Rapidly developing digital technologies can provide significant economic, cultural and social benefits – where would we have been during lockdown without video games and social media? But these new and developing technologies can also have unintended and potentially harmful consequences which the government is looking to understand and address.
On 12 September 2019, the Digital, Culture, Media and Sport Committee (Committee) published a report focusing on the issues arising from immersive and addictive technologies (Report). The Report also highlights the need for clarity and action from the government on potential online harms arising from the use of these technologies. The government published its official response to the Report (Response) on 8 June 2020. The Response directly addresses the concerns and recommendations of the Committee. The key points set out in the Response are as follows:
'Gaming disorder' is a relatively new area of understanding; very little is known about what sort of games or game mechanics are more or less associated with levels of harmful gaming. The Report highlights that there are a minority of players who experience significant challenges related to gaming, such as struggling to maintain control over how much they are playing and disordered spending, particularly through 'microtransactions' – small payments that players make throughout the process of playing a game, for example to acquire in-game skills or items. The Report includes several Committee recommendations related to video games research, including requiring game companies to share aggregated player data with researchers.
In the Response, the government says it is in favour of supporting independent video games research to inform its ongoing development of evidence-based policy. The Committee's Chief Scientific Adviser and UK Research and Innovation will lead a series of workshops this year with relevant experts to help determine the full range and detail of the questions that need to be addressed on the impacts of video games and make recommendations for a further programme of research.
The government will also explore the potential to create a mechanism to request and analyse industry data, while working within the boundaries of the Data Protection Act 2018 and the advice of the Centre for Data Ethics and Innovation. However, the government is not seeking to impose a levy on the games industry to pay for new research as it believes it would disproportionately impact SMEs and microbusinesses.
In the UK, games are age-rated using the Pan European Game Information (PEGI) system and the physical distribution of games is regulated under the Video Recordings Act 1984 (Act). Currently, games that are published and played online are not subject to a legally enforceable age-rating system – this has led to a situation where Epic Games can make Fortnite: Battle Royale, a PEGI 12 rated game, available to any player through its website without asking their age.
In its Report, the Committee recommends that the Act is amended to ensure that online games are covered by the same enforceable age restrictions as games sold on disks. The government agrees that the age ratings from physical copies of games should be applied to those online. The government will assess the effectiveness of its current approach, which calls for the industry to voluntarily adopt PEGI age ratings. However, if progress is not forthcoming, the government will consider amending legislation as the next logical step.
Evidence on what constitutes “excessive screen time” is contested and companies are generally reluctant to acknowledge their role in designing what might be considered “addictive” game properties. The Information Commissioner’s Office Age Appropriate Design Code (see here for more) is a positive step in addressing the potential impact on children of design mechanics within digital technologies that are aimed at extending user engagement; however, it will not apply to technologies exclusively designed for adults. In its Report, the Committee therefore welcomes the government’s intention for “excessive screen time” and “designed addiction” to be monitored by the future online harms regulator. The Committee also believes a clear government plan for understanding and dealing with those harms from the outset is needed for the regulator to be effective in this area.
In its Response, the government refers to the Online Harms White Paper which proposes establishing in law a new ‘duty of care’ to users, which will be overseen by an independent regulator; the government is looking to appoint Ofcom as the new online harms regulator. The government agrees that greater clarity on online harms is required – specifically regarding concerns over screen time. While there is not yet sufficient evidence about the impact of screen time to support detailed guidelines for parents or for the regulator to place requirements on companies, the government expects the regulator will continue to support research in this area to inform future action. Steps are also being taken to ensure that schools will be required to teach about online safety and harms as part of the curriculum from September 2020.
Loot boxes are one of the most prominent features in the debate about possible links between gambling and games mechanics. Loot boxes are items in video games that may be bought for 'real-world' money, but which provide players with a randomised reward of uncertain value, for example, virtual tools, outfits and weapons. Although some games (including a version of Fortnite) reveal the loot box contents before a player decides whether to pay for it, usually the contents are unknown. At present, the Gambling Commission's view is that purchasing loot boxes does not meet the regulatory definition of licensable gambling under the Gambling Act 2005 because in-game items have no real-world monetary value outside the games.
In its Report, the Committee recommends that:
The government agrees with the concerns of the Committee in principle, however, it is unwilling to take legislative action until it conducts a thorough review of existing evidence. In this regard, the government points to its intention to conduct a review of the Gambling Act 2005, with a particular focus on tackling issues around loot boxes. Further, the government will launch a call for evidence in relation to the impact of loot boxes, specifically focussing on the impact on young people, links to problem gambling and the effectiveness of the current statutory and voluntary regulation, among other issues. The call for evidence results will be considered alongside the review of the Gambling Act 2005.
Esports is a rapidly maturing sector; there are opportunities for the development of esports to depict best practice in the use of player data, which could serve as a model for other parts of the industry. There is also scope for esports to go further in the promotion of player wellbeing. In its Report, the Committee asks the Department for Digital, Culture, Media and Sport to set out, within the next six months, how a similar framework to the duty of care practices enshrined and enforced by the governing bodies of other sports can best be applied within esports.
In its Response, the government says that it has brought forward the hosting of a ministerial roundtable with esports stakeholders. The aim of the roundtable will be to discuss potential market opportunities and barriers to growth and how the industry can collaborate to encourage best practice in areas such as player well-being and esports integrity.
In its Report, the Committee highlights the enduring gender imbalance in the games industry's workforce. A 2015 survey identified that only 4% of the UK games workforce was from BAME backgrounds, compared with roughly 14% of the working population as a whole. The Committee comments that some bodies in the games industry are taking their responsibilities seriously to promote diversity in the workforce, but others could be doing much more.
The government agrees that more work is needed in the games sector, including addressing the gender imbalance and improving the representation of women and girls, both in the industry and within content itself, and understanding the impact of this. The government is committed to strongly encouraging the consideration of diversity within video games research programmes. It also commended the current steps being taken in the industry by the likes of Xbox, EA, Facebook and BAME in Games, among others, who have already signed the Raise the Game pledge for equality, diversity, and inclusion.
Overall, the Response indicates the government is generally adopting a considered approach, favouring the establishment of, and increasing further support for, research initiatives in order to drive its evidence-based approach to policy change. The area in which we are likely to see the greatest change concerns loot boxes. Although the government has expressed its commitment to review the Gambling Act 2005 and launch a call for evidence, with the House of Lords Select Committee’s recently publishing its Gambling Harm – Time for Action report, it is likely that this increased pressure will accelerate change in this area.
As mentioned, the Response also focuses on the government's commitment to progressing online harms legislation – the initial consultation response was published in February 2020. However, a full response has not yet been made available and due to COVID-19, preparation of this legislation may be hindered. Given the pace of evolution in this sector, the government's challenge is to create policies quickly that are effective within the context of constant innovation.
Do pandemic lockdowns and recent industry trends signal promising times ahead for investment and M&A in the games industry?
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Examining the EGBA's Code of Conduct on data protection in online gambling.
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In March 2020, the German federal states agreed on a new German Interstate Treaty on Gambling (ISTG 2021) that is due to come into force on 1 July 2021.
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How the ICO's new Age Appropriate Design Code impacts games developers, publishers and platform operators.
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Considerations for buyers and sellers of video games businesses when approaching a sale of the business.
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