Smart phones, tablets, apps and social media have been the key to unlocking a mobile gaming industry in the UK worth £550m in consumer spend last year alone.
What’s more, the innovative ways in which developers are commercially exploiting their games and generating revenue, particularly via the ‘Freemium’ model and in-app purchases, have also contributed to the multi-million pound industry.
The technological advancements which have run alongside and contributed to the growth in the mobile gaming industry have caught the eye of regulators, who have introduced a new area of consumer law called the Consumer Rights Act 2015.
What is the Consumer Rights Act (CRA)?
The CRA will apply to games developers from 1 October 2015 and will revolutionise the way in which developers supply games to its avid gamers.
Put simply, the CRA aims to protect individuals who purchase digital content from suppliers and developers.
The key concern arising out of the previous system, which partly led to the introduction of the CRA, was whether ‘digital content’, e.g. mobile phone apps and virtual in-app purchases, fell within, or outside of, consumer law. Whether or not digital content was categorised as a service or as a ‘good’ has clouded the position at law since the rise of mobile apps.
This is where the CRA steps in and clarifies the position, ensuring that digital content (specifically mobile games) is regulated. It is therefore important that developers take appropriate action to comply.
Queen Digital Entertainment: A case study
Fictional developer, Queen Digital Entertainment, is a large games developer which develops games for the web, for mobile, and for Facebook, the most recent of which was Sugar Rush Saga. The new CRA will therefore apply to Queen and will protect those gamers who purchase Sugar Rush.
What are Queen’s obligations under this new law?
When gamers purchase Sugar Rush, Queen must meet certain standards, for example by ensuring the game is satisfactory in quality. These requirements will also apply where gamers make in-app purchases on Sugar Rush, for example extra lives or tokens to boost performance.
What happens if Queen fails to meet these obligations?
If, for example, there is a bug or error in Sugar Rush, Queen must either repair the bug, provide a replacement download for the gamer or, in some circumstances, reduce the price paid for the game.
But Sugar Rush is a free download!
Queen frequently supplies its games free of charge and commercially exploits its games through premium features or enabling in-app purchases.
The obligations only apply to games when they are actually purchased, whether with money, gift vouchers or virtual money.
However, if a bug in Sugar Rush causes damage to a gamer’s mobile phone, regardless of whether it was a free download, Queen may still be liable in negligence.
What if Queen doesn’t actually own the game?
Under the new CRA, it is assumed that Queen have the right to supply Sugar Rush to gamers, regardless of whether they actually do have such a right.
Prior to developing Sugar Rush, Queen should have ensured that any of its copyright, or any other intellectual property arising out of the development of Sugar Rush, is protected and Queen is the legal owner of such rights.
If there were other developers involved in the creation of the game, Queen must ensure prior to supplying Sugar Rush that it is not breaching other developers’ intellectual property rights in doing so.
Queen wants to avoid breaching the CRA. What should it do?
There are five key actions Queen should take to avoid breaching the CRA:
- Queen should review any contractual documentation that should accompany the download, for example its terms and conditions.
- Pre-contractual information, for example Queen’s description of Sugar Rush on the app store, should be reviewed to ensure it is accurate and does not mislead gamers.
- What are Queen’s refund policies? These should also be reviewed in light of the new law.
- Any contractual documentation must be brought to the gamer’s attention clearly. It should be comprehensible and not too strict to the point any terms are unfair on the gamer.
- Queen must train its customer service team and technical support staff to ensure that they understand the changes and the impact the changes will have on Queen’s approach, particularly to its unsatisfied gamers.
The purpose of the CRA is to protect and give confidence to gamers and consequently assist the mobile gaming market.
If developers and suppliers review their procedures and documentation to ensure compliance with the CRA, they can avoid liability for breach of the law and may also reap the benefits of increased gamer confidence.
To capitalise on a growing market and with less than four months until this new law is implemented, now is the ideal time to start implementing any new procedures and reviewing those which already exist.