Exchanging experiences: Legal Summit at the Prague Game Developers Session 2024

The video game sector has emerged as the largest segment within the interactive entertainment industry, continuously evolving also thanks to the deployment of new technologies, such as GenAI, which are able to both bring new efficiencies to game development and influence monetisation strategies. The surge in popularity has, however, also attracted regulatory scrutiny as highlighted in the recent Prague Game Developers Session (GDS), the oldest Central European conference dedicated to games development, game technologies, business and marketing.

One of the novelties of this year’s edition was the creation of an exceptional Legal Summit organised by Linklaters’ alliance firm Kinstellar. This half-day dedicated to legal topics included talks from a broad range of industry experts, including external counsels and in house representatives. In this post I highlight the key takeaways from this first edition of the Legal Summit.

Prague Game Developers Session – Legal Summit - Key takeaways 

I was delighted to be involved in two panel discussions at the first Prague GDS Legal Summit. The panels focused on dark patterns in video games, and how to approach video game M&A from the sell-side. Many key issues were addressed during this day such as AI, transmedia IP, in-game monetisation, consumer law and M&A. Key take-aways from the Legal Summit include:

• Keep tabs on AI regulations: AI is transforming the video game industry. Game companies should carefully monitor any legal developments in this respect as this is an area where regulation is moving fast.
• Safeguard your intellectual property rights and carefully negotiate transmedia licenses: Strong IP is key and it is crucial for game companies to protect their IP and to negotiate carefully when giving out rights, for example to movies companies for them to produce movies adaptations of video games.
• Consumer protection under regulatory spotlight: Consumer law is a hot topic in the games industry. Both national and EU regulators, as well as national authorities are expected to increase scrutiny and game companies could be held accountable for harming consumers’ rights. Although the concept of dark patterns is not new, it is gaining regulatory attention and games companies should make sure to conduct legal assessment of their games and monetisation techniques to avoid prohibited practices. Best practices in this context include presenting key terms upfront, obtaining assertive and informed consent, and enabling customers to easily unsubscribe/cancel subscription or purchases. Even higher attention should be paid when the game is likely to attract minor players.
• Review your monetisation practices: Monetisation in games is under increased scrutiny, especially following the BEUC’s complaint on in-game purchases. Developments in the EU and globally are to be expected and games companies are advised to assess whether their in-game currencies are designed fairly.
• Consult experts during your M&A processes:  Entering an M&A can be an overwhelming process for companies, especially for those approaching it for the first. Companies should ensure confidentiality during the due diligence process, including by signing airtight NDAs. Another key aspect of a successful M&A process is to make sure to select the right experts to assist you as this will ensure to save time and reduce costs. Given that IP is the core asset of every game company, a careful review of ownership rights will be a vital part of due diligence process.

Looking forward 

In light of the increased regulatory attention in the digital and consumer protection sectors, game companies should proactively monitor regulatory changes and conduct thorough legal assessments of their practices.  This approach can help navigate the evolving landscape effectively and ensure compliance.

This first Legal Summit was a success and we are looking forward to the next edition!