Video games have come a long way from the days of arcades, joysticks and blowing into cartridges to fix the game. It's an industry now worth more than $120 billion a year and greatly surpasses the movie and music industries among the most popular forms of public entertainment worldwide.

Today's video games are complex, interactive works of cinematographic art that, although guided by major studios, the players themselves get to direct. Jeff Goldblum, Mark Hamill, Kristen Bell, Martin Sheen, Norman Reedus and Kit Harrington are only some of the actors on a growing list of celebrities who have starring roles in video games, sometimes even playing characters who look like themselves.

In addition to the game characters that are created by the production studio, most games now also enable players to create their own character (also known as an avatar). With thousands of variations in skin color, body type, hair and facial features available for personalization, an avatar can mirror a gamer's own look or can be a product of their imagination. The processing power of these games has improved so that these characters look almost realistic, making it difficult to discern if a particular scene of a game is animated or filmed.

However, it is important to remember that whether the game character looks like a celebrity or not, the rights of publicity protect both the famous and the pedestrian just like in traditional forms of entertainment. If someone's name, likeness, catchphrases, or even dance moves have been used in a video game without proper approval, there's a chance their publicity rights were violated.

Recent lawsuits have grappled with the fair use of one's likeness in video games, attempting to apply established order to a changing field. Every state has its own regulations intended to protect someone's likeness, voice and image. In Texas, a common law right of publicity known as "misappropriation of name or likeness" exists only for the living, with a separate statutory right of publicity law for the deceased.

This is based on the Restatement (Second) of Torts, § 652C, which states that one who appropriates for his or her own use or benefit the name or likeness of another is subject to liability to the other for invasion of their publicity rights. The 1994 case Matthews v. Wozencraft further sets forth the elements of a misappropriation of likeness claim in Texas: (1) defendant appropriated plaintiff's name or likeness for value, and not in an incidental manner or for a merely newsworthy purpose; (2) plaintiff can be identified in defendant's publication; and (3) there was some advantage or benefit to defendant.

In February 2019, a fascinating case was filed in the United States Eastern District Court in Texas by professional wrestler Booker T. Huffman against several video games companies that produce the highly successful Call of Duty games.

Huffman created a comic book series in 2015 called "G.I. Bro" based on Huffman's likeness, wrestling character and personal experiences. Huffman alleges that G.I. Bro's likeness (which is Huffman's own likeness) and backstory form the basis of a very similar character "Prophet" in the 2018 video game Call of Duty: Black Ops 4. Black Ops 4 (which sold over $500 million worth of copies in just the first three days of release), and Huffman believes some of that success must be attributed to his creation, based on his likeness. This case not only involves copyright violations but potentially rights of publicity. Though Huffman's live pleadings do not yet allege misappropriation of name or likeness, they may amend, expanding this beyond an old-fashioned copyright dispute.

We veer even further from established law when discussing not only the appearances of simulated celebrities, but also the unique avatar creations of players. Does a gamer hold rights to the unique, fictional avatars they create using the gaming software? Does a gamer have the same right to their creations as someone who makes art with LEGOs?

Gamers create avatars and names that may be their own intellectual property. There are even online marketplaces where gamers trade self-created avatars and virtual real estate. For example, self-made millionaire Jon Jacobs (his gamer name is "NEVERDIE"), purchased a virtual nightclub in the online game Entropia Universe for $100,000, which he later sold for $635,000, but not before making $200,000-$250,000 a year from other gamers who paid to visit the virtual nightclub. As depicted in Ernest Cline's Ready Player One, virtual marketplaces hold the potential for new economies dedicated to entirely intangible goods. This will be a new area of law to navigate, but a recent case in China is important to note.

In September 2019, a Chinese citizen, Lu Mou, sued his friend, Li Mouscheng, for selling Lu's self-created avatar for drastically below market value. Lu spent over $1.4 million USD developing his avatar for the popular game Justice Online. Without Lu's permission, Li sold the personalized avatar on a virtual goods marketplace for only 3,888 yuan (around $550 USD). The judge in the case ordered the return of the avatar to Lu, awarding the purchaser 90,000 yuan (around $810 USD) in damages, indicating not only the court's recognition of the value of a player-created avatar, but also the legal ownership of intangible intellectual property.

Truly the world — or more accurately, the worlds — are changing. As the processing power, resolution, and frame rates of personal computers and gaming platforms increase, the lines between the real world and the gaming world will continue to blur.

Much like the fears of "DeepFake" videos, the increasing ability of video games to create realistic portrayals opens up the potential for abuse. And the growing palette available through virtual creation tools will also result in an explosion of creative content that may have value outside of the host game. As we all learn to navigate this new world of created realities, we must keep in mind the very real consequences, and the very real currency that may be exchanged – or lost – as a result.

Andrea Perez is a senior associate at Carrington, Coleman, Sloman & Blumenthal and an adjunct professor at Southern Methodist University, teaching International Law and the Arts. Perez concentrates her practice in the fields of art law, intellectual property, and business law.