Gaming Group has worked with clients throughout the digital gaming sector, from design firmsand publishers to component manufacturers and online gaming providers. This podcast series takes a closer look at thestart-up world of gaming companies. What do game founders care about? What should they care about? What are thecommon pitfalls and traps to avoid? Each episode features a different Wilson Sonsini attorney chiming in with their area ofexpertise to help guide game companies to success.Podcast Episode:A Conversation with Tyler Cloutier of Clockwork LabsWILSON SONSINI | THE SCRAMBLE 2026 5AI AND GAME DEVELOPMENTUKIPO Decides Patentability of Computer Games inthe UK Involving Real-World Player InteractionsBy Jinny Park, Hin Au, and Ali AlemozafarAn August 2025 decision issued by the UK Intellectual Property Office (UKIPO) concerning a patent applicationfiled by a game developer company Bandai Namco Entertainment Inc. (Bandai Namco) serves as a useful examplefor informing patent strategies on gameplay mechanics in the UK. Bandai Namco, as some may be aware, is thecreator of games such as Pac-Man™ and Elden Ring™. Bandai Namco filed a patent application at the UKIPOrelated to a real-world game mechanic where players gather at a physical location.WILSON SONSINI | THE SCRAMBLE 2026 5Wilson Sonsini is the number one legal services provider onperipherals and accessories deals, representing two of the topfive companies in the vertical by market capitalization.8WILSON SONSINI WILSON SONSINI || THE SCRAMBLE 2026 THE SCRAMBLE 2026 6Consolidation may trigger concerns where acquisitions result in the creationof a dominant firm, substantially reduce competition between remainingmarket players, foreclose rivals’ access to key inputs, markets, or customers,or entail the acquisition of an innovative challenger, e.g., a major publisheracquiring an emerging AI-driven studio. Outside of acquisitions, concerns maytypically arise around exclusivities or non-competes in distribution or other cooperationagreements or around practices by leading players involving bundling, self-preferencing, ora refusal to provide access to a platform.- Jindrich Kloub, Regulatory and ComplianceAs consolidation increases in an industry, the antitrust agencies growincreasingly attuned to the potential for competitive concerns. There isparticular concern when incumbent market leading firms, such as majorpublishers in e-gaming, begin acquiring start-up companies that can beviewed as nascent or maverick competitors in the market. The concern isthat the innovations and competitive pressure that these new entrants bring to the marketwill be greatly limited or eliminated if the new entrant is acquired by a large, incumbentcompetitor. Further, the agencies may see these acquisitions as a strategic action by theincumbent company to quash competition. As the gaming-technology and AI marketsconsolidate, companies seeking to make acquisitions should consult antitrust counsel earlyand prepare for potential scrutiny from antitrust agencies.- Jamillia Ferris, Regulatory and ComplianceHow might consolidation in the gaming-technology/AI space(e.g., major publishers acquiring AI start-ups) triggercompetition concerns?Antitrust and competition questions are likely to persist in the gamingindustry, but I see consolidation and M&A activity more as a response tocompetition concerns rather than the source. As AI continues to level theplaying field for gaming development, competition will become increasinglyfocused on customer acquisition, distribution, and content differentiation.Consolidation is a natural response to this environment.- Brendan Coffman, Regulatory and ComplianceANTITRUST AND COMPETITIONINDUSTRY INSIGHTWILSON SONSINI | THE SCRAMBLE 2026 7ANTITRUST AND COMPETITIONFirm Advises Golden Star on De-SPAC Transaction with GamehausOn January 24, 2025, Golden Star Acquisition Corporation (Golden Star), a blank check company formed for the purpose ofeffecting a business combination with one or more businesses, completed its initial business combination with GamehausHoldings Inc. Wilson Sonsini advised Golden Star on its initial business combination with Gamehaus.CLIENT HIGHLIGHT Learn MoreINDUSTRY INSIGHTThe more concentrated a market is, the greater the risk a transaction will getquestions from the antitrust agencies and face a drawn-out merger review.To mitigate this, companies considering transactions in this space shoulddo the work upfront and anticipate both agency questions and consumer orpartner concerns (including around direct competition, but also non-horizontalconcerns like content accessibility and cross-platform play/interoperability). Having a clearrationale and being able to show how beneficial the transaction is for competition andinnovation in the e-gaming space — and ultimately consumers — is also critical.- Deirdre Carroll, Antitrust and CompetitionCompetition law requires all acquisitions or investments over a set threshold($126.4 million for 2025, increasing to $133.9 million on February 17, 2026) tobe reported directly to antitrust agencies for initial review under the HartScott-Rodino Act. If the antitrust agencies have concerns that the merger mayresult in anticompetitive effects the agencies will launch a more in-depthinvestigation. In recent years, the e-gaming industry has seen large-scale mergers (such asMicrosoft/Activision) and investments (such as Saudi Arabia’s investments through the PublicInvestment Fund) that have led to increased concentration. The antitrust agencies mayplace additional scrutiny on mergers in concentrated markets. There is also an increasedrisk of non-merger related anti-competitive conduct in concentrated markets includinginformation sharing and coordinated conduct.