PlugIn Issue #24 - Recent Developments in the European Gaming Industry

The Taylor Wessing e-journal
Issue #24
Recent Developments in
the European Gaming
Industry

EDITORIAL
The gaming industry is a fast paced industry, which is continuously undergoing major development. In this
fast evolving business, it's crucial that the legal framework is keeping pace. In this PlugIn issue, our experts
from all over Europe highlight recent legal developments in the European gaming industry and how to
manage them, whether it be new game subsidies in Germany, financial support for cultural video games in
Poland, gaming addiction concerns in the UK, the widely discussed framework affecting Loot Boxes in
France, or how the GDPR affects the gaming industry.

CONTENT
Dr. Gregor Schmid, LL.M.
Partner, Berlin
Game Subsidies in Germany – Recent Developments 4
Laura Huck
Associate, Paris
Games-Law – Recent Developments in France: the Position of the French Regulator
Regarding Loot Boxes
5
Matthew Ives
Associate, London
Addicted to Loot: Recent Developments in Gaming Addiction and Gambling Concerns in
the UK
6
Przemysław Walasek
Partner, Warschau
Financial Support for Cultural Video Games in Poland 7
Anneliese Hartlaub, LL.M.
Associate, Hamburg
Benjamin Stach, LL.M.
Associate, Hamburg
Data Protection and Games 8
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3

Game Subsidies in Germany – Recent Developments
Germany offers a system of state (“Länder”) and federal level subsidies for computer
games. The amount of subsidies has often been criticized as being far too low
compared to other industries (such as film) and other countries (such as public funding
available in Canada, France or the UK). Finally in 2018 the federal government
introduced plans to implement a EUR 50m subsidy per year for the game industry.
Details are expected to be published in autumn 2019. In the meantime, game
companies can now apply for a de-minimis subsidy until 30 August 2019. The following
article briefly outlines the expected new subsidy regime, as well as other currently
available subsidy mechanisms.
AUTHOR
The Expected EUR 50m “Large Volume” Subsidy and the Cultural Test
The German government has announced plans to introduce an annual EUR 50m
subsidy for computer game development in 2018. Recently, the government has
declared that the rules will be published and enter into force after notification to the
European Commission in autumn 2019. So far, only a few details have emerged.
However, the prerequisites of the large volume subsidy are expected to be mainly
based on the “German Game Fund”, a subsidy model presented by the German game
industry association in April 2018.
Dr. Gregor Schmid, LL.M.
Partner, Berlin
PROFILE
READ MORE
Issue #24
4

Games-Law – Recent Developments in France: the Position
of the French Regulator Regarding Loot Boxes
Loot boxes are boxes that offer random content in some video games. They can be
distributed free of charge when the player reaches a certain milestone in the game or
can be purchased by the player in a virtual store included in the game, either with a
kind of digital currency (collected over time and games) or with real money.
AUTHOR
The phenomenon of loot boxes, although not completely new, was not controversial
until recently, as these boxes made it possible to finance free games available.
However, this model was strongly criticized when in 2017 some video game publishers
integrated loot boxes into paid games and made the purchase of such boxes almost
mandatory in order to fully enjoy the game.
The gambling regulators of several countries then examined the issue of loot boxes to
determine whether they could be considered as disguised gambling.
In France, to be characterized as gambling and to be sanctioned if it has not been
allowed, the gambling game must meet a definition based on the combination of three
criteria: an offer made to the public, involving a financial sacrifice granted in the
expectation of a gain.
Laura Huck
Associate, Paris
PROFILE
READ MORE
Issue #24
5

Addicted to Loot: Recent Developments in Gaming
Addiction and Gambling Concerns in the UK
The video games industry continues to see strong growth, both through proliferation of
mobile gaming as well as a robust traditional gaming and console market. However,
UK lawmakers are continuing to voice their concerns, particularly around the potential
for video game addiction and the perceived link between gaming and gambling.
AUTHOR
The ongoing inquiry into immersive and addictive technologies run by a Digital, Culture,
Media, and Sport committee has been hearing evidence from a range of industry
players, from developers to regulators. So far, its chair, Damian Collins MP has been
sceptical of the level of care taken by the industry, which he accused of merely „paying
lip service“ to the issues of gaming addiction and gambling.
Loot boxes, which provide players with the opportunity to pay to open a ‘box’ and
acquire an unknown quantity and quality of in-game items for use within the game,
have drawn particular scrutiny.
The UK Gambling Commission has in the past identified loot boxes as a potential risk
to children and young people. However, for the purposes of UK gambling laws, a key
factor in deciding whether a gaming practice crosses the line of what is and is not
gambling and presents a risk to people is whether in-game items acquired “via a game
of chance” can be considered „money or money’s worth“.
Matthew Ives
Associate, London
PROFILE
READ MORE
Issue #24
6

Financial Support for Cultural Video Games in Poland
The Polish Ministry of Culture is currently working on the draft law on financial support
for cultural video games. The draft law is supposed to be completed in the fourth
quarter of this year at which point it will be forwarded to the Polish Parliament where
the main stage of the legislative process will take place. The new law is supposed to
come into force in 2020 and may be one of the major factors which may positively
impact on the Polish gaming industry.
AUTHOR
The basic idea
The rationale behind the new law is to introduce tax relief for the production of cultural
video games in order to support the competitiveness of the gaming industry in Poland,
to compete with other jurisdictions and thus also to counteract the capital outflow and
emigration of qualified specialists.
The draft law is strongly inspired by similar legislation in other countries, in particular in
France, the UK, Finland but also in other countries, which have had positive
experiences with similar tax relief schemes. In France similar tax relief was introduced
in 2007 and in the UK the Video Game Tax Relief (VGTR) was introduced in 2014 –
these countries have already analysed the effects of the new laws and concluded that
the relevant legislation brought the expected advantages….
Przemysław Walasek
Partner, Warschau
PROFILE
READ MORE
Issue #24
7

Data Protection and Games
The EU General Data Protection Regulation (GDPR) regulates and restricts the
processing of personal data, meaning any information relating to an identified or
identifiable person.
The GDPR generally applies to any company located in the EU or one that provides its
services to people within the EU. As the EU is a big market for the gaming industry, this
applies to nearly every games provider. However, the GDPR is not applicable to
software developers or hardware producers involved in the games business that do not
process personal data themselves, but merely enable others to host and operate by
using their software infrastructure.
Games providers generally collect and store a lot of personal data, especially if they
offer browser-based or multiplayer games: registration or payment information,
metadata on usage such as times, possibly durations and locations of logins,
behavioral data on the interaction of the player within the game, communication data
and video footage from internal chat applications and so on.
READ MORE
AUTHOR
Anneliese Hartlaub, LL.M.
Associate, Hamburg
PROFILE
PROFILE
PROFILE
Benjamin Anneliese Stach, LL.M.
Hartlaub, LL.M.
Associate, Hamburg
Associate ,
Hamburg
Issue #24
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Issue #24
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VIDEO
Issue #24
10

The Taylor Wessing e-journal
Issue #24
Rethinking the laws of
the digital future