There's an eye-opening moment in Episode 27 of Double Fine's incredibly candid Psychonauts 2 documentary that demonstrates the reality of making video games under corporate ownership.
The studio, fresh off the back of being acquired by Microsoft in 2019, is visited by then Xbox Game Studios head Matt Booty for an introductory Q&A. During that conversation, Booty explains a number of employees have asked him to address how the deal will affect their ability to work on side projects in their own time (behavior referred to by Booty as "moonlighting"). In a bid to quell those fears, Booty states employees should only become concerned if they work on something that "directly competes with or conflicts with what happens here."
"That really is going to boil down to making a game." adds Booty. "[...] The reality is, once something is inside these walls, Double Fine owns it."
That might seem reasonable, but there's a catch. Double Fine boss Tim Schafer explains the previously (and soon-to-be once again) independent studio regularly invites employees to showcase game projects built in their own time, on their personal devices, as part of a fortnightly pitching process. If the team feels an idea has potential, it might be officially picked up by the studio. If not, well, Double Fine won't claim ownership.
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Booty says that approach won't work under Microsoft. "It's a messy boundary," he suggests, because the Xbox maker might decide to revisit a rejected idea "some day down the road."
That documentary was released in 2023. Three years later, the issue blipped onto my radar again when unionizing workers at Wizards of the Coast claimed they were being subjected to side work clauses that feel "overly-broad."
"Current approval processes for side projects often receive blanket denials or go unanswered for long periods. Workers should be free to confidently engage in work clearly outside of scope. We should not fear legal retaliation from the company for work that is clearly our own," said union members in May 2026.
"This shouldn't be the norm. Some of these terms are restricted by state or federal law and aren't entirely enforceable, but the burden is placed entirely on workers to submit exemption requests or otherwise retain legal consultation in case of disputes. This is an undue burden and we believe WOTC can do significantly better here."
It got me wondering: How prevalent are prohibitive side work clauses within the video game industry, how do they actually impact workers, and what (if anything) can be done about them? One anonymous source with experience working at major triple-A studios told me clauses that restrict employees from working on personal projects are "everywhere" and often cut off multiple avenues of work—including those outside of their professional discipline.
"[Major companies] all demand you submit some kind of paperwork every time you want to work on a side project and give their lawyers the power to 'approve it.' 99 percent of the time they don't approve it, because they just don't want you working on it. It's not about protecting anything, they just don't want the headache of you working on anything else and any potential connection or complication that comes from that," they told me.
"[...] They are all overly-broad. Some of them are very specific that anything you do within the games industry—talks, panels, guest teaching classes, even mentoring for crying out loud—is all a conflict of interest and you can't do them. And these companies do not invest in any kind of personal employee growth, so this effectively prevents an individual from seeking to learn and grow in their career outside the workplace. It's so harmful."
In their view, restricting what employees can do out of hours only serves to torpedo morale and limit personal development. "I have been hunted down by HR reps, lawyers, and comms people before and it is a very bad feeling to know you're being policed in your off work hours," they added. Ultimately, they admit to working on extra-curricular projects without the permission or knowledge of their employer in order to make ends meet and expand their creative horizons—although none of those credits are public yet, for obvious reasons.
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"I would encourage any developer who's faced with such a clause to at least try to negotiate for either a removal, or a rewording for more precision"
Indie developer (and horse game consultant) Alice Ruppert explains similarly restrictive clauses were included in the full-time employment contracts presented to them by two companies. Yet, she was able to negotiate them away (with persistence) to continue working on a personal project.
"I've only had two full time jobs in games in my career, both contracts initially contained such a clause," she explains. "In both cases [I said] 'I'll come work for you but I want to continue working on a side project in my free time.' It was part of the conversation pretty much from the start. In either case, the contract still contained such a clause despite me already having requested an exception, so I had to point it out again and ask for its removal or adjustment."
In one instance, Ruppert succeeded in having the clause adjusted so it only covered the type of project relevant to her employer—PC-based party games using smartphones as controllers. In the second case, she asked her prospective employer to sign a 'Declaration of Outside Interests' where she outlined the activities she would be pursuing outside of her working hours and confirmed they would not negatively impact her job performance. It resulted in the relevant non-compete being removed from the final contract.
Although Ruppert managed to dispel or mitigate the side work clauses they encountered, she claims they were both "overly-broad in their initial wording."
"For the first job, it was initially something like 'any game you make in your free time belongs to the company' I'm paraphrasing again—it was proper legal wording, but I don't have the original contract on hand. After the adjustment [was made] to cover only the specific type of game made at the company, it was fine though," she adds.
Given her positive experienced negotiating those clauses away, Ruppert says she wouldn't be phased if she encountered one again and encourages her peers to speak out if they find themselves in a similar predicament.
"I would encourage any developer who's faced with such a clause to at least try to negotiate for either a removal, or a rewording for more precision. I realize that's easier said than done if you're not desperately in need of work, but I also think that since these contract conversations take place when the employer has already committed to you, there is a bit of leeway to at least ask for a clarification of the clause," she states.