- Jamillia Ferris, Regulatory and ComplianceHow are market concentrations and competition law affectingM&A in the e-gaming industry?Wilson Sonsini is one of the top three legal services providers onplatform deals.8WILSON SONSINI | THE SCRAMBLE 2026 8M&A YEAR IN REVIEW$13.2M$11.3M $12.1M$8.7M$10.9M$17.4M$15.3M$10.5M $9.7M$20.0M$0.0M$5.0M$10.0M$15.0M$20.0M$25.0M2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Median Deal SizeGaming Deal Countby Deal Type8(Excluding VC, 2025)M&A MedianGaming Deal Size8PublicInvestmentsDebtPrivate Equity GrowthBuyout/Other PEM&A/SPACBankruptcy56%4%9%9%9%Wilson Sonsini is one of the top three legal services providerson company-side gaming deals for the last 10 years, notablyadvising a client on its $800 million sale of its mobile gamingbusiness in 2025.8WILSON SONSINI | THE SCRAMBLE 2026 9By Chris Olsen, Cédric Burton, TomEvans, Claudia Chan, and RebeccaWeitzel GarciaIn 2025, lawmakers and enforcementagencies around the globe have keptone issue firmly in the spotlight: theprivacy and safety of minors online.This heightened focus shows no sign ofabating, with early indications thatcompanies should expect to see morelegislative and regulatory initiatives inthe year ahead.In our 2026 Year in Preview: GlobalMinors’ Privacy and Online SafetyPredictions, we highlight six minors’privacy and online safety trends thatwe expect to see in the new year. Hereare the top three most relevant to theonline gaming community.1. Age assuranceAge assurance technologies canbe an important tool in helping toidentify minors on a service, and tailortheir experience accordingly. Lawsrequiring some form of age assuranceor age verification — beyond a selfdeclaration — have been in focus overthe last 12 months.In the U.S., both state and federallawmakers considered legislationrequiring such protocols. Most notably,four states passed laws requiringapp stores to provide age categorysignals to developers (often referredto as “app store accountability laws”).Other countries, like Singapore, haveconsidered or adopted similar legalframeworks. In Europe, the EuropeanCommission (EC) struck a pragmaticchord in its guidelines on the protectionof minors (the Guidelines), noting thatproviders of online platforms shouldadopt a proportionate risk-basedapproach when deciding whether toimplement age assurance measuresfor the purposes of complying withthe Digital Services Act (DSA). In theUK, the Online Safety Act 2023 (OSA)sets out relatively clear rules on thepurposes for which age assuranceshould be used. The UK’s Office ofCommunications early enforcementefforts have focused on complianceby websites hosting adult content,however it is expected that theregulator will turn its attention to abroader range of services in 2026, andreport on the overall effectiveness ofage assurance technologies.In 2026, we can expect to see furthermovement in this space globally. Whilethe app store laws will be challengedin the U.S., legislatures will continueto discuss if and how to impose ageassurance requirements. And the EUhas shown early indications that itmay introduce new rules requiring13-16-year-olds to obtain parentalconsent before accessing certainplatforms, including social mediaplatforms, video-sharing platforms,and certain AI companions.2. “Addictive” featuresIncreased attention has been paidglobally to how products and servicesdirected at minors are designed,especially with respect to so-called”addictive” features.In the U.S., courts continue to grapplewith the question of whethercompanies can be regulated or suedregarding certain design decisionsabout their online services. In Europe,the topic of “addiction” in the contextof digital services has not beenexplicitly referenced in EU or UKlegislation to date, although rulesGlobal Minors’ Privacy and Online Safety PredictionsCHILD SAFETY AND PRIVACYWILSON SONSINI | THE SCRAMBLE 2026 10around the use of so-called “darkpatterns” are in force under the DSA,General Data Protection Regulation(GDPR), and Unfair CommercialPractices Directive. In July 2025, theEC signaled that this may changewhen it launched a call for evidencein connection with a new “DigitalFairness Act” (DFA) which would tacklepractices including “addictive designof digital products.” The DFA is alsoreferenced in the context of the EC’s2030 Consumer Agenda. In the UK, itremains to be seen whether legislationwill be introduced to address the topicof addiction head-on, or whetherthe government will rely on existingregulators and rules — includingthe OSA and the UK InformationCommissioner’s Office’s (ICO) AgeAppropriate Design Code — in the space.Finally, Brazil enacted the EstatutoDigital da Criança e do Adolescente(ECA Digital Law), which includesvarious provisions aimed to protectminors online. Notably, the ECA DigitalLaw prohibits companies from offeringloot boxes in electronic games that aretargeted or likely to be accessed byminors.In 2026, we can expect continueddiscussions around product design andits effects on minors. In the U.S., courtswill continue to examine the issue ofwhether certain design features cancause actionable harms and whethercompanies can be held liable for thosedesigns. Discussions in Europe aroundthe introduction of a DFA will bewatched closely, particularly given thebody’s broader push to simplify certainelements of its regulatory frameworkfor digital services. Broadly, we canexpect that more jurisdictions willstart examining how design choicesaffect minors in particular.3. Addressing potentially harmfulcontent for minorsOne of the motivating factorsanimating increased regulationand enforcement to protect minorsonline stems from their access tocertain content perceived as harmfulto minors. This content can includesexually explicit material or contentthat promotes goods or services thatare illegal for minors.In the