- Biological Inventions
- Brand Valuation
- Celebrity Rights
- Company Act
- Company Law
- Competition Law
- Constitutional Law
- Consumer Law
- Copyright Infringement
- Copyright Litigation
- Corporate Law
- Digital Media
- Digital Right Management
- Educational Conferences/ Seminar
- Environment Law Practice
- Farmer Right
- Fashion Law
- Foreign Law
- Gaming Industry
- Geographical Indication (GI)
- GIg Economy
- Hi Tech Patent Commercialisation
- Hi Tech Patent Litigation
- Intellectual Property
- Intellectual Property Protection
- IP Commercialization
- IP Licensing
- IP Litigation
- IP Practice in India
- IPAB Decisions
- IVF technique
- Khadi Industries
- labour Law
- Legal Issues
- Lex Causae
- Live-in relationships
- Lok Sabha Bill
- Marriage Act
- Media & Entertainment Law
- Member of Parliament
- Mergers & Acquisition
- News & Updates
- Non-Disclosure Agreement
- Online Gaming
- Patent Act
- Patent Commercialisation
- Patent Fess
- Patent Filing
- patent infringement
- Patent Licensing
- Patent Litigation
- Patent Marketing
- Patent Opposition
- Patent Rule Amendment
- Pharma- biotech- Patent Commercialisation
- Pharma/Biotech Patent Litigations
- Posh Act
- Protection of SMEs
- Section 3(D)
- Social Media
- Sports Law
- Stamp Duty
- Stock Exchange
- Surrogacy in India
- Telecom Law
- Trademark Infringement
- Trademark Litigation
- Traditional Knowledge
The inconspicuous global ascendancy of the gaming industry has evaded widespread acknowledgement. From being traditionally perceived as a mere juvenile pastime, gaming has transformed into a colossal economic entity, commanding a staggering valuation of USD 232.02 billion in 2022, with projections anticipating its triumphant crossing of the USD 500 billion milestone by 2030. Talking about India, the industry has secured a substantial sum of USD 2.8 billion, exhibiting a stupendous growth trajectory of 30%. Beyond its economic prowess, gaming has emerged as a hub of pioneering innovations, captivating numerous conglomerates and esteemed entities seeking to harness its burgeoning potential. Interwoven with domains like artificial intelligence, metaverse, and virtual reality, gaming exudes a magnetic allure. The advent of noteworthy contenders in nascent industries invariably sounds the clarion call of competition, and the gaming sphere is no exception. Hence, it becomes increasingly imperative to preempt unbridled competition within the relevant markets. This exposition meticulously delineates the trajectory of gaming’s expansion while fervently advocating for a proactive framework of competition oversight within this burgeoning marketplace.
Level Up: Enhancing Competition in the Gaming Industry
The gaming industry has evolved into an arena where titans of the market, namely Microsoft and Sony, engage in fierce competition. These industry giants, renowned for their Xbox and PlayStation consoles respectively, dominate the gaming console market. Recently, Microsoft has embarked on a colossal USD 68.7 billion acquisition of Activision Blizzard, a move poised to confer upon it substantial market control in the domain of cloud gaming. This acquisition also grants Microsoft a commanding advantage over its competitors, Sony and Nintendo, by securing its dominion over immensely popular gaming titles such as Call of Duty. The regulators entrusted with overseeing this transaction are embroiled in a divergent stance, with the United Kingdom’s Competition and Markets Authority (CMA) expressing opposition, while the European Commission espouses a favorable view.
The crux of the concerns surrounding this agreement pertains to Microsoft’s prevailing dominance in the realm of cloud gaming and the potential deleterious consequences on competition in the realm of PC and console game distribution, should the acquisition materialize. Furthermore, apprehensions have been voiced regarding the potential curtailment of innovation and the limited choices available to gamers as a consequence of this deal. Sony, as a direct competitor of Microsoft, has voiced anxieties that the accord potentially grants Microsoft the leeway to augment the pricing of Call of Duty and restrict its accessibility solely to its Xbox Game Pass subscription service.Additionally, there are apprehensions that Microsoft may undermine the quality and performance of Call of Duty on the PlayStation platform, eroding the trust bestowed by the gaming community in PlayStation as the preferred conduit for experiencing the game. In response to these concerns, Microsoft has sought to remedy the situation through behavioral measures, including the provision of 10-year licensing agreements, thereby ensuring that European consumers can continue to access forthcoming titles on a cloud-gaming service of their preference.
