Upper Deck Entertainment vs. Konami

This is my take on the conflict between Konami and Upper Deck Entertainment (UDE) that is currently upsetting the Yu-Gi-Oh! Trading Card Game community. While I don’t play Yu-Gi-Oh! myself, as a Magic: The Gathering judge I have a certain interest in what happens in the industry overall. Oh, and I like soap operas. All information presented is scrounged from various sources around the net, including press releases by the companies, statements from employees, and court documents (or copies thereof provided in forums). Mixed in is my own opinion and assumptions, so don’t take anything in this article for granted.

This is what I think happened so far:

Konami is the producer of the Yu-Gi-Oh! Trading Card Game and owner of the rights to it. Upper Deck Entertainment is the distributor of the game in Europe and the US. UDE also handled Organized Play (OP) for the game in these territories. The distribution contract ended at the end of 2007, but there was a mutual agreement (either verbal or in the form of a Letter of Intent) between both companies that the contract was to be renewed for 2008 through 2010. There was no formal contract, though, so the companies just kept on going. (And I thought those were serious businesses …)

UDE was unhappy with the way Konami handled the game and how they were supported by Konami. So they took more and more liberties with how they ran the game. This reached a climax when in the summer of 2008 UDE manufactured copies (or “counterfeits” as Konami calls them) of special Yu-Gi-Oh! promotional cards and provided them to Vintage Sports Cards, who packaged them with three boosters and sold those packs in Toys-R-Us stores. Konami found out about the counterfeits and sued Vintage Sports Cards. When they found out that UDE had provided the cards, they allegedly asked UDE for clarification. When were giving insufficient information and threatened Konami with a breach of contract suit, Konami amended their suit at the end of 2008 to include UDE as a defendant. But before they could do so, UDE counter-sued on December, 12th 2008.

This led to the well-known exchange of press releases. (December, 11th 2008, Konami: “We’re taking over the distribution of Yu-Gi-Oh!“; December, 16th 2008, UDE: “Not true!“; December, 17th 2008, Konami: Yes, true!) At December 22th UDE wins an injunction against Konami in Europe that voids the cancellation of the contract. And a few days later the same happens in the US.

So, this year both companies are flexing their muscles and the background of the story became known. The main lawsuits are still pending, so it will stay interesting. In the long term it’s obvious that UDE will lose any distribution rights to the Yu-Gi-Oh! TCG, so all their bets are now on various World of Warcraft products. I am not sure what that means for Upperdeck’s OP department. I know that I will keep a watchful eye on further developments.