Across the Atlantic, there are panicked phone calls. It wasn’t enough that Germany, the second largest video games market in the EU, needed customisation for any game involving death or Nazis. Now, as soon as that new EU legislation gets ratified by the German courts, almost all game EULAs won’t be worth the paper they’re not printed on. Thanks Germany!
Yesterday’s EU guidance ruling said secondhand software, including games, can be traded any number of times. We got various industry figures to comment on this earlier today – but here’s what we think the fallout of this is going to be for us, the gamers.
First. We think it’s likely that the German court (which started this in a case involving software giant Oracle and secondhand software seller Usedsoft) will follow the EU ruling. The normal procedure in these cases is for the lower national court to ask for an EU ruling, then follow it when it’s passed down. Given the total clarity of the ruling, it will be difficult for the lower courts to quibble.
If it’s ratified, it’s likely to followed by test cases in other EU countries from firms like Green Man Gaming or even from the legal apparatus, seeking to clarify the law in every country. It might take a little time but, in the meantime, games companies will keep enforcing their EULAs, so don’t start trading digital games yet.
When it’s passed in your territory, it means that you’ll be able to trade all physical and digital software. With digital software, as long as there’s only one copy in existence at any time (unless multiple copies are necessary for its use as intended by the vendor), it’ll be legal. Moreover, the initial vendor has an obligation to update and provide technical support for the product as if it were new. Any EULAs that break these rules will simply be invalid.
Yet, once it’s ratified, there are more questions – and likely more test cases. The German case has obliged Oracle to continue supplying support and updates for the users of secondhand software. Does this mean that Valve and EA will have to implement a proper game trading service in Steam and Origin? Will they obliged to let people trade products outside of their own systems (which the freedom of movement for goods directive seems to mandate)? If so, can DLC and in-game currency be traded too (and what does that mean for EA’s single-use DLC bundling)? These are dependent on local court interpretations and will probably end up back at the European level at some point.
Even Green Man will be challenged though, as they only allow players to trade games back to them, not with each other. The first firm that sets up a system that allows easy, verifiable trading of licenses will make a killing.
Valve are the firm best placed to do this. They already have a robust sales system developed to sell hats in Team Fortress but which already allows the transfer of games as gifts between players. Whether this, if converted to a game trading system, would infringe Green Man’s patents in this area is another question.
How will this legislation affect the initial price of software? Secondhand software sales will rapidly drive the cost of the less popular games down after the initial weekend, much like the current secondhand market on Amazon and Ebay, where overhyped games trade for very little indeed. Rarely-traded or longterm games will hold their value, but the e-tailer’s price will provide a price ceiling. (This means that, with Football Manager and Total War under its belt, Sega has slightly less to worry about.)
What does this mean for MMOs? Again, this depends on court interpretation. If account data is construed as part of the software (which it would seem to be, as the game is unplayable without it, contradicting the maintenance principle) then any MMO that’s reliant on up-front sales will have to allow account transfers. F2P games are an even harder question.
How will the big software firms react to this? Given the EU’s increasing reliance on hi-tech sectors like software, we imagine there will be hardcore lobbying from major corporations in all EU territories to get this changed and new legislation passed at a European level.
For example, in the UK, Square Enix’s Ian Livingstone already has the ear of ministers from his successful lobbying to get programming onto the national education curriculum. High placed captains of industry are always well-placed to lobby, successfully, about these sorts of things – and EU governments moving towards the tech sector will be terrified at the prospect of losing so much GDP so quickly. Legislation will be passed as quickly as politically possible to stop this apparent loophole.
In the meantime, Steam and Origin can’t move to a mock-rental prospect – the courts would see through that and construe it as sales – and it’s unlikely that they’d want to move to a pure Lovefilm rental model, as that changes entirely what they’re doing. They may just have to ride the storm by_not_ implementing the changes. They’ll be gambling that they don’t get prosecuted before the law’s changed back and that their customers won’t simply jump ship to another platform that does allow trading.
If the legislation isn’t passed to reverse this change (plausible because of the fundamental commitment in European legislation to the freedom of movement of goods), then we’ll see an even greater reliance from retailers on day one sales and probably a fundamental shift in how games are transferred to the consumer. We may start buying limited time licenses for games or find that many more games go F2P or implement subscription models.
This is a hugely complicated topic and we’ve barely scraped the surface of it, but we’re going to follow proceedings as closely as possible, to keep you up to date.
Image from SpottedPurpil