Video Game Law
When you play a video game, you probably think of the game as a single item. However, video games include many creative elements, such as art, music, narrative features, and code. Each of these elements is subject to copyright protection, since it consists of original content that has been fixed in a tangible form. Certain other features of video games may qualify for trademark protection, such as the title and logo of the game. Trademarks essentially are branding elements that encourage consumers to associate certain words, symbols, or designs with a product. Entities in the video game industry fiercely protect their intellectual property rights, since vast amounts of investments and profits are often at stake.
The popularity of video games has spawned wide demand for merchandise related to the games. Companies that want to produce and sell this merchandise must sign licensing agreements with the video game publisher or any other entity that holds the intellectual property rights to game content. In exchange for a fee, the licensee can use a character or another protected feature of the video game in its merchandise. A license may be limited to a certain use, a certain location, and a certain length of time.
Virtual Currencies in Video Games
Many video games contain currencies that players can use to buy items in the game or otherwise improve their game experience. In some cases, these currencies cannot be used outside the game and lack any connection to real-world currency. The player can collect them only by completing certain achievements or getting certain rewards in the game. In other situations, a player may pay something of real value for game currency. They might make a credit card payment or trade for game currency through a currency exchange on the Internet, in which users can exchange currencies across games.
Game currencies that may have a monetary value in the real world subject a publisher to tighter regulations. For example, a publisher may need to register as a casino operator, regardless of whether their game uses a casino format. They also may be classified as a money services business by the Financial Crimes Enforcement Network in the US Department of the Treasury. This means that the publisher would need to comply with regulations under the Bank Secrecy Act. To avoid the burdens of this classification, a publisher must establish in their terms of use that their game currency has no monetary value in the real world and cannot be exchanged for cash or transferred between players. The publisher must retain the right to change the purchase price for the game currency.
Video Game Advertising and Privacy Protections for Gamers
To comply with consumer protection laws, video game publishers must not advertise their games in misleading or deceptive ways. Ads for free games may need to disclose whether items shown in these ads must be obtained through in-game purchases.
Rather than charging a purchase price or relying on in-game purchases, some video games use in-game advertising as their main source of revenue. This is especially common among mobile video games. While some types of in-game ads are static and look the same for all players, other types of in-game ads are dynamic and vary according to the actions of the specific player. Publishers that use dynamic, targeted ads must comply with privacy laws when they use cookies or other tools that track player behavior.
In addition, many video game publishers collect personal information from players for marketing purposes or simply to help offer a better game experience. Privacy protections may apply, depending on the type of information collected. This is especially true for child players, regardless of whether they are playing video games that are specifically designed for children. In general, a video game publisher must establish a privacy policy. They must tell players about the scope of the information that they collect and the purposes for which the information is used. In particular, players have a right to know whether the video game publisher will share this information with third parties.