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Industry faces "significant" regulatory risk following 2019 government inquiry

Combined concerns around bullying and gaming disorder could lead to "badly-informed regulation that damages the functioning of the industry"

In the wake of the British government's inquiry into immersive and addictive technologies last year, the games industry is facing a "significant amount of political and regulatory risk."

That's according to Ben Greenstone, the founder of policy and public affairs consultancy Taso Advisory. Speaking at Pocket Gamer Connects in London last week, Greenstone highlighted problems faced by the games industry in the current political climate.

Describing it as "hostile," he focused primarily on the Department for Digital, Culture, Media, and Sport (DCMS) inquiry. However, Greenstone noted that the current atmosphere of distrust towards video games is nothing new, and it's not the first time regulators have attempted to intervene with the industry.

greenstone

Ben Greenstone, Taso Advisory

In 1981, the member of parliament for South Ayrshire, George Foulkes, introduced the Control of Space Invaders bill to the House of Commons which intended to use licence and planning rules to make it harder to operate arcade machines in the UK. Foulkes claimed that arcade machines would cause children to "'play truant, miss meals, and give up other normal activities," and that the machines profited on "blood money extracted from children's weakness."

Although Foulkes' bill never passed, Greenstone noted that there was a "political incentive to concede to the moral panic from parents, ignoring the lack of any real evidence that arcade games were to blame for anything at all."

The relationship between the video games industry and government hasn't necessarily improved since. But nearly 40 years later, the games industry is a very different beast as we move into an increasingly digital world; this technological change, and the potential impact of data-driven development and monetisation didn't feature in Greenstone's talk.

Arguably its not necessarily relevant, but the games industry now faces historic cultural and institutional bias, combined with the newfound fears of mass data gathering and surveillance capitalism. It is, therefore, hardly surprising that the industry finds itself a target for regulatory reform.

"The problem is that people [like Foulkes] are also the people who get to make the rules and regulations that this industry has to operate in," said Greenstone. "Happily, as I said, Geroge Foulkes' attempt to limit the number of Space Invaders arcade machines in the UK was unsuccessful, but parliament and policy makers can damage reputations and bottom lines if they set their sights on an industry or practice. So it's really important to know what the government and policy makers are thinking."

"Parliament and policy makers can damage reputations and bottom lines if they set their sights on an industry or practice"

There are three primary categories of harm the government considers when defining policy: social, financial, and data. When the DCMS select committee released its final report in September last year, the two most notable recommendations were banning the sale of loot boxes to children, and introducing an industry tax to fund research into the harmful effects of video games. Greenstone didn't offer a generous response or view of the committee and its report. "When confronted with the entirely reasonable response that reality is more shades of grey than black or white... the committee released a damning report with some pretty tough recommendations for the government," he said.

He did, however, elucidate exactly what the committee was considering during this process, and provide insight into what drives government policy. Regarding social harms, wherein the government is mostly concerned with ideas of addiction, bullying, and abuse, Greenstone drew parallels with the moral panic of years gone by where radio was considered a potential social ill.

Combined with the World Health Organisation's gaming disorder classification, and the Children's Commissioner reporting on alleged bullying from peers in games like Fortnite, Greenstone said: "There is a very real risk that if politicians perceive games to be a bad thing, both for individuals and society as a whole, that it could lead to badly-informed regulation that damages the functioning of the industry."

Financial harms, meanwhile, pertain to financial wellbeing, especially around gambling-like mechanics or children spending large amounts of money on their parents' credit card. As one of the most tangible harms, it was something which the committee pressed heavily. In regards to paid-for loot boxes, the potential of financial harm was certainly a key factor of the committee's recommendation to regulate the mechanic under gambling legislation.

