Event: on December 24, 2001, Zhejiang Century Huatong Group Co.Ltd(002602) issued an announcement on the final judgment result of legend IP, and the Supreme Court rejected the judgment of entertainment virtue and legend IP of Co., Ltd. requesting to confirm the lawsuit request of lansha information, a wholly-owned subsidiary of Zhejiang Century Huatong Group Co.Ltd(002602) and yatos on the invalidity of the renewal agreement of Legend game.
The copyright dispute over the classic game IP legend has a long history. Legend was launched by yatos, a Korean company, and jointly owns the copyright with entertainment virtue, a Korean company. In 2001, Shengqu game (formerly Shanda game) signed the software license agreement with yatos to obtain the management right of legend PC client game in China for us $300000, and enjoy the exclusive rights of Legend game, including operation right, adaptation right, modification right, etc. according to law; in 2002, the supplementary agreement was signed to add entertainment virtue to the software license agreement The co authorizer of the; In 2004, Shengqu game acquired yatos; After three renewals in 2003, 2005 and 2008, the software license agreement was extended until September 17. Since 16, Shengqu game has been authorized to perform IP deduction such as mobile games and page games. On June 30, 17, yatos and Shengqu game signed the renewal agreement to extend the software license agreement to September 28, 25. Entertainment virtue considered that the renewal agreement was invalid and subsequently filed a lawsuit and arbitration. Since then, the two sides have had several rounds of mutual litigation. In January 21, the second instance of the Central District Court of Seoul, South Korea, decided not to accept the request of legend IP of entertainment virtue and Co., Ltd. for the invalidity of the renewal agreement.
The rights and interests such as IP exclusive authorization and adaptation right of Shengqu legend have finally been settled, and there are laws to protect rights. The Supreme Court final ruling ruled that the game of interest enjoyed the exclusive rights of the legendary games in Chinese mainland, the right to adapt and so on. Entertainment virtue Co., Ltd Legend IP (a company established by entertainment virtue in South Korea in 2017). It has fundamentally consolidated the rights protection basis of lansha information and yatos against the illegal authorization of entertainment virtue and legendary IP of Zhushi Co., Ltd. the company will further terminate the illegal authorization chaos of entertainment virtue and legendary IP of Zhushi Co., Ltd. in China in law and practice. After 20 years of operation and promotion , legend has become one of the most influential network culture IP in the Chinese market. According to Gamma data, in the past 20 years, the overall IP value of legend has exceeded 100 billion, created more than 90 billion yuan of water, and accumulated more than 600 million registered users. The final judgment of the supreme law on the effectiveness of the renewal agreement related to Legend game has a positive impact on the profits of Zhejiang Century Huatong Group Co.Ltd(002602) this period or later, and the disputes and uncertainty of legend IP in China’s judicial field are expected to be further reduced.
Overweight diversified legendary IP operation is expected to thicken the company’s profits in the future. The company’s self-developed meta universe game “livetopia” has become a phenomenal game on the roblox platform of the world’s largest meta universe community. In addition to livetopia, the company also plans to build legend, which has many developers and 600 million + users, into a meta universe community. The final judgment of the Supreme Court on the validity of the renewal agreement related to Legend game may have a positive impact on the company’s profits in the current period or later. The company is expected to be more stable in the future and hold and operate legend IP in the Chinese market for a long time.
Shengqu Xinyou has a strong performance and steadily expanded its overseas territory. Within 21 years, the new tour “Xiaosen life” and “school idol season: stars shining” won the first place in the Appstore free list on the first day of their launch; “Ancient scroll: Blade” topped the IOS free list on the first day of its launch; The legend of Tomb Raider: lost track has maintained a 9.1 taptap score so far; “Sword net 1: return” is the top three in the IOS free list on the first day of its launch. In terms of old tour, many classic products intensively launched anniversary versions, thickening the company’s performance. In the nostalgic edition of the tower of eternity in July, the daily running water and daily life both set the highest record in 19 years; “Legend of blood” launched its 21st anniversary version, with multi terminal interoperability and innovative playing methods to continue the long life cycle of the game. Overseas, “king of Avalon” and “era of muskets” have been online for more than 4 years, ranking among the top 30 in the overseas revenue list of Chinese mobile games. In terms of self-study, “Feifei adventure” (April 14) was launched in the United States, Germany, Britain, France and other countries, with a revenue of US $10.7 million in October of 21 years, QoQ + 29.3%, which is by far the highest revenue of sea simulated mobile tourism.
Investment suggestion: benefiting from the final judgment of the supreme law, the company is expected to operate legend IP for a long time in the future; The company continues to deepen its long-term cooperative relationship with Tencent in games, channels, cloud services and IDC, which helps to enhance the stability of the company’s long-term performance. In the follow-up, we will pay attention to the IP related new tour of legend, the yuanuniverse community of legend, Tencent’s only generation of Qingnian and legend world, and the authorized distribution of Tencent games will bring increased profits in the future.
Risk tip: the online time of Xinyou is less than expected; Intensified market competition; Macroeconomic impact; There is uncertainty risk in the performance of framework agreement
