M&A and investment in the game sector Realising investments and acquiring game businesses clauses can cause uncertainty dates (often the result of ‘crunch around rights to the underlying culture’), the rise of video game intellectual property and how it unions, and general office culture. can be used post-deal. Given the financial and reputational Contracts governing how the consequences of failing to address business accesses critical these challenges, prudent buyers technologies will also need to be and investors will want to reviewed in detail. Big platforms understand any risks early in and publishers often have licence the diligence process. agreements with smaller game In most cases, employees will also studios, allowing them to use have been granted options as part development kits and/or to gain of their incentivisation package. access to their platform. Such These might include vesting and licences tend to be broadly drafted acceleration provisions, and the and need to be reviewed carefully usual process is for all options to in the event of a sale or investment, be exercised immediately before for example, for change of control completion of an M&A sale. clauses (which may allow the This will be a key area of due platform to terminate the licence). diligence for a buyer. Advice will be For more information on intellectual needed to make sure any option property protection see our grants have been carried out Protecting games – IP issues section roerl and that the business is in full compliance to ensure both Employees the employees and the business Employment rights and working achieve the planned tax treatment. culture are increasingly under the There can be many challenges to spotlight in the industry. Issues and optimising share option schemes developments here include: unpaid at the point of exit depending overtime in the run up to release on the jurisdiction of the target. 23