Game monetization is a tricky business. In the modern market, where casual games have become simpler than ever to produce and distribute over the internet, control over the monetization of your casual game is an exciting power to have. But if these games become abusive of their consumers, the law starts turning its attention their way, and asking some important questions.

  • Is the game treating its consumers fairly?
  • Is the game’s marketing in line with its offering?
  • What financial model does the game use?

The term “freemium” is well-known: a game that is free to download and play, but which makes many elements of the game unavailable or unreasonably difficult to achieve without spending real-world money. The core of this model of game monetization is to incentivise payment, which is expected and understandable. But when your model shifts from simple incentive to active deception, your game can be in very dangerous territory.

Game monetization troubles in the wider world

Over the past few years, we’ve seen an increase in regulatory focus on the potential for abuse in game monetization, most pronounced in casual games. Last year, the EU banned the description of games as “free” if they contained “in-app purchases”, the staple of the “freemium” model. Google’s Play Store recently stopped listing games as free, too, for the same reason – the games, to a greater or lesser degree, misadvertised themselves. Even more impressive is the fact that Japanese courts have begun using gambling legislation when approaching casual games, as the models are often so very similar. In particular, the Japanese Consumer Affairs Agency declared as unlawful games that offered rewards for completing a collection of randomly-generated items that the player pays for, as they were virtually indistinguishable from slot machines.

The dangers your game could face

The issue isn’t simply the type of game monetization you decide on – the freemium model can still be used without serious repercussions. Instead, the danger is in how your game merges your business model with gameplay. Does your game show the player a set of results that could have been achieved had the player paid real-world money? This is fine. Does your game give the player a different set of results, based on entirely different coding, when the player actually does pay real-world money? This is not.

The offenses of fraud, false advertising and misrepresentation can be coded into your game, and if they are, you as the game creator can be held liable for these offenses.

How we can help you

We can help you create a game that has a responsible model, and avoids potential liability for fraudulent in-game representations. We practice startup law and help IT startups and game developers with their legal requirements and responsibilities.