"If the government accepts this recommendation, it would mandate the removal of loot boxes from any game for under 18s, and require the developers to apply for gambling licenses," said Greenstone. "Some developers, that might hurt their margins, for others it would of course completely wipe them out." Finally, there are data harms, which have only started to draw more attention from regulators following the Cambridge Analytica scandal; government bodies are concerned with what data is being collected and how it is being used, particularly in relation to minors.

"Simply put, there is a really significant amount of political and regulatory risk for the games industry at the moment"

"The select committee concluded that data on play time and habits collected by game companies for their own commercial purposes, that the businesses are wilfully obtuse in sharing that," said Greenstone.

"The committee believes that data harms play into social harms by what they call 'designed addictions.' Their recommendation was that developers should be required to adhere to a behaviour design code of practice, and that the new regulator for online harms that the government will shortly be introducing should oversee that."

Greenstone criticised the recommendations as placing a financial burden on developers, with "no obvious proof that this will help even the user, or indeed the society more broadly."

He added: "Simply put, there is a really significant amount of political and regulatory risk for the games industry at the moment."

However, Greenstone was quick to add that it's not all doom and gloom; this situation, "no matter how hostile," has the government talking and thinking about video games, and what can be done to make the industry more successful.

Moving forward, he recommended that game companies stay updated with political opinion, assess their own practices, and use solid evidence-based approach in lobbying politicians and policymakers to show what the industry does well.

The "most important" step any industry can take though, said Greenstone, is engaging with the government to help create a regulatory system that works.

"Offer government and politicians solutions," he said. "Government has only so many people, and politicians have only so much bandwidth. They want to be able to show progress, and demonstrate positive impact that takes the heat off them. So offering solutions that are workable for the industry is a fantastic way of effectively mitigating regulatory and political risk."

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Latest comments (10)

Ian Griffiths Product Owner, Hutch4 months ago
The DCMS panel was staggeringly hostile to industry representatives. Why we should have been surprised with a panel whose name had pre-concluded that technology was addictive before any evidence had been shown. It was like going to a 'You're guilty of murder' panel and expecting to come out with anything other than a damnation of your very existence.

The irony over claims the government cares about data and surveillance given that for years they built up a database of nude images from every webcam sexting over Yahoo video chat - https://www.theguardian.com/world/2014/feb/27/gchq-nsa-webcam-images-internet-yahoo

The same government whose Met Police are being allowed to roll out facial recognition across London. These are the people lecturing us about privacy!

Let's be clear; this is a moral panic with the same lack of evidence, the same non-issues and the same fervour of bothered adults upset about what kids are up to these days.

Edited 2 times. Last edit by Ian Griffiths on 27th January 2020 7:21pm

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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development4 months ago
The same government whose Met Police are being allowed to roll out facial recognition across London. These are the people lecturing us about privacy!
That's a false equivalence.
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Ian Griffiths Product Owner, Hutch4 months ago
@Keldon Alleyne: Unless you can give a reason for why it's a false equivalence I'm just going to disagree.

The panel includes members of parliament and was chaired by Damian Collins. As an MP, Mr. Collins is directly responsible for voting on laws in the House of Commons that have reduced the privacy of British Citizens - https://www.theyworkforyou.com/mp/24744/damian_collins/folkestone_and_hythe/divisions?policy=6751

As the civil service takes its direction from the government who take no issue with facial recognition and have not mentioned a single concern about its affects on privacy. So we can easily see the hypocrisy in the current government suggesting it cares in the slightest about the privacy of its citizens.

In fact I would go one further and say the state only cares about power being out of its hands with politicians frustrated that people willingly give over what they have to forcefully collect from people; their data.
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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development4 months ago
@Keldon Alleyne: Unless you can give a reason for why it's a false equivalence I'm just going to disagree.
*Sigh*

The police are also allowed to carry weapons in public, handcuff citizens, and even imprison them for committing crimes while individuals and corporations don't have those same privileges.

I'm sure you can do the math.