Instances of competition concerns are not confined solely to this scenario. Sony has been embroiled in allegations of leveraging its dominant position by imposing excessive prices and imposing inequitable terms and conditions on developers seeking to sell games on its PlayStation store, encompassing a uniform 30% charge. Similarly, the European Commission has levied penalties on Valve for engaging in geo-blocking practices, whereby cross-border sales of games were restricted based on the geographic location of users. Another intriguing case study unfolds in the form of Epic v. Apple, where Apple compelled app developers to utilize its payment service for transactions on the App Store, and imposed a commission fee of up to 30%. These instances collectively illuminate the vulnerability of the gaming industry to potentially anti-competitive conduct, a trend that appears to be escalating over time.
Breaking the Chains: Promoting Competition in Exclusive Gaming Franchises
Given the gaming industry’s notable evasion of regulatory scrutiny, particularly concerning competition law, an environment has emerged wherein exorbitantly priced video games prevail, potentially exploiting consumers. Within this realm, fierce competitions unfold among rivals, vying for licenses, many of which bear an exclusive nature. Acquiring licenses to incorporate widely recognized characters, franchises, teams, or universes empowers developers to fashion games that captivate both existing and prospective players, conferring a formidable competitive advantage over their counterparts. Consequently, these contests have elicited the withdrawal of franchises from the market, inducing a decline in competition. For instance, following the departure of Pro Evolution Soccer, EA FIFA has achieved overwhelming dominance in the domain of football video games. Such monopolistic standings are typically accompanied by maltreatment of consumers, as the dominant enterprise becomes nonchalant towards their needs while continuing to amass substantial profits. This pattern is evident across various video game sectors encompassing basketball, Formula 1, and WWE games.
Intense rivalries between gaming franchises engender a responsive and innovative market, amplifying the interests and aspirations of the public. Furthermore, the realm of gaming is subject to the phenomena of network effects, wherein nascent consumers exhibit an inherent proclivity to integrate themselves within the preexisting fabric of the well-established gaming community. Furthermore, the demarcation of relevant markets tends to accord unparalleled preeminence to the most favored game within a given genre. Consequently, in cases wherein access to a specific gaming series is foreclosed or discriminatory conditions are imposed upon platforms facilitating game purchases, the precise delineation of the relevant market necessitates meticulous definition. In light of the fact that a football series cannot be substituted by a non-football game, particularly considering the existence of an entire gaming community dedicated to that specific genre, viable substitutes are conspicuously absent. Unsurprisingly, exclusionary conduct invariably begets elevated concentration levels and dominant standings for popular franchises, thereby situating them in super-dominant positions within their respective relevant markets. Consequently, these practices within the gaming industry warrant the discerning gaze of the Competition Commission of India (CCI) to engender augmented competition throughout the industry.
Unleashing Potential: Promoting Competition for Indian Gaming Start-Ups
The gaming industry assumes a pivotal role as a substantial contributor to the economy, and the amicable presence of robust and spirited competition invariably bestows immeasurable benefits upon the market. Within the Indian context, considerable emphasis is placed on promoting indigenous gaming start-ups, thereby necessitating a concerted effort to forestall any possible anti-competitive ramifications. The OECD, in its sagacious assertion, has duly recognized the potency of competition law as an effective instrument in advancing public policy objectives. In this vein, a proactive competition law framework stands poised to facilitate the entry of small, independent developers into the gaming industry, effectively thwarting any pernicious barriers to market access that may be orchestrated by dominant industry players, mirroring the aforementioned instances involving Microsoft and Sony. Such barriers could encompass onerous licensing agreements, exclusive partnerships, or pernicious pricing strategies. By eliminating these deleterious anti-competitive practices, competition law ensures that aspiring developers are endowed with an equitable opportunity to unveil their creative works to the market, thereby competing based on the merits of their ingenuity and the quality of their offerings. Notably, the CCI possesses the prerogative to independently scrutinize any anti-competitive conduct, as sanctioned under Section 19(1) of the Competition Act, 2002 (Act).