U.S., many states have passedlaws requiring age verificationfor certain websites that providecontent that is obscene for minors.Additionally, in Texas, age verificationis required for websites that makeavailable AI tools that can generatecontent considered obscene for minors,unless such use is prohibited by thecompany’s terms and the companytakes steps to limit the creation ofsuch content. In Europe, the EC’sGuidelines have provided directionto service providers on the types ofcontent they may need to protectminors from, including content thatis hateful, harmful, or amounts todisinformation. In July 2025, dutiesunder the OSA to assess and mitigaterisks to minors became applicable,requiring regulated services to takesteps in relation to broad categoriesof content deemed “harmful.” Theimpacts of these measures are nowbeing felt in terms of user experience.And under Brazil’s ECA Digital Lawcompanies whose online content,product, or services are “inappropriate,inadequate, or prohibited” for minorsunder 18 are required to implementmeasures to prevent minors fromaccessing such material.In 2026, we can expect this trend tosolidify its place in the minors’ onlinesafety playbook. In the U.S., statesmay begin enforcing these lawsagainst obscene content for minors.Additionally, we may see more scrutinyaround how companies enforcecontent moderation for minors in lightof recent app store accountabilityacts. In Europe, despite the potentiallybroad application of laws such asthe DSA and OSA, we expect to see acontinued focus on the availabilityof content judged to be most harmfulto minors, including adult contentand disinformation. Broadly, we canexpect more countries to addressconcerns about minors accessingage-appropriate experiences online,possibly requiring some form of ageassurance when certain content isillegal for minors or perceived asharmful.The upshot of all these initiatives isclear. Safety and privacy issues forminors are top of mind for regulatorsaround the world. Companies,including online gaming platforms,providing services to minors will wantto pay close attention to developmentsin these areas in the coming year.CHILD SAFETY AND PRIVACYWILSON SONSINI | THE SCRAMBLE 2026 10The main changesto the COPPA rulethat will impact thegaming industryinclude new noticeand data security requirements. Onthe notice front, the new rule requiresthat operators must disclose in adirect notice to parents the identitiesor categories of third parties to whomthe information collected may bedisclosed. In addition, the rule requiresoperators to disclose the identitiesand categories of all third parties whoreceive personal information from theoperator. These notice changes willrequire more detail and informationfrom operators on third-party sharingin their notices to parents. On the datasecurity front, the rule now requiresoperators to establish and implementa written information security programthat requires risk assessments,implement safeguards to controlidentified risks, and evaluate theadequacy of the program annually.The new rule also requires companiesto implement a formal dataretention policy.- Chris Olsen,Regulatory and ComplianceHow will the Genshin Impact enforcement action settlement affect the gaming industry?The FTC finalized a change in the COPPA rule on June 23, 2025; what are the main changesfor the new rule and how will these changes impact thegaming industry?Background: Genshin Impact is a 2020 free-to-play, open-world action role playing game. In the 2025 Genshin Impactsettlement, the developer Cognosphere (doing business as HoYoverse) paid $20 million to resolve allegations that it violatedthe Children’s Online Privacy Protection Rule (COPPA) and Section 5 of the Federal Trade Commission Act. The U.S. Departmentof Justice (DOJ) and the Federal Trade Commission (FTC) alleged the studio used “dark patterns,” including misleadingdrop rates and complex virtual currencies to deceive players about the true costs and odds of loot boxes. Additionally, thecomplaint charged that Genshin Impact collected personal information from children under 13 without verifiable parentalconsent. Beyond the fine, the settlement mandates a neutral age gate and prohibits loot box sales to users under 16 withoutaffirmative parental approval. This case underscores increasing regulatory scrutiny on deceptive monetization and minorspecific data privacy in the gaming industry.9Genshin likely alreadyhas had an impact ona number of practicesin the gaming industry.In Genshin, the FTCalleged that “Genshin . . . deceivedchildren, teens, and other players intospending hundreds of dollars on prizesthey stood little chance of winning.”The FTC warned, “Companies thatdeploy these dark-pattern tactics willbe held accountable if they deceiveplayers, particularly kids and teens,about the true costs of in-gametransactions.” Notably, the relief acourt approved included a prohibitionon allowing kids under 16 to purchaseloot boxes without affirmativeparental consent. Companies thatoffer these types of digital featuresin their games would be well-servedby reviewing the FTC’s complaint andOrder in Genshin to understand howthe FTC expects companies to operatein connection with these offers.