The Law Finally Caught Up, EVERY AAA Is In Trouble

Summary

The European Union has recently introduced new regulations targeting manipulative monetization practices in video games, particularly focusing on 'premium currencies.' The Digital Fairness Act seeks to eliminate exploitative tactics, such as FOMO and bundling, that pressure consumers, especially children, into spending more. A key example is *Star Stable*, a game accused of targeting kids with harmful practices. While these changes are a win for consumers, they have sparked resistance from the gaming industry, with concerns over financial impacts and future growth. The EU's influence may reshape global gaming monetization practices, offering a more transparent and ethical model for consumers.

Takeaways

• 😀 The European Union has proposed new rules to address manipulative premium currency practices in video games, specifically targeting practices that exploit children and vulnerable players.
• 😀 The proposed Digital Fairness Act (September 2024) aims to curb dark patterns in online games, such as misleading ads, lack of transparency, and FOMO (Fear of Missing Out) tactics.
• 😀 *Star Stable*, a game about horses, was highlighted as a major example of harmful practices, particularly targeting younger audiences with manipulative monetization techniques.
• 😀 The Swedish Consumer Agency filed a complaint with the EU about *Star Stable*, which led to an investigation into harmful commercial practices such as using influencers without proper disclosure of spending risks.
• 😀 The new EU rules would mandate transparent pricing for in-game currency, with no more buying excess currency or bundles, forcing companies to be more honest in their pricing models.
• 😀 Refund policies would also be required for both in-game currency and items, which is a significant shift in how digital purchases are handled.
• 😀 FOMO-driven events that pressure players into making quick purchases without proper consideration may be restricted under these new guidelines.
• 😀 The EU Consumer Protection Cooperation Network (CPCN) considers premium currency as equivalent to real money, meaning these purchases should face the same legal scrutiny as traditional transactions.
• 😀 Larger companies like Ubisoft may absorb the costs of changing their monetization systems, but smaller companies might struggle with compliance, potentially leading to financial challenges.
• 😀 There are concerns that developers might choose to geo-restrict access to games in the EU to avoid the changes rather than alter their monetization models, but this could negatively impact their bottom lines globally.
• 😀 The EU's legislation has the potential to set a global precedent, much like the USBC charger standardization, which could force the entire gaming industry to adopt more ethical and transparent practices in their digital economies.

Q & A

What is the primary focus of the European Union's new regulations on in-game monetization?

The primary focus is to curb manipulative practices in video games that target vulnerable groups, especially children, such as predatory premium currency models, FOMO (Fear of Missing Out), and lack of transparency in digital purchases.

Why was *Star Stable Online* used as an example of predatory monetization practices?

*Star Stable Online* was chosen because it employs various manipulative tactics aimed at children, such as excessive pressure to purchase virtual currency, lack of transparency, and using influencers without disclosing the risks of spending, making it a clear example of what the EU is trying to address.

What specific practices related to premium currencies are being targeted by the EU's new regulations?

The regulations target practices such as selling premium currency in amounts greater than what is needed for specific items, lack of refund policies for currency or in-game purchases, the use of FOMO tactics to encourage immediate spending, and the pairing of currency with other items to obscure true costs.

How would the proposed changes impact the purchase of in-game items like a new horse in *Star Stable Online*?

Under the proposed changes, players would be able to buy exactly the amount of virtual currency they need (e.g., 300 coins for a new horse) without being forced to purchase unnecessary extra coins, eliminating the practice of buying bundles with leftover currency.

What does the European Consumer Organization's stance on the changes represent for the gaming industry?

The European Consumer Organization supports the changes, emphasizing that these new principles for trustworthy gaming environments could lead to significant improvements in transparency, fairness, and consumer protection in the gaming industry.

How have industry bodies like the European Game Developers Federation reacted to the proposed regulations?

Industry bodies have expressed disappointment, arguing that the new regulations introduce confusion, disrupt growth, and could deprive millions of consumers of access to their favorite games, particularly if companies are forced to alter their monetization models.

What potential consequences do game developers face if they do not comply with the new EU regulations?

If developers fail to comply, they may face legal challenges or choose to geo-restrict their games in the EU to avoid legal repercussions, potentially leading to European players being excluded from certain games or receiving a less favorable version of the game.

What example from the hardware industry was used to illustrate how the EU's regulations might have global effects?

The example of the USB-C charger standard was used, showing how the EU's regulations on hardware forced global companies like Apple to adopt a universal charging standard, suggesting that similar changes in game monetization could also ripple globally.

Why do some companies prefer the status quo of current monetization practices?

Companies favor the current monetization practices because they are highly profitable, leveraging psychological tactics to maximize revenue, and changing them would mean adjusting business models that have been successful for many years.

What impact could these new regulations have on smaller game companies?

Smaller game companies may struggle to implement the new regulations due to the costs and logistical challenges involved in redesigning their monetization systems, which could lead to financial strain or even operational changes.