Digital Business27.09.2022 Newsletter
For game manufacturers, changing the in-game payment or reward system in the game after the fact is often lucrative. This is not without risk.
Billions are generated in the online gaming market: the majority of the revenue of publishers and distributors of video games such as Tencent or Nintendo is generated through in-game purchases (as recently critically reviewed in ZDF Magazin Royal on 16 September 2022). These so-called micro-transactions now account for a large proportion of turnover, involving billions worldwide.
When changes are made to a game as part of an update, this is often accompanied by a change in the in-game payment system. Incentives are created for players to spend money in various ways. This can involve the acquisition of pure design objects, such as special so-called game “items”, advantages over other players or faster progress in the game. This has been met with criticism from many players, as the impression given is that the publishers are not interested in a better gaming experience with the updates, but only in their own economic success.
What are in-game purchases?
Nowadays, almost all video games have their own currency, which is also called in-game currency. This can be earned or bought with real money. The in-game currency can be used to purchase different items in the game.
It varies from game to game whether there is one or more currencies. Some games have several in-game currencies, one of which can only be earned and another that can only be purchased. In order to obtain certain high-value items, both currencies are often needed in such cases. These particularly high-value items usually bring a significant game advantage over other players.
Updates for the gaming experience
To ensure consistently good gaming experiences, publishers regularly release updates to their games. These updates initially optimise the game experience and fix bugs. However, in many cases, in-game items are also changed with updates. This may include, for example, changing the strength of certain items or introducing new items to the game.
Items that were already unlocked by players before the update may also be affected. This can be particularly annoying for players if they have unlocked or purchased certain items during the game and these items lose value or power due to an update. Additionally, the introduction of new, stronger items can lead to a player’s own item becoming less competitive. Both constellations can increase the pressure on players to purchase new items via micro-transactions or to upgrade items they have already acquired or unlocked.
Publishers walking a fine line
Considerable sensitivity is required by publishers when they make interventions that change a game’s ecosystem. On the one hand, a "devaluation" of the items, some of which have been earned with great effort or acquired at great expense, can cause displeasure among players. This happened most recently with the game Gran Turismo 7: through an update, the publisher had roughly doubled the time required to earn in-game currency and players felt pressured to buy the in-game currency.
In addition to the possible damage to the publisher's image, the legal risks also require consideration. Complaints from competitors or damage claims of players are possible. There is no ruling as yet at highest court level on the extent to which publishers are obligated to preserve a video game when they offer it, and on the extent to which the game's ecosystem must be preserved. For example, do items have to be permanently available in the game at the same price, or can prices be increased? Can items simply be replaced with better ones if this makes them virtually useless in the game?
In each case the legal starting point is the question of whether the framework conditions of the game represent non-binding game rules or whether they establish a binding legal framework, as is the case with general terms and conditions (GTC).
If the rules are general terms and conditions, they are subject to the control of general terms and conditions control. These have to be measured against the provisions of Secs. 305 et seq. German Civil Code [Bürgerliches Gesetzbuch, BGB] and must not unreasonably disadvantage the contractual partner, in this case the player. Publishers face damage claims of players if, for example, economic risks are unilaterally passed on to the player or changes are made without good reason that significantly alter the contractual relationship between player and publisher.
This risk can be reduced by publishers reserving the right to make adjustments and changes in general terms and conditions. Publishers are freer when setting up the payment and reward system and items for the first time. The risk of complaints from competitors and consumer associations exists if the general terms and conditions contain clauses that violate so-called market conduct rules.
In the event of subsequent changes to the payment and reward system, the legal implications therefore also have to be comprehensively examined in addition to possible damage to the company's image.