- Chris Olsen,Regulatory and ComplianceCHILD SAFETY AND PRIVACYINDUSTRY INSIGHTWILSON SONSINI | THE SCRAMBLE 2026 11WILSON SONSINI | THE SCRAMBLE 2026 12How should studios and platforms address cybersecurity and compliance challenges,especially with mobile and cloud-based gaming?Studios and platformsshould addresscybersecurity andcompliance challengesin mobile and cloudbased gaming by embedding securityand regulatory considerationsdirectly into product design and liveoperations. This means employingzero-trust principles, securing accountsand APIs against fraud and takeover,and relying on behavioral and serverside detection rather than invasiveclient controls, especially on mobile.Cloud infrastructure presents itsown security demands, includingidentity and access management,encryption, segmentation, andcontinuous monitoring. At the sametime, companies must align withglobal data protection and platformrules by minimizing data collection,respecting user consent, protectingminors, and maintaining clear audittrails and incident-response processes.Ultimately, treating cybersecurity,privacy, and compliance as ongoingtrust and governance commitments — rather than one-time technical fixes — allow studios to scale globally, meetregulatory expectations, and protectboth competitive integrity andplayer confidence.- Chris Olsen,Regulatory and ComplianceWhile match-fixing innon-digital contexts haslong been illegal, theapplication of matchfixing in the digital arenais still evolving. Some nongovernmentalorganizations have been workingto address match-fixing in esports,and game developers have imposedprohibitions against match-fixing andother efforts to undermine competitiveintegrity.10 We expect policymakersto work to standardize approachesto match-fixing prohibitions. AI isalso impacting the gaming industry.Companies that employ algorithmicmanipulation that may affectoutcomes risk consumer protectionaction if they are not adequatelytransparent with consumers abouthow their algorithms operate. And AImay also be employed in ways thatviolate terms of use or gaming rulesto benefit players. Companies willcontinue to assess these developmentsin their anti-cheat measures.- Chris Olsen,Regulatory and ComplianceI think we are in earlydays in this space.Esports are global, soabsent internationalframeworks (whichseems unlikely in the present climate)I think the leagues themselves willbe the first line of defense here. Thereare also existing laws governingmatch fixing (such as state gamblingstatutes and wire fraud laws in theU.S.). On algorithmic manipulationand AI performance enhancementin particular, we first need to reacha consensus on what uses of AI arelegitimate and gaming, and fromthere will need to address this throughplayer contracts and league rules. Theleagues are also going to have to putsome real effort into detection.- Barath Chari, TechnologyTransactionsCORPORATE GOVERNANCEAND REGULATIONINDUSTRY INSIGHTWILSON SONSINI | THE SCRAMBLE 2026 12What legal or regulatory frameworks are emerging (or needed) around match-fixing,algorithmic manipulation, or AI-driven performance enhancement?WILSON SONSINI | THE SCRAMBLE 2026 13What new governance structures are emerging internally(e.g., legal, engineering, and data security) to manage crossborder technology and data issues holistically?The new legal regimes that have been implemented over the last year haveled to the need for companies to implement new and better complianceprograms. For example, we have seen firms implement internal controlsto monitor the collection of U.S. sensitive personal data and governmentdata that is subject to the DOJ’s Data Security Program. Typically, theseinternal controls will involve 1) processes to review new customer or vendorengagements to identify any potentially relevant data that will be collectedor generated and 2) additional IT security controls to ensure that the data isnot released internally or externally unless authorized under the regulations.We have also seen investment firms implement new programs for compliance related tothe Outbound Investment Security Program, which restricts U.S. investment in (and othercollaboration with) businesses linked in certain ways to “countries of concern,” particularlyChina. Companies are requesting additional information from counterparties on anynexus with countries of concern and requesting additional representations in investmentagreements to address these risks.Finally, as discussed above, we are closely monitoring updates for new rules and regulationslimiting the ability of entities headquartered in or located in China to use U.S. computingresources. Any new restrictions could require U.S. companies to implement additionalcompliance structures and technical measures.- Stephen Heifetz and Nimit Dhir, Regulatory and ComplianceWe see gaming companies using more cross-functional committees andescalation paths to manage cross-border tech and data issues. Thesetypically bring together legal, engineering, and security teams to addresscompliance with U.S., EU, and global cybersecurity and data laws. As theserequirements are becoming increasingly technical in nature (e.g., prescriptivesecurity measures for software or hardware), such hybrid teams are essential to translatethem into operational reality. These governance structures also help decision-makers meettheir risk management duties under EU cyber laws by improving visibility and oversight onthe company’s cyber exposure and strategy.- Laura Brodahl, Regulatory and ComplianceCORPORATE GOVERNANCEAND REGULATIONWILSON SONSINI | THE SCRAMBLE 2026 13INDUSTRY INSIGHTWilson Sonsini is one of the top three legal services providers forcompanies on esports deals and has represented four of the topfive companies in the subsector by total raised.8WILSON SONSINI | THE SCRAMBLE 2026 14CombatingIncreasedHarassmentAgainst GamingProfessionalsBy Vicky Zhou and Christopher A. PaniewskiIn January 2025, Square Enix, the video gamepublisher behind famous role-playing gamefranchises such as Final Fantasy and DragonQuest, released its new customer policyaddressing customer harassment againstits employees, staff, and partners. This alertexamines the background and the content of thiscustomer policy, compares Square Enix’s policywith similar initiatives across the electronicgaming industry, and analyzes the reactions ofthe consumers and implications to Square Enixand other companies in the industry.CORPORATE GOVERNANCEAND REGULATION Learn MoreWILSON SONSINI | THE SCRAMBLE 2026 14WILSON SONSINI WILSON SONSINI || THE SCRAMBLE 2026 THE SCRAMBLE 2026 15INDUSTRY INSIGHTCLIENT HIGHLIGHTIn the current market, what does the fundraising process look like for anew gaming start-up? What do VCs, strategic investors, and partnersreally care about?Fundraising for game companies has been challenged given the market.On the other hand, funding sources have diversified for game companies tonow include angels, accelerators, venture capital firms, equity and rewardscrowdfunding, and game publishers. We have also seen the emergence ofnewer investment structures like debt notes with revenue sharing that couldprovide an earlier return to investors without equity dilution.