The challenges of esports and video games in Intellectual Property and Consumer Law

Esports and video gaming industry has grown significantly in popularity in recent years, with professional players and teams competing in tournaments.

With this growth the European Parliament (“EP”) has pointed out some challenges, opportunities and strategies in the Resolution of November 10th, 2022 (2022/2027(INI)) (“Resolution”), in order to provide guidance and establish common standards for this industry, being of particular interest those concerning to Intellectual Property (“IP”) rights and Consumer rights.

IP ownership was recognized as an issue that impacts the ecosystem of video games industry and creates new challenges for streamers, developers, publishers and third-party content holders. In this Resolution, esports and video games have also been recognized as a monetised activity – when they imply “micro-transactions”, such as “pay-to-win” mechanisms – which may bring some challenges in consumer protection, as they could be considered as gambling.

To face such challenges, the EP has issued the following recommendations:

Concerning IP rights:

  • By recognising IP as a central key factor in the growth and investment of this industry, the EP underlined the need to develop a European strategy for video game IP, utilizing both the creation of new and original IP and the promotion of existing European creations and IP;
  • Cross-border enforcement of the IP rights of game developers and artists must be adequately protected and that fair remuneration must be ensured;

Concerning Consumer rights:

  • Highlights the need for greater transparency surrounding loot boxes, including when it comes to the chances of winning, and a harmonised European approach;
  • Stresses that where loot boxes are used, they must be made fully clear and transparent to all players, in particular minors and their parents, in order to prevent risky behaviour;
  • Calls on the Commission and the Member States to consider legislative measures, where appropriate, to address issues linked to the phenomena of in-game monetisation, such as luck-based game elements and “pay-to-win” systems, taking into account all possible means to protect players that are most vulnerable, such as minors;

Lastly, but not least, the EP also sought to support the development of video games industry by calling on the European Commission to create a “European Video Game Observatory” and “Video Game Academy”. The first would aim to support and provide decisions-makers and stakeholders with harmonized industry’s data, assessments and concrete recommendations with a view of developing the sector, which could also be utilized as a knowledge network to support dialogue for a more integrated sector. The second would aim to educate people and raise awareness about the benefits of video games for the development of skills and general knowledge.

Despite the fact that the regulation of esports and video games is the competence of each member state – which may have and adopt different approaches to the issues raised –, it seems that this Resolution might “pave the way” for a possible harmonisation of these matters, and therefore it is worth keeping an eye for possible initiatives.