Lionsgate announce AI video deal with Runway

+ an exclusive treat for subscribers, as well as Epic Games announcing the launch of Fab & Nintendo and Pokemon are taking Palworld to court.

Author

John Grabowski
September 24, 2024

We interrupt this SEG3 Report with an exclusive…

SEG3 LA is BACK! 🇺🇸

Returning stateside to Beverly Hills on 11th December, SEG3 LA will again offer unrivalled opportunities for you to connect with and learn alongside like-minded individuals that are leading digital innovation at the globe's most recognisable sports, entertainment, gaming, consumer & emerging technology brands.

As a thank you for tuning into the report each week, we’re giving you our subscribers a 24 hour headstart on everyone else to lock in your spot.

Passes are complimentary for this one, but with spaces limited to just 200 and our last show in February sold out & well over-subscribed, you’ll need to be quick to claim your seat.

And shhhh, we’re not telling everyone else until tomorrow! 😉

Now, onto Edition #28 of the report!

Everyone is clearly back from their summer vacations, because the news in the SEG3 World keeps coming thick and fast! Be sure to check out the other stories this week for loads of great stories and updates we failed to cover.

This week, Lionsgate announce AI video deal with Runway hot on the heals of the California Gov. signing a deal aimed to protect Hollywood from AI. Epic Games announce the launch of Fab; the culmination of a well considered series of acquisition. And Nintendo & Pokemon are taking Palworld to court - “Pokemon with guns”, indeed!

Contents: Edition #28

Let’s get into it…

Epic Games announce "Fab" Content Marketplace is Launching in October

Epic Games announced the upcoming launch of Fab, a unified content marketplace set to debut in mid-October, which will replace Unreal Engine Marketplace, Sketchfab Store, and Quixel.com while integrating assets from ArtStation Marketplace by 2025. Fab will serve as a multi-platform marketplace where creators can buy, sell, and share digital assets across various industries and tools like Unreal Engine, Unity, Blender, Maya, and more. It offers an 88/12 revenue split favoring creators, allowing them to build sustainable businesses. The platform also promotes transparency regarding AI usage and will feature a temporary 100% revenue share on sales of Fab Standard-licensed products until the end of 2024. Additionally, it is partnering with Adobe for a launch promotion offering a six-month free subscription to Adobe Substance tools for certain users.

The platform aims to offer a range of advanced features, including multi-engine support, real-time 3D viewing tools, and robust search and licensing options, catering to both personal and professional use. Sketchfab's licensable content will begin transitioning to Fab, while Quixel Megascans will move to Fab by 2025, with the platform eventually introducing paid access to most Megascans assets. Unreal Engine Marketplace users are encouraged to migrate their products to Fab, where they will benefit from expanded file formats, real-time 3D previews, and new licensing options. Users of existing platforms like Unreal Engine Marketplace, Sketchfab, and Quixel will retain access to previously purchased or acquired content.

ArtStation Marketplace, which focuses on showcasing portfolios and career networking, will remain active until 2025 when its assets are migrated to Fab. Epic Games will gradually introduce migration tools for these communities and plans to enhance Fab with features like support for Minecraft, Roblox assets, and MetaHumans, along with improved analytics and product review systems. Through Fab, Epic Games aims to create a comprehensive, industry-wide platform for digital content creators.

Why You Should Care

This is major news for all 3D content creators.

What? You don't create 3D content, you say? Well, perhaps that’s because the tools to create 3D assets have been too technically challenging for you to access. Epic Games is aiming to change that with the release of Fab.

Let’s review the blueprint of this rollout:

First, Epic acquired Quixel (makers of Quixel Bridge) and Sketchfab to gain control of some of the largest community and content hubs for 3D assets. They also brought in ArtStation, another community hub where creatives share their 3D, VFX, and graphic work online.

Second, they announced plans to consolidate these platforms into a single marketplace where creatives, developers, and 3D artists can buy and sell 3D assets (typically FBX files).

Now, they’re preparing for launch, with SEG3 LA alumni Craig Laliberte leading the charge. However, the demand for this platform will initially be limited to a specific set of users until 3D content creation becomes as mainstream as photo or video editing.

Fab hopes to do for 3D content what YouTube did for video—become a two-sided marketplace where creators share their work and consume other assets for inspiration and support.

Epic is sweetening the deal by offering creators 100% of the revenue from any asset sales until the end of the year and maintaining a favourable revenue share beyond that.

So, Bravo to Epic! We all love to see a well executed acquisition strategy! Only time will tell if this strategy will make 3D storytelling more mainstream, but it’s clearly a well-considered plan.

