HomeGamesOnline Gaming Industry To Face New Regulatory Challenges In 2022

Online Gaming Industry To Face New Regulatory Challenges In 2022

Gamer The online gaming industry is facing a shift in regulatory focus from the kind of content it offers to how players interact with games. That’s not to say governments are unconcerned about kids and young adults being exposed to violent video games anymore, but there’s an increasing amount of attention on how much time and money players are spending in games nowadays.

We’re talking about online games in particular since there’s no way for authorities to control how much time you spend playing offline titles, of course. The pandemic has changed how we interact with technology. People are spending more and more time glued to their screens for work and social reasons. Naturally, online gaming for entertainment as well as socializing has seen a huge boost due to this.

Two interesting bits of information which stand out are that the global gaming market is expected to achieve a CAGR of 9.64% between 2022 and 2027, while the online gambling industry is predicted to hit a CAGR of over 11% in the 2020 to 2027 period, according to independent market researchers. It’s no wonder that regulatory authorities are pushing for increased control over how people spend their money gaming online.

On the other hand, the gaming industry feels self-regulation is the way to go (most gamers share this sentiment too) when it comes to how players decide to spend their resources. For example, Casumo Canada has a Play OK section which educates users on the controls they can set to prevent themselves from spending more than they can afford while playing games. PayPal recently added the Gamban software to the recovery toolkit on its platform for users to block gambling transactions if needed.

Microsoft Store Popular Games 2022
The most popular games in the Microsoft Store in January 2022|Image: Microsoft Store

In terms of more widespread gaming titles, Google Play Store allows parents to set the maturity level of each content type. Apple and Microsoft enable families to place limits on how much time their kids spend on games and apps. But governmental authorities world over are insistent on stricter rules anyway. In compliance with China’s new laws intended to reduce addiction to gaming, Tencent is scanning players’ faces to ensure that adults are not letting children use their accounts to play for more than 14 hours during the month-long winter school break.

In the UK, the government unwittingly set off a mass migration of slot machine enthusiasts from offline to online gaming in 2018 after reducing the amount people could bet on physical slot machines from £100 to £2. Britain is currently waiting with bated breath for the latest rules which might see the market shrink drastically if operators are expected to audit customers’ financial standing and the £2 limit is extended to online slots too.

While online gambling is legal in some regions of the US, Canada, Europe, India — as well as in countries such as Australia, France, Japan, China and Germany, to name a few — the laws are often confusing and restrictive in many of these places. In India, for example, a lot of states do not make a clear distinction between skill-based games like PUBG and games of chance such as poker. At the same time, this not a problem restricted to India.

In many nations, paid loot boxes in offerings like Overwatch and Counter-Strike: Global Offensive continue to face the ire of regulatory watchdogs due to the fact that they encourage players to shell out real money for in-game items. Since loot boxes contain randomized drops, they are said to encourage players to pay money to gamble on the chance that they might get an item they desire. However, game publishers feel they should be a legitimate way to earn revenue from a title post-release.

Loot Box In Video Games
Loot boxes with pay-to-win systems have been a subject of controversy for years.

In a paper dubbed ‘Gambling On Games’, Canberra-based The Australia Institute points to an addiction pattern arising due to the gambling-gaming crossover and says loot boxes are similar to a lucky dip. It argues for the reclassification of games in order to restrict gambling content to adults. Things are only set to get murkier as we head towards an evolved version of the Internet where a parallel economy centered on NFTs and other virtual goods will inevitably flourish.

Kids are already trading NFTs in the form of special items in Roblox, for starters. These are purchased using the in-game currency called Robux which actually costs real-world money. Folks are making millions off prime real estate in 3D world Decentraland, which also happens to have a virtual casino that lets players take home their winnings in the form of cryptocurrency. Luxury brands like Gucci and Balenciaga are raking in the cash on one-off, virtual couture pieces. The list goes on and on.

What does all of this mean for authorities attempting to create a tight regulatory framework around online gaming? While efficient laws need to be in place in order to protect vulnerable parts of the population like minors and those who are not as well versed with the Internet as others, pushing for Draconian measures to prevent gamers from spending their money online at their discretion will not work in the long run.

People will spend their resources as they please, whether it’s on in-game purchases and virtual goods or betting on esports. As more and more folks gain access to high speed Internet and devices that enable to them to entertain themselves online, the gaming industry will continue to grow. There’s more sense in addressing the external factors which encourage people to spend unhealthy amounts of time and money online than placing severely restrictive rules on games or apps.