- Jonathan Chan, CorporateFundraising today is definitely more grounded than it was a few years ago.Investors still want big ideas, but they’re spending more time on evidence ofexecution: a playable build, early engagement signals, or real monetizationlevers. VCs are looking for founders who can pivot quickly, manage burn, andtell a story that scales beyond one title. Strategics care about IP, platforms,and how your game or tech fits into their broader ecosystem. Across the board, capitalefficiency and early proof points matter more than they did a few years ago. If you wanta broader snapshot of how early-stage rounds are getting done right now (includingstructures and valuation trends) our latest Entrepreneurs Report is a useful reality check onwhat founders are walking into in this market.- TJ Tingjie Li, CorporateOn August 13, 2025, Sydney, Australia-based Qloud Games, the independent studio behind the upcoming massivelymultiplayer online (MMO) game Loftia, announced a $5 million seed funding round led by BITKRAFT Ventures and GFR Fund,with participation from a16z Speedrun, 1UP Fund, and Gaingels. Wilson Sonsini advised Qloud Games on the transaction.Wilson Sonsini Advises Qloud Games on $5 Million Seed RoundFUNDING Learn MoreWILSON SONSINI | THE SCRAMBLE 2026 16Start-Up Video SeriesAccess videos from Wilson Sonsini attorneys that guideyou through key legal matters for start-up companies,including employment and intellectual property. Thisseries assists you as you prepare to NEST!Pitch Deck BuilderUse our Pitch Deck Builder to develop your company’spitch deck, an integral piece of your investor presentationportfolio. The pitch deck builder highlights yourcompany’s business plan, market analysis, and go-tomarket strategy.* Download our template to get started.RoadmapReceive a complimentary customized roadmap to legalservices you may need within minutes by answering aseries of simple questions. Your custom roadmap willcover a variety of legal start-up concepts.Investor Readiness ChecklistUse our Investor Checklist to get ready for pitches toinvestors.* The Investor Checklist helps prepare you foroutreach to investors with key questions like: Do youhave the key components of a business plan and supportmaterials; is your business ready to be invested in; andwhich investor is right for you and your business?Term Sheet GeneratorAccess Wilson Sonsini’s emerging companies practiceTerm Sheet Generator where you can generate a venturefinancing term sheet.* The Term Sheet Generator includestutorials and annotations on financing terms.For companieslooking to levelup, we recommendapplying for theWilson SonsiniNEST program.The Start-Up Toolkitis a complimentaryseries of resourcesintended to informearly-stage gamingcompanies aboutcore legal needs.https://egg.wsgr.comELECTRONICGAMINGGROUP*Investment not guaranteed.Attorney AdvertisingSTART-UP TOOLKIT16WILSON SONSINI | THE SCRAMBLE 2026 17INDUSTRY INSIGHT Learn MoreHave you seen AI work its way into earlier phases of gamingstart-ups? Are founders relying on AI, and how is this impactingthe ability to draw funding?What is one big piece of advice to an individual thinking offounding a gaming start-up?We have seen recent gaming start-ups being funded while working atdifferent levels of generative AI: from traditional studios using gen AI tools forfaster, cheaper development, to game developers integrating gen AI into thegameplay and experience, to companies creating development platforms thatallow consumers to vibecode their own games. It’s exciting to follow the teamsthat are working with gen AI in games, and it still remains to be seen to what degree andhow gen AI evolves the games industry.- Jonathan Chan, CorporateThe founders who do best are the ones who test early, listen closely to players,and aren’t overly precious about their first idea; it’s much easier to iterateor pivot when you haven’t overbuilt too soon. At the same time, don’t ignorefundamentals like IP protection and key-person risk. I’ve seen gaming startups stumble by scaling too fast, bringing teams in-house too early, or failingto put the right legal protections in place, mistakes that are hard to unwind later and canderail an otherwise promising company.- TJ Tingjie Li, CorporateOn June 26, 2025, Spekter Games, a next-gen game publisher dedicated to crafting high-quality mobile games enriched withseamless Web3 incentives, announced a $5 million funding round and launched its first title, Spekter Agency. The fundinground saw participation from prominent investment firms, including a16z speedrun, London Venture Partners, BRV Capital,Chamaeleon, Accelerator Ventures, Impact46, Versus Ventures, and Alumni Ventures. Wilson Sonsini advised Spekter Gameson the financing transaction.Wilson Sonsini Advises Spekter Games on $5 Million FundraiseFUNDINGCLIENT HIGHLIGHTYes, AI is showing up in earlier phases such as prototyping and asset creation.Used well, it lets small teams move faster, which investors generally like. But AIby itself isn’t a hook anymore — everyone claims to be an AI start-up regardlessof what they do these days. Founders still need to show the game is fun, andthat AI meaningfully improves player experience or production efficiency in away that’s hard to copy. The strongest pitches treat AI as a tool, not the thesis.