The purview of the CCI extends to the examination of agreements within the gaming industry, as delineated under Section 3 of the Act. For instance, the CCI may meticulously evaluate vertical agreements forged between game development studios and console manufacturers through the discerning lens of a rule of reason analysis. Such an evaluative approach enables the CCI to comprehensively assess the holistic impact of said agreements, as mandated by the precise tenets of Section 19(3) of the Act, duly accounting for both the pro-competitive advantages and the potential anti-competitive ramifications. This ardent assessment serves as a litmus test to ascertain whether such agreements bear an appreciable adverse effect on competition. Moreover, the activities of dominant market players fall within the purview of the CCI’s investigative powers, should there exist reasonable suspicion of their abuse of a dominant position. Of noteworthy mention is the fact that Section 4 of the Act eschews differentiation between exploitative and exclusionary conduct, thereby encompassing both categories of actions if they can be ascribed to a dominant enterprise. Ergo, the CCI is bestowed with the authority to thoroughly scrutinize cases wherein exclusionary behavior or the curtailment of market access, exemplified by the earlier elucidation concerning football games, or the imposition of exorbitant pricing by Sony, manifest. Furthermore, the CCI retains the prerogative to examine combinations within the gaming industry, congruent with the evaluations undertaken by esteemed entities such as the CMA and the European Commission, as exemplified by the consequential appraisal of Microsoft’s acquisition of Activision Blizzard. The factors considered by the CMA and the European Commission evince a close alignment with the analyses encapsulated within Section 20(4) of the Act, consequently intimating that any scrutiny undertaken by the CCI vis-à-vis the gaming market is poised to adopt a commensurate approach.
The fundamental objective of this discourse lies in illuminating the inherent susceptibility of the expeditiously burgeoning gaming industry to potentially anti-competitive maneuvers. Moreover, the article ardently advocates for the efficacious establishment of active competition oversight mechanisms, engendering a judicious curtailment of market impediments while zealously safeguarding consumers from exploitation. By duly acknowledging the remarkable trajectory of growth and the boundless prospects permeating the gaming sector, it becomes patently clear that proactive measures assume indispensability in fortifying the marketplace against any semblance of anti-competitive conduct, thereby fostering an equitable and just commercial milieu.
 Gaming Market Size, Share and Trends Analysis Report by Device (Console, Mobile, Computer), By Type (Online, Offline), By Region (North America, Europe, APAC, LATAM, MEA), And Segment Forecasts, 2022-2030 (Grand Review Search) <https://www.grandviewresearch.com/industry-analysis/gaming-industry> accessed 9 October 2023
Pooja Yadav, ‘Explained: How Rapidly Is The Gaming Industry Growing In India’ (Indiatimes, 1 January 2023) <https://www.indiatimes.com/explainers/news/how-rapidly-is-the-gaming-industry-growing-in-india-589059.html#:~:text=The%20Indian%20gaming%20market%20is,hit%20500%20million%20by%202025> accessed 1 October 2023
Microsoft to acquire Activision Blizzard to bring the joy and community of gaming to everyone, across every device (Microsoft, 18 January, 2022) <https://news.microsoft.com/2022/01/18/microsoft-to-acquire-activision-blizzard-to-bring-the-joy-and-community-of-gaming-to-everyone-across-every-device/#:~:text=Microsoft%20will%20acquire%20Activision%20Blizzard,revenue%2C%20behind%20Tencent%20and%20Sony.> accessed 28 September 2023
