Cloud Gaming and the Changing Landscape of the Video Game Industry

The video games sector is currently the largest entertainment sector, both in the UK and globally. This exceeds both music and video-on-demand, sectors that have recently dominated much of the policymaking and academic discourse around the digital entertainment industries. Gaming is now increasingly ubiquitous, taking place on games consoles and PCs, as well as mobile and smart devices. Games are offered as premium titles, bundles of content available to subscribers, and, increasingly, in streamed gaming that takes place entirely in the cloud. The rapid evolution of the video games landscape poses myriad questions that are of interest to CREATe researchers in respect of: business model innovation, implications of closed/open gaming ecosystems for cloud gaming, intellectual property and player creativity, and numerous other themes.

The games industry shares some common traits with other, longer-established copyright-intensive media sectors such as music, literary publishing, and TV production. Underpinning much of what these sectors do, are business models based on exploiting intellectual property and the development of valuable brands and franchises. The transition of video games from an industry primarily concerned with the sale of discrete products, towards an industry based on providing access to bundles of streamed content has obvious parallels with many other sectors. This presents a host of questions about the implications of the turbulence created by these fundamental shifts in the games sector, and the business models employed by significant market actors.

Changing business models and industry power dynamics affect the choices, preferences and rights of creators, users and consumers. Identifying the core business models and revenue-generating activities of prominent industry actors, such as Apple, Google, Microsoft etc. is far from straightforward. While each may provide similar products and services, the incentives of each company are likely to differ considerably due to fundamental differences in underlying business models. This has potential competition law implications in concentrated markets where verticality and horizontality of ownership by very large operators is a feature of the market. The effect of this and the implications for games developers, publishers and players alike has attracted the attention of competition authorities in the UK and beyond.

As the games sector continues to evolve apace, the project will engage with and interrogate many of the issues identified here. The project launched  on 17 February 2023 at a workshop bringing together copyright and competition lawyers with industry participants to engage with issues around ‘Copyright, Competition and Business Models in App Stores and Gaming’. More information on the key themes of the project can be found here.