- TJ Tingjie Li, CorporateWILSON SONSINI | THE SCRAMBLE 2026 18Pre/Accelerator/IncubatorAngel Early Stage VCLater Stage VCGrants4%6%Seed14%Gaming VC Count8 byFinancing Type(2025)VENTURE CAPITAL YEAR IN REVIEWVC Median GamingDeal Size8$5.8M $6.2M $6.8M $6.5M $7.1M$10.2M$13.5M$11.3M$15.0M$20.0M$0.0M$5.0M$10.0M$15.0M$20.0M$25.0M2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Median Post ValuationOn July 9, 2025, Circle Games announced that it has closed a $7.25 million round of funding. The round was led by BitkraftVentures, with a16z Speedrun, Play Ventures, e2vc, and APY Ventures also participating. Circle Games plans to use theproceeds from the funding to develop mobile casual games. Wilson Sonsini advised Circle Games on the transaction.Firm Advises Circle Games on $7.25 Million Funding Round Learn MoreCLIENT HIGHLIGHTWILSON SONSINI | THE SCRAMBLE 2026 18WILSON SONSINI | THE SCRAMBLE 2026 19INDUSTRY INSIGHTHow will tightening export-control rules on advanced graphicshardware, AI chips, or real-time rendering technology affectstudios operating across multiple regions?The rules controlling the export, reexport, and transfer of advanced graphicshardware and AI chips and related technology are currently in flux. In June2025, the administration announced the rescission of parts of the Biden-era AIDiffusion Rule that limited the export of advanced computing chips worldwideand its plans to instead issue a revised rule. However, we have yet to see aformal withdrawal of that rule or the details of the revised rule. It is importantto understand that restrictions on the export, reexport, and transfer ofadvanced graphics hardware and AI chips and related technology still exist — particularly on their export to China and certain other countries. That said, weunderstand that the current administration reportedly has been authorizingexports of NVIDIA’s H200 chips to China under individual export licenses but continues torestrict exports of the H100 and similar hardware.One outcome of the increased controls that we have already been seeing is rapiddevelopment of comparable technologies in other jurisdictions, such as HuaweiTechnologies’ rapid development of its Ascend chips and expansion of the HarmonyOS.We saw a similar outcome with the Chinese space industry when the U.S. implementedITAR controls on commercial satellites. In addition, we have seen a focus on offeringadvanced computing as a service rather than through hardware exports — although we alsounderstand that the administration is looking for ways to control the provision of theseservices. We expect to see further developments on these controls in 2026, from the U.S.administration, in Congress, and in other countries.- Jahna Hartwig and Anne Seymour, Regulatory and ComplianceINTERNATIONAL AFFAIRSWILSON SONSINI | THE SCRAMBLE 2026 19Wilson Sonsini is the number one legal services provider onhardware deals, representing half of the top 10 companies in thevertical by market capitalization.8WILSON SONSINI | THE SCRAMBLE 2026 20The U.S. governmenthas continued toexpress a desire to limitthe ability of entitiesheadquartered in orlocated in China to useU.S. computing resources.We are watching fornew controls on theprovision of SaaS or othercross-border computingservices. These controlsmay impact how U.S.companies work withpartners and subsidiaries located inChina — both in development and theprovision of cloud gaming platforms.The development of new Chinabased technologies is requiring U.S.companies to consider how they canadapt and work with these Chinabased technologies. For example, U.S.companies must consider prohibitionson providing games subject to U.S.controls to Huawei’s cloud or appstores and implications of modifyinggames and other applications tospecifically work with China-basedtechnologies.In addition, Trump’s tariffs have causedmany companies to examine theirdistribution strategies and supplychains. Companies that developconsoles, data center hardware, andother equipment have been workingto determine the impact of the tariffsand whether shifting to a supplier inanother country will be cost effective.The tariffs have not yet been imposedon electronic transfers of softwareand technology, which means thatmost software companies have notbeen affected directly. However,we understand that the increasedcost of producing the hardwareneeded for data centers has floweddownstream and increased costsfor some companies. Even after theFebruary 24, 2026, U.S. Supreme Courtdecision invalidating the use of theInternational Emergency EconomicPowers Act to impose tariffs, significantuncertainty exists. Not all Trump tariffswere invalidated by the decision (seeWilson Sonsini alert, “U.S. SupremeCourt Shakes Up Trump Tariff Tactics”).Additionally, the Administration hasother tools available to it to imposetariffs and has already imposed a newglobal “temporary import surcharge”of 10 percent on many of the sameproducts affected by prior tariffs.