New Player? European Parliament Resolution aims to power up European video game industry

The most recent Resolution from the European Parliament on esports and video games (adopted 10 November 2022, "the Resolution") makes a number of ambitious recommendations which aim at transforming Europe into a greater player in the global videogame industry.

These include far-ranging calls to adopt a "long-term European video game strategy" and better funding for European video game initiatives; as well as particularly highlighting various specific issues such as the cross-border enforcement of IP and the harmonisation of loot box regulation in Europe.

What are the most significant changes being proposed?

Although the Resolution begins with long list of "acknowledgments" about the video-game industry (e.g. that it has "become a leading cultural and creative industry (CCI) all over the world, with an estimated European market size of EUR 23,3 billion in 2021") the potential impact of these has already been speculated on at some length. For our purpose we will therefore focus on the particular "calls to action" the Parliament makes to the Commission, Council and wider industry.

These can broadly be divided into three categories:

1. Relatively uncontroversial recommendations to support / improve broad initiatives which are almost universally agreed to be of benefit. These "motherhood and apple pie" type recommendations include, for example:
   • The development of a European video game strategy (and a particular strategy for video game IP)
   • The creation of a European Video Game Observatory to support and provide decision-makers and stakeholders with harmonised information
   • Improved upskilling and reskilling initiatives for creators (given the chronic talent shortage)
   • Improved working conditions for videogame developers (via better contracting practices and regulatory compliance)
2. Plans for improved guidance and other kinds of "soft law" which the industry have been asking for (which also appear rather "innocuous"). These include, for example:
   • The revision of the relevant codes in the Statistical Classification of Economic Activities in the European Community
   • The creation of comprehensive guidelines regarding the status of professional esports players
   • The development of a charter to promote European values in esports competitions 
3. Potentially more controversial are those proposals which would require substantive changes to the law. Some particularly notable highlights here include:
   • The introduction of harmonised legislation on "loot boxes" and other "in-game monetisation" issues
   • The creation of a new visa for esports personnel based on the Schengen cultural and sports visas
   • The creation of a "European Video Game" label
   • Improving the cross-border enforcement and protection of videogame IP

What should the industry expect?

This last category is the one which deserves perhaps the most attention from a legal perspective. However, it is worth highlighting that in all these instances, we are still at an incredibly early stage in any legislative process.

For example, over the past few years we have seen the issue of loot boxes frequently come onto the political agenda, and over the last few months particularly we have started to see an acceleration in EU Member States developing their own local regulations in order to address this (for example, see our blog series earlier this year). While developers looking to market their products globally will undoubtedly welcome calls on the Commission to consider legislative measures (which could produce a harmonised European approach to these issues) there could be many years between the Commission developing their proposals, consulting on these, redrafting them, and the EU going through the process of adopting them before we see anything actually come into force. It is also quite possible that after considering legislative amendments the Commission turns the issue back on the industry to address (for instance, as we saw in the UK with their latest Response to the Call for Evidence on Loot Boxes in Videogames).

As much as the potential significance of the Resolution should not be understated, developers can therefore avoid jumping to battle stations just yet. The impact of the Parliament's pivot towards videogames could potentially have extremely wide ramifications for the future health of the industry, but we are simply at too early a stage to evaluate what the precise contours of these changes might entail, and what form the proposals will eventually take when put before Parliament.  We anticipate that next year legal departments in the industry will need to be focussed on the changes required to adapt to the new regime under the EU's Digital Service Act, and the UK's Online Safety Bill (for example: determining whether their games/platforms fall in scope; and conducting a review of their online safety risk / complaints procedures accordingly). However, going into the New Year, businesses will also need to stay alert for further updates as some of the Resolution's proposals start to take shape; and prepare themselves for what could be quite lengthy industry-engagement efforts on these projects.  
 
There could be a new major player in the global videogame landscape; but we wouldn't be placing any bets just yet.
 
With special thanks to trainee, James Russell, co-author of this article.