Edited 1 times. Last edit by a moderator on 28th January 2020 10:24am

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James Batchelor UK Editor, GamesIndustry.biz4 months ago
Gentlemen, as much as we appreciate you have opposing views on this subject, we do ask that you keep things civil.

Please remind yourselves of our house rules: https://www.gamesindustry.biz/articles/2014-10-20-our-house-rules

Edited 1 times. Last edit by James Batchelor on 28th January 2020 10:28am

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Ian Griffiths Product Owner, Hutch4 months ago
@Keldon Alleyne: I don't think it's reasonable to imply emotes like *sigh* and say things like "you can do the math" as though there is only one reasonable conclusion to be had. I'm treating you with respect and not making rude and insulting comments, I expect the same in return.

I don't think that the police holding weapons is a reasonable comparison. First I would point out that they use those weapons in a targeted way against people who pose a risk to others. I would also include that in many instances they use those weapons unreasonably with lethal effect on innocent people so it's not as if there's not an issue with them, some examples:
Ian Tomlinson - https://www.bbc.co.uk/news/uk-10728685
Thomas Orchard - https://www.theguardian.com/uk-news/2019/may/03/police-fined-235000-over-death-of-thomas-orchard
Jean Charles De Menezes - https://www.independent.co.uk/news/uk/crime/seven-mistakes-that-cost-de-menezes-his-life-1064466.html

Weapons and physical force aren't a good comparison with surveillance as a violation of privacy. Surveillance, in of itself, is a violation of privacy if consent is not given, it's a moral violation if targeted to stop wrong doing, as is the use of physical force. The problem with this type of state surveillance is that it's indiscriminate; violations of privacy are carried out without the state having to justify reasonable cause of wrong-doing.

So again, I would assert that if the panel and by extention the government actually 'cared' about surveillance and how it violates the privacy of citizens it wouldn't use and continue to expand drag-net surveillance of the people.
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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development3 months ago
Edit: I apologize for coming across as rude if you genuinely cannot see it and your question came from a genuine need to understand why.
--

When I say so the maths I don't mean to suggest there's only one way of looking at it.

For example I can do the maths and see where you're coming from, so I'd never think there's no reason at all to see it your way.

It shouldn't require agreement of a position to be able to derive it.

I'm well aware of the issues and the potential for abuses of both physical force and surveillance.

I do see a high risk of future governments extending the application from terrorism and violent crime to an extent I would be in serious disagreement with.

I don't trust them with that power myself because of it.

What makes it a false equivalence if the inherent need of policing and police powers, which includes surveillance (whether that's police being present in high crime areas physically, or doing the exact same thing, only remotely and not limited by time and space via the use of surveillance equipment and technology to assist the process).

Again, this need exists independent of one's position on policing and surveillance. There is a genuine motivation for the benefit of the public good, which I do recognize can also be abused and used inappropriately, and is subject to technical shortcomings and even biases forming in the software (already discussed by machine learning experts).

One needn't be blind to the potential of harm and abuse to recognize the inherent public need it fulfills.

A company has no equivalent role or responsibility whatsoever, which is what makes it a false equivalence.

There is no valid argument for it being equivalent, because it requires denial of the inherent public need for it, for which no equivalent public need exists in the case of privacy laws for companies.

I wasn't merely trying to insult or be rude. There just is no valid case for them being equivalent, regardless of one's opinion of governments, police and authorities.

You mentioned morality. That would come down to application.

You don't want to be captured in film. I don't want to be mugged at knifepoint, for which surveillance is a strong deterrent. We have different preferences.

I can see where you're coming from and would never pretend I cannot see it at all. You should be able to equally do the same and connect the dots rather than ask for an explanation of the obvious.

Edited 1 times. Last edit by Keldon Alleyne on 31st January 2020 11:49am

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Ian Griffiths Product Owner, Hutch3 months ago
@Keldon Alleyne: All I'm asking for is a reasoned comment in the first reply rather than a simplistic - it's obvious. It's not obvious and I detailed why.