- Jahna Hartwig, Anne Seymour, and Nimit Dhir, Regulatory and ComplianceGaming companiesplanning cross-borderM&A, joint ventures, orstrategic data-sharingpartnerships shouldinternalize severalCFIUS trends. First,CFIUS focuses on datasensitivity over sectorlabels — entertainmentstatus may not insulate a deal ifpersonal, geolocation, voice, or othersensitive personal data is involved.Second, access rights matter: evenfor minority investments, board orobserver rights, or shared analyticsplatforms could trigger greater CFIUSscrutiny if foreign partners gain dataor operational insight into how agaming company operates. Third,future risk counts — CFIUS is likely toevaluate how data use may expandpost-transaction, not just currentpractices. Finally, in more sensitivetransactions (e.g., where the dataat issue is particularly of interest,or where CFIUS may be particularlyinterested in an investor) companiesshould be mindful that CFIUS couldeventually impose conditions on atransaction, and therefore, companiesshould plan early for mitigation(e.g., where CFIUS may requiredata localization, access controls,governance ring-fencing), bake CFIUSanalysis into deal structuring, andnot treat it as a late-stage regulatorycheck.- Stephen Heifetz and Nimit Dhir, Regulatory and ComplianceHow are geopolitical tensions influencing distribution strategies for mobile, console, andcloud gaming platforms in 2026?What lessons can gaming companies take from recent CFIUS (Committee on ForeignInvestment in the United States) trends when planning cross-border M&A deals, jointventures, or strategic data-sharing partnerships?INTERNATIONAL AFFAIRSWILSON SONSINI | THE SCRAMBLE 2026 20INDUSTRY INSIGHTWILSON SONSINI | THE SCRAMBLE 2026 21Tariffs and Chip Export Bans: Emerging Challenges forthe Gaming Industry Under the Trump AdministrationUpdated January 27, 2026:On January 14, 2026, PresidentTrump issued a new proclamationimposing an additional 25 percentad valorem tariff on the import ofcertain advanced semiconductorarticles, effective as of January 15,2026. The tariff applies to specificsemiconductors within certainperformance parameters, oftenused in AI applications, but exemptsimports used for U.S. data centers,research and development, repairor replacement, start-ups, nondata center consumer applications,non-data center civil industrialapplications, public sector usesand other uses strengthening theU.S. technology supply chain ordomestic manufacturing capacityfor derivates of semiconductorsas determined by the Secretary ofCommerce, in each case as specifiedin the annex to the proclamation.The proclamation also directs theSecretary of Commerce and U.S. TradeRepresentative to pursue negotiationswith foreign jurisdictions to addressU.S. national security concerns relatedto the imported of semiconductors,semiconductor manufacturingequipment, and derivative products.The administration has signaledit may impose broader tariffs onimports of these and similar productsin the near future, and that it mayalso consider implementing a tariffoffset program to spur the domesticmanufacture of these commodities.This development adds another layerof complexity to the gaming industry’ssupply chain challenges, as advancedchips are critical components ingaming hardware and AI-poweredgame development.Please see below for a summary of theclient alert we published on April 24,2025:The global video game industry withover $200 billion value thrives oncutting-edge hardware and innovativegaming content. However, recenttrade policies introduced by the Trumpadministration in 2025, including newtariffs on Chinese, Canadian, andMexican imports in February andMarch 2025; the recent imposition ofan additional global baseline tariff forimports from almost all countries andsteep additional “reciprocal” tariffson select U.S. trading partners in April2025; and still further increases in thereciprocal tariff for China alongsidea temporary reversion to the baselinetariff for other U.S. trading partnerslater in April; along with consistentlytightening restrictions on advancedchip exports to China, pose significantchallenges to the game industry’sfurther growth. Additionally, theFramework for Artificial IntelligenceDiffusion (the “AI Diffusion Rule”), mayfurther complicate the landscapeby extending the export controlson advanced computing chips andAI model weights to safeguard U.S.national security and foreign policyinterests. This alert analyzes thesepolicies’ implications for hardwareproduction, physical game sales,and gaming collaborations betweenAmerican and Chinese gamedevelopers.By Bryan PoellotINTERNATIONAL AFFAIRS Learn MoreWILSON SONSINI | THE SCRAMBLE 2026 22INDUSTRY INSIGHTHow are licensing deals between game publishers and majorentertainment IP (e.g., films, sports leagues, influences) evolving ascross-media collaborations become more common?While major film or sports IP once ensured a player base, the data from 2025shows that traditional discovery of games is being eclipsed by the creatoreconomy. Statistics indicate that over 24 percent of players now find newgames through influencers,11 while nearly 81 percent of gamers use YouTube astheir primary hub for game-related decisions.12Despite the power of a famous IP, the market has become increasingly intolerant of layeringa brand over a lackluster product. Gamers today are incredibly discerning. If the gamingexperience is not rock-solid, even the biggest IP will fail to drive sales. Before layering on afamous film or sports franchise, developers must ensure the game design is compelling andthe fundamental fun of the experience is intact.Studios are increasingly moving toward fine-tuning models exclusively on a partner’sproprietary IP assets. Even as this technology advances, the fundamental element of gamedesign remains an essential pillar that IP and generative AI cannot replace. However, whenthe fundamental game design is in place, generative AI transforms from a development toolinto a commercial multiplier. This allows for a deeper level of cross-media collaborationwhere the game can generate endless, legally defensible derivative content that staysperfectly “on-brand.”