Veteran art director and concept artist Louise Meijer-Åström had less success than Ruppert when pushing back against what she describes as "generically written clauses" that could be interpreted to restrict personal projects.
Despite plying her trade in Sweden, where she explains copyright law is very solid, Meijer-Åström says employers still push their luck when inserting side work clauses into contracts.
"When accepting a job I'd make it clear being allowed to do hobby projects was important to me, and I was assured I'd be allowed to do so as long as said project wasn't a one-to-one competitor to the game the studio was making nor interfered with any business partners of the studio. I would take upper management's word for it that as long as I was transparent and asked permission it was fine. Turns out it wasn’t," she explains.
"I never neglected my work and was constantly praised and promoted, while using weekends and evenings for random short term projects like Artstation's art challenges, illustrating scenes from roleplay sessions with friends, which all helped me to learn new tools and workflows. The issue at that studio started when I began posting more regularly online about one of my long-running world building projects, and the project picked up traction. I had specifically gotten a thumbs up to work on this project when first being employed, I also used this project for internal studio learning sessions where I gave those interested in participating a monthly assignment to be finished outside of work hours, with a predefined theme such as 'breaking down an art style' or 'how to ideate efficiently on an idea' using the workflows I’d picked up for my side project that I thought would be useful for the other teams. At this point I was one of the studio's art directors and also responsible for individual artists development and welfare, and thought what we were doing was great. Then I was told in passing that the CEO wasn't happy about me working on my hobby project."
Meijer-Åström says they immediately sought a meeting with that unnamed CEO to head off any misunderstandings. That meeting, she says, quickly became "uncomfortable" after she was told she wasn't being loyal to her employer. She subsequently attempted to obtain a written exception that clearly stated she would be allowed to pursue hobbyist activities that did not conflict with her work interests. That request was turned down.
"I had to pause my hobby art and refer any artist who wanted to do a project to speak directly to the CEO," she continues. "I also stopped doing the monthly internal learning sessions and where before in hiring interviews where I’d praised the studio and reassured artists this was a place where we encouraged their personal development and interests, I told them they’d need to speak to the CEO about it. I quit and went to work at a different studio not long after that."
Meijer-Åström no longer trusts employers to keep their word where side projects are concerned. She also feels that prohibiting creatives from pursuing their passions outside of the rigmarole of corporate rat race is self-defeating. If somebody has a thirst for knowledge, why stifle it?
"I’ve never had an artist under me neglect their studio work because of a hobby project, on the contrary, the people who were creative in their spare time were constantly my high performers and the ones being promoted due to their fast individual development," she adds.
"The law is pretty clear that these clauses are enforceable"
It's difficult to unpack the myriad of side work clauses workers might encounter within the game industry. Phrasing might differ from company to company to suit the nature of a specific role. Laws in different countries or regions could also impact how they're laid out. To dispel some of that confusion, I reached out to Wendy Stryker, a U.S. employment law specialist and partner at New York law firm Frankfurt Kurnit Klein & Selz PC, for more context.
According to Stryker, who agrees to provide context based on her experiences but stresses her thoughts do not constitute legal advice, employees who encounter a side work clause should strive to understand whether their personal projects can be clearly differentiated from what the company is employing them to do.
"I have to start from the fact that if it is the work that you do as part of your job, the law is pretty clear that these clauses are enforceable, right? Just because you do it at home, if it is part of what you do for the company and what the company does, the law is pretty clear that should belong to the company," she adds.
She acknowledges there is room for nuance. If you're employed by a studio to produce assets or code for a triple-A shooter, perhaps there would be room to work on a 2D platformer. Something in a completely different genre and market, which would make it more difficult to argue that you have perhaps used company tools and information (subconsciously or knowingly) to gain an advantage. Even so, it would still be wise for an employee to seek a written exception to cover themselves in the event a conflict arises.
Stryker reiterates that companies approach side work in different ways—but generally, within federal law, they restrict double dipping by taking jobs or undertaking personal projects within the "scope of your employment." Sometimes, she explains, it can be very easy to understand what falls outside of that boundary. If you're a finance director who wants to pen screenplays on the weekend, that likely wouldn't cause an issue. Yet, even then, some employers might still seek to take ownership if a particularly restrictive contract has been signed.
Depending on where you're plying your trade, local legislation—such as specific state laws in the United States—might offer more clarity or protections, so it's worth understanding how those can impact side work.
As you can probably tell, it's a messy situation underpinned by legal nuance and contractual subtleties that can vary wildly. As a result, Stryker feels it's best to simply be upfront with your employer about your own personal expectations to ensure—at the very least—you understand what sort of legal restrictions you'll be instructed to uphold if you sign on the dotted line.
"Disclose and get permission," she continues. "That's what you do if you want to make it crystal clear [what your expectations are around side projects]. I see plenty of companies that do draft their agreements that way, because they don't want people doing work when it's not clear that the company and the employee are on the same page about whether it's allowed or not."
She also, however, appreciates that in a world where video game workers are being laid off with carefree abandon, people might not have much—if any—leverage to deploy if a company chooses to be aggressive. In those instances, it's perhaps easy to understand why some developers simply choose to take on the risk of moonlighting under the cover of anonymity.
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