Now, we probably just disagree on this but let me point out where I disagree with you.

First, the inherent needs of the police isn't a given category of tools and behaviours. Police presence is very different from drag net surveillance. The police can't come into your house and photograph all of your things, your contacts book, a list of friends, pictures you hang up on your wall and this is well established. When it comes to the digital world they do precisely this. Something that wasn't previously required or used for addressing crime has become the norm. And yet, the state hasn't proven the efficacy of this, let alone had a debate whether it's worth the cost of violating people's privacy and how that may affect their behaviour. This is not benign and we're one of the only countries with this level of surveillance, and yet our crime rate remains higher than many without it.

As far as a companies' roles and responsibilities; they are required to collect and store data by law. And they are required to run as effectively as possible by law which may include collecting and analysing data of this type. In any case, their 'need' and responsibilities are irrelevant; they have made a willing contractual agreement with the consumer. It's no different to a contractual agreement with which a shop gives me a sandwich when I hand them money - I chose to participate in the activity.
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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development3 months ago
Police presence is very different from drag net surveillance.
Agreed, hence my expressed concerns.
This is not benign and we're one of the only countries with this level of surveillance, and yet our crime rate remains higher than many without it.
Murder in rich countries (per 100k capita):
1. US - 4.88
2. Canada - 1.68
...
6. UK - 0.92

Source: Bloomberg

Springer -- https://link.springer.com/article/10.1007/s10610-017-9341-6
tl;dr "CCTV was classified as being useful in 72,390 investigations—29.4% of all recorded crimes and 64.9% of crimes for which CCTV was available"

Naturally other factors such as socioeconomics, social mobility, geography and transportation, and criminology come into play. Suffice to say, one would need to make a strong case to refute the Springer article.
It's no different to a contractual agreement with which a shop gives me a sandwich when I hand them money - I chose to participate in the activity.
Purchasing a sandwich is an extremely simple transaction. An eatable sandwich in exchange for cash. The problem with data is when it is used in unexpected ways (i.e. Cambridge Analytica). That's remarkably different. I'm 99.9% sure that not a single person played those games with the expectation it was being used to psychologically profile them to manipulate their voting decisions and behaviours. Nor are most people even remotely aware how analytics has been used to manipulate purchasing behaviours, or that they had unwittingly also signed themselves up to be cold called by a companies they didn't want to cold call them.

Yes, companies are requied to make a profit. I've no dispute about that. That doesn't mean that anything they do is just, nor does it mean every transaction was done with the consumer being sufficiently informed of the ramifications (which is what the problem is). It's hard to make a case for this being equivalent to purchasing a sandwich.

Edited 1 times. Last edit by Keldon Alleyne on 31st January 2020 2:31pm

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Ian Griffiths Product Owner, Hutch3 months ago
One thing I forgot to add. Not only do I see a strong argument that they are equivalent, I would actually argue that the state's surveillance is worse.

I'd also say that the very act of surveillance is a violation of privacy and thus it's immediately a question of morality.

Last, yes, there may be a cost to surveillance and it may lead to more crime. Perhaps we could reduce all crime by having cameras recording everyone at all times in all places, but clearly there's a balance to be had.

And as you're talking about countries by their murder rate - http://worldpopulationreview.com/countries/murder-rate-by-country/
"Japan (0.2)
Singapore (0.2)
China, Hong Kong (0.3)
Luxembourg (0.3)
Indonesia (0.4)
Norway (0.5)
Oman (0.5)
Switzerland (0.5)
United Arab Emirates (0.5)
China (0.6)"

These countries all have a lower murder rate than the UK and a number of them have far less surveillance. So it's not simply a case of more surveillance being the best solution to the issue.

I'm not arguing whether companies are acting justly, I'm saying that they're acting in a free agreement with the consumer. Again, we're just probably going to remain in disagreement.
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