- Atussa Simon, Technology TransactionsWhat patterns are emerging in right-of-publicity and likeness-rightscases involving esports pros, influences, and AI-generated avatars, andhow should sponsorship and licensing agreements be updated in response?States laws are being broadened to explicitly cover AI digital replicas andto limit the use of vague contractual terms to enable use of a person’sdigital replica. Sponsorship and license agreements should be tailoredto ensure enforceability and compliance with state laws, including by(among other things) i) broadly and specifically defining personal rightswhere appropriate (e.g., digital likeness, synthetic voice, distinctive mannerisms); and ii)employing an AI-specific grant of publicity and likeness rights. Notably, state law in somecases can render an individual’s grant of rights to a digital replica invalid if the personwas not represented by counsel or an applicable labor union, so it may be important tohave the individual warrant in the agreement that he has been represented.- Aaron Hendelman, LitigationLICENSING AND COLLABORATIONWILSON SONSINI | THE SCRAMBLE 2026 22INDUSTRY INSIGHTWe are in the early days of AI, so agreements need to be flexible to addressevolutions in the capability of AI and changes to regulatory frameworks.There are a few key issues that contracts will need to address, includingallocation of IP (and in particular allocation of rights to AI-generatedcontent), exclusivities, marketing rights, and financial terms. With respectto gamer-facing contracts, clarity and specificity are extremely important, as are dataprivacy terms (particularly for games that minors will play). Finally, for partnershipagreements with streamers, consider whether “moral turpitude” clauses or takedown rightsare necessary to protect the company from bad acts by partners.The successful games of 2026 will be those that build a high-quality foundation first,then use AI to seamlessly weave famous IP and influencer-led content into the experience.This strategy not only drives player discovery but significantly boosts studio valuations.By proving that a game can thrive as a persistent, evolving media platform rather thana static release, developers can command valuation multiples that are higher thantraditional competitors.- Barath Chari, Technology TransactionsGiven the prevalence of in-game transactions, streaming deals, andAI-driven content, what best practices should companies adopt in userterms, developer-publisher contracts, and partner agreements?LICENSING AND COLLABORATIONWILSON SONSINI | THE SCRAMBLE 2026 23Wilson Sonsini is a top legal services provider for console/PCdeals and has represented over half of the top 20 console/PCtransactions in the past five years.8WILSON SONSINI | THE SCRAMBLE 2026 24INDUSTRY INSIGHTWILSON SONSINI | THE SCRAMBLE 2026The primary barrierto mainstream XRadoption has beenthe friction of “clunky”hardware that breaksimmersion. Historically, gaming inextended reality has been definedby heavy headsets tethered by longcables and confined to small, staticspaces. This physical tetheringconstantly reminds the player of thereality they are trying to escape.Furthermore, legacy controllersoften lack the novelty and naturalinteraction required for true presence.The bridge to a “jacked-in” futurelies in the transition from bulkygoggles to streamlined, lightweightsmart glasses and auxiliaryinterfaces. Before we reach theera of direct neural interfaces, thelogical evolutionary step is the massadoption of hardware that doesn’tdisrupt the user’s experience. In2026, we are seeing a shift towardhigh-fidelity smart glasses thatoffer 240Hz refresh rates andcinematic visuals without the weight.Complemented by haptic glovesand non-invasive wearables, thesetools allow players to step intonew realities with a level of naturalinteraction that was previouslyimpossible.13In addition to entertainment, thenext generation of XR is creating anunexpected and vital connectionto the real world for people withdifferentiated abilities. Gaminghas a long legacy of pioneeringaccessibility, and these newlightweight tools are expandingthat mission into everyday life. Forexample, modern XR glasses haveopened a new world for the deafand hard-of-hearing community byproviding real-time, line-of-sightsubtitles for every conversation.By integrating AI-driven transcriptionand translation directly intoa wearable form factor, XR istransforming a gaming tool into alife-changing utility. These glassesallow users to stay engaged with theirphysical environment while receivinga constant stream of visual datathat compensates for hearing loss.This nature of the hardware, as botha portal for immersive gaming anda bridge for social accessibility, is akey driver in pushing XR from a nichegaming hobby into a mainstreamnecessity.The transition to immersive gamingbrings significant questions regardingthe privacy of spatial maps, roomscans, and object recognition data.As these XR games rely on “alwayson” cameras and sensors to mapa player’s physical environment,they generate highly granular dataabout a user’s home. While thesetechnical privacy challenges areoften left to legal and regulatoryexperts, there is also a criticalphysical safety component. Immersiveexperiences carry the risk of usersinjuring themselves or others orunintentionally destroyingproperty when the boundary betweenthe virtual and physical is blurred.Overcoming legal and social pitfalls isultimately a challenge for developersrather than for lawyers. While existinglegal frameworks for liability andnegligence apply, the most effective”defense” is technological. Developersmust continue to innovate by buildingsafety directly into the experience. Bycreating safer by design experiences,the industry can avoid the legalfriction that often stalls the adoptionof transformative new technologies.- Atussa Simon, Technology Transactions
