Recently, Tianyancha showed that Guangzhou Volcano Lake Information Technology Co., Ltd. was ordered to pay 30,000 yuan in compensation to Mihoyo for infringing the copyright of Shanghai Mihoyo Tianming Technology Co., Ltd. Guangzhou Volcano Lake Information Technology Co., Ltd. is a wholly-owned subsidiary of Guangzhou Sanqi Network Technology Co., Ltd. The “Cloud City Song” in the case is an MMO game under Sanqi Interactive Entertainment, which has performed well in overseas markets. On August 2, Tianyancha App showed that the first-instance legal documents on copyright ownership and infringement disputes between Shanghai Mihoyo Tianming Technology Co., Ltd. and Guangzhou Volcano Lake Information Technology Co., Ltd., Guangzhou Sanqi Network Technology Co., Ltd., and Jiangsu Jiaqu Network Technology Co., Ltd. were made public.
Mihoyo discovered that the WeChat Moments advertisements placed by the WeChat public account operated by Volcano Lake Company arbitrarily tampered with and used the pictures of Mihoyo’s “Genshin Impact” promotional picture “The Knights of Favonius”, guiding users to enter the AppStore to download and install the game “Cloud City Song-Legend of the Brave”. Mihoyo believes that Sanqi Network Company and Jiaqu Network Company jointly operate the game. The advertisements involved in the case seriously infringed the plaintiff’s copyright, and at the same time confused the relationship between the game “Song of Cloud City-Legend of the Brave” and “Original God” and the plaintiff, misleading consumers. The advertisements involved in the case brought additional downloads to the game “Song of Cloud City-Legend of the Brave”, and the three defendants obtained unfair benefits from this. The actions of the three defendants obviously violated the principle of good faith and basic business ethics, and constituted unfair competition.
The court held that the defendant Volcano Lake Company published pictures that were substantially similar to the plaintiff’s works on the public account it operated, infringing the information network dissemination rights of the plaintiff’s works; at the same time, the defendant’s infringement caused confusion to senior players, who mistakenly believed that “Original God” was related to “Song of Cloud City”, and the company’s business scope overlapped with the plaintiff, constituting unfair competition. The defendant Jiaqu Network Company is the operator of “37 Mobile Game Club”, and it currently also operates the game “Song of Cloud City”, but the plaintiff Mihayou did not provide evidence of its participation in advertising, so the court did not support the plaintiff’s claim that the above two defendants Sanqi Network and Jiaqu Network and the defendant Volcano Lake Company jointly constituted unfair competition.
In the end, the court ruled that the defendant Volcano Lake Company should compensate the plaintiff Mihoyo Company for 30,000 yuan. Tianyancha shows that Guangzhou Volcano Lake Information Technology Co., Ltd. is a wholly-owned subsidiary of Guangzhou Sanqi Network Technology Co., Ltd., which is jointly held by Sanqi Interactive Entertainment (Shanghai) Technology Co., Ltd. and Sanqi Interactive Entertainment Network Technology Group Co., Ltd. Sanqi Interactive Entertainment reported good results in the first half of the year, and its overseas business has developed rapidly. From January to June 2022, Sanqi Interactive Entertainment expects its net profit attributable to shareholders of listed companies to be 1.6 billion yuan to 1.7 billion yuan, an increase of 87.42% to 99.13% year-on-year, and its net profit after deducting non-recurring gains and losses is 1.55 billion yuan to 1.65 billion yuan, an increase of 143.13% to 158.81% year-on-year. The development of Sanqi Interactive Entertainment’s overseas business has accelerated again. Many games such as “Douluo Continent: Soul Master Duel”, “Puzzles & Survival”, “Call Me the Big Shopkeeper”, and “Song of Cloud City” released for the global market have performed well. During the reporting period, the company’s overseas market operating income is expected to increase by more than 40% year-on-year, and the proportion of the company’s overseas operating income continues to increase. In April 2022, Sanqi Interactive Entertainment ranked second in the overseas revenue list of Chinese game manufacturers. According to the data from the Sensor Tower store intelligence platform in April, “Song of Cloud City” performed well in the Japanese and Korean markets, and its overseas revenue ranking rose by 3 places to 11th. South Korea is still the market with the highest revenue for the game, accounting for 47.9% of the overseas revenue this month, and the Japanese market accounts for 31.7%. It is reported that the monthly turnover of the game reached more than 300 million that month, of which the monthly income in the Korean market exceeded 100 million, and the turnover in the Japanese market in 30 days was about 60 million. In addition, the zombie-themed “three-elimination + SLG” mobile game “Puzzles & Survival” has been launched in the global market since 2020, and the product is still in the top 50 of the iOS best-selling list in 16 game markets around the world. Previously, Sanqi Interactive Entertainment’s financial report showed that as of the end of 2021, the cumulative turnover of the product had exceeded 2.5 billion yuan.