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Their off-time work is contractually owned by the company? Is this true for most game development companies?

It depends. If you live in California, you are protected by the California Code, section 2870.

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab...

It's a bit difficult to summarize, but basically something you do on your own time, without using any equipment supplied by your employer, that is not related to something your employer is planning on doing, and doesn't use any trade secrets, can be yours even if you are a salaried employee. The "trade secrets" clause is probably the hardest to meet, since it's easy to claim that something was a trade secret in retrospect. If you work for a megacorp, the "planning on doing" bit may be problematic as well.

You almost certainly cannot use these protections to work on games in your spare time if you are a game developer. But it can be helpful for working on unrelated projects, including open source ones. If you really want to do your own thing, contracting provides strong protections.

If you live in another state, you probably are bound by whatever pound-me-in-the-ass contract your employer drew up, which almost certainly assigns copyright and patent of everything you do to them.



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