Lionsgate partners with AI firm Runway

Lionsgate signed a deal with the AI research firm Runway, allowing access to its vast film and TV library to train a new generative AI model. This model will be customized to fit Lionsgate’s portfolio, which includes popular franchises like John Wick, Saw, and The Hunger Games. The collaboration aims to help filmmakers and creatives by augmenting their work through AI technology. Lionsgate’s vice-chair, Michael Burns, views AI as a tool to enhance both pre-production and post-production processes, stating that it will lead to significant cost savings.

The AI technology from Runway will be used for tasks like storyboarding, creating background scenery, and handling special effects, helping filmmakers streamline the production process.

This partnership arrives at a crucial time for Lionsgate, as the studio has recently faced financial difficulties, including underwhelming box office performances from films like The Crow reboot and Borderlands, the latter of which is estimated to lose between $20 million and $30 million.

The announcement coincides with California Governor Gavin Newsom signing two new bills restricting AI replicas of performers, in response to growing concerns about AI's impact on the entertainment industry. Additionally, the Archival Producers Alliance released guidelines to ensure the ethical use of AI in documentary filmmaking, stressing the importance of understanding AI’s potential effects on nonfiction storytelling in an era where distinguishing between real and AI-generated content is becoming increasingly challenging.

Why you should care?

This is the first major collaboration between a major film studio and an AI company, potentially setting a precedent for future partnerships in the entertainment industry.

Runway, and other AI model’s like it, aim to assist filmmakers in various aspects of production, including storyboarding, background creation, and special effects, significantly change how films are made and potentially reduce production costs. As such, Lionsgate expects to save "millions and millions of dollars" through this partnership, which could influence other studios to pursue similar AI collaborations.

Naturally, the deal has sparked debate about AI's role in creative industries, with some worried about job displacement and the potential homogenization of content.

The announcement is nice W for Runway at a time it is facing legal challenges related to copyright infringement, highlighting the complex legal landscape surrounding AI in creative fields.

This Image: Nintendo / Pocketpair / Kotaku image is too apt.

Nintendo have filed a lawsuit against the developer of Palworld

Nintendo and The Pokémon Company have filed a lawsuit against Pocketpair, the developer of Palworld. The lawsuit accuses Pocketpair of patent infringement, though the exact details of the infringement are yet to be revealed. Palworld gained attention for its mechanics, which many noted were similar to Pokémon's, especially regarding capturing creatures. Pocketpair expressed frustration, stating they had not been notified about the specific patents they are accused of violating, and the legal battle would divert their focus from game development.

The core of the lawsuit likely revolves around a specific Pokémon game mechanic involving capturing creatures by throwing spherical objects, covered by a patent Nintendo filed in 2021. While Palworld is similar to Pokémon, Nintendo appears to be targeting gameplay mechanics rather than creature designs. Experts suggest this strategy aims to protect Nintendo’s intellectual property, with potential legal implications for other companies using similar mechanics in future games. The case follows previous instances where Nintendo aggressively protected its patents, such as its 2017 lawsuit against Colopl.

Industry analysts believe Pocketpair may struggle to win the case, given Nintendo’s history of successful legal action.

Why you should care

When we first covered this story, referencing the close comparisons between Palworld characters and Pokemon, their may have been a thought that the lawsuit could focus on the IP of the characters. However, Nintendo appear to be going in a slightly different direction.

Pure gameplay mechanics are generally considered ideas rather than expression, making them difficult to protect under copyright law alone, but there is plenty of precedent here…

Atari v. Oman (1992): While not a direct lawsuit against another developer, this case established that video game gameplay and mechanics could potentially be protected by copyright. The court ruled that Atari's Breakout game contained enough creativity in its gameplay to warrant copyright protection. The story of Breakout is also noteworthy as it was created for Atari by a certain Jobs and Wozniak. 

Capcom v. Koei Tecmo (2014-2019): Capcom sued Koei Tecmo for patent infringement related to gameplay mechanics in their Dynasty Warriors and Samurai Warriors games. The case involved two patents covering loading game content and controller vibration features. In 2019, a Japanese court ruled in Capcom's favor, awarding them $1.5 million in damages

The timing of the lawsuit coincides with the Tokyo Game Show, where Pocketpair was expected to announce a PlayStation 5 version of Palworld. Some speculate that Nintendo’s move might financially hurt Pocketpair, which had reached 19 million players with Palworld. So far, Nintendo has remained tight-lipped on the specifics of the lawsuit, stating only that it was filed after thorough investigation

In other news this week…

A quick round-up of other stories you should be across from the past 7 days:

Working on anything cool, or have a press release you would like us to cover? Send it in for the chance for it to be covered in next week’s edition!

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