 Eddie Makuch, ’37 Countries Have Now Approved Microsoft’s Deal To Buy Activision Blizzard’ (Gamespot, 22 May 2023) <https://www.gamespot.com/articles/37-countries-have-now-approved-microsofts-deal-to-buy-activision-blizzard/1100-6514380/> accessed 20 September 2023
 Darryn Bonthuys, ‘ Microsoft’s Acquisition of Activision Blizzard Has Been Blocked In The UK’ (Gamespot, 26 April 2023) <https://www.gamespot.com/articles/microsofts-acquisition-of-activision-blizzard-has-been-blocked-in-the-uk/1100-6513583/> accessed 18 September 2023
 Microsoft/ Activision deal prevented to protect innovation and choice in cloud gaming (GovUK, 26 April 2023) <https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming#:~:text=The%20CMA%20has%20prevented%20Microsoft’s,over%20the%20years%20to%20come> accessed 15 September 2023
Tom Warren, ‘Sony is worried that Microsoft will sabotage Call of Duty for the PlayStation’ (theverge, 8 March 2023) <https://www.theverge.com/2023/3/8/23630700/sony-microsoft-call-of-duty-sabotage-cma-documents-activision-deal> accessed 25 September 2023
 Adam Clark, ‘ Microsoft’s Activision Deal Has Split Regulators. That’s Bad News for Big Tech’ (barrons, 22 May 2023) <https://www.barrons.com/articles/microsoft-activision-blizzard-regulator-uk-eu-stock-a2c0c930> accessed 17 September 2023
 Alex Hern, ‘Sony could face £5bn in legal claims over PlayStation game charges’ (theguardian, 22 August 2022) <https://www.theguardian.com/technology/2022/aug/22/sony-could-face-5bn-in-legal-claims-over-playstation-game-charges> accessed 10 September 2023
 Antitrust: Commission fines Valve and five publishers of PC video games € 7.8 million for “geo-blocking” practices (Europa, 20 January 2021) <https://ec.europa.eu/commission/presscorner/detail/en/ip_21_170> accessed 13 September 2023
 Epic Games, Inc., v. Apple Inc., Case 4:20-cv-05640-YGR (2021)
 Stacey Henley, ‘Games are too Expensive these days, for everyone’ (thegamer, 1 May 2023) <https://www.thegamer.com/video-games-too-expensive-make-develop-buy/> accessed 28 August 2023
 Shane Clancy ‘PES vs FIFA: How the battle for licenses intensified’ (insidersport, 3 September 2023) <https://insidersport.com/2019/09/03/pes-vs-fifa-how-the-battle-for-licences-intensified/> accessed 20 August 2023
 Robert O’Connor ‘How FIFA Crushed PES to Become the Undisputed King of Football Video Games’ (bleacherreport, 29 September 2017) <https://bleacherreport.com/articles/2735656-how-fifa-crushed-pes-to-become-the-undisputed-king-of-football-video-games> accessed 27 August 2023
 Why does EA sports have the worst customer service ever (answershq, January 2019) <https://answers.ea.com/t5/Other-FIFA-Games/Why-does-EA-sports-have-the-worst-customer-service-ever/td-p/7389405> accessed 17 August 2023
 Cameron Swan, ‘ Without Battlefield, Call of Duty Doesn’t Really Have Any Major Competit1
 Top 10 Games Development Companies in India 2023 (hindustantimes, 6 October 2022) <https://www.hindustantimes.com/brand-stories/top-10-game-development-companies-in-india-2023-101665062708656.html> accessed 20 August 2023
 The Goals of Competition Policy (OECD, 1 December 2022) <https://www.oecd.org/competition/the-goals-of-competition-policy.htm#:~:text=Most%20jurisdictions%20have%20embraced%20some,action%20of%20various%20market%20participants> accessed 5 August 2023
 Competition Act 2002, s. 19(1).
 Competition Act 2002, s. 3.
 Competition Act 2002, s.4.
 Competition Act 2002, s. 20(4).