Written by : Ankita Sambyal on Digilah (Tech Thought Leadership
Who isn’t fond of video games? From teens to adults, isn’t it? Some play video games as a source of living or to relieve stress.
The genesis of video games dates back to their early development when a human being used to interact with a massive video device and an analog remote to give commands to the machine to move a pixelated character.
The earliest recorded U.S. video game patent dates back to 1948, known as the ‘Cathode-ray tube Amusement Device.’ Some of the earliest video game examples include the Nimrod Computer, a massive machine weighing over a ton, as well as Oxo (1952), Tennis for Two (1958), and Spacewar (1961).
However, these early video games were not available for public purchase due to their immense size and high costs.
The evolution in video game technology has witnessed the progression from classic games like Mario to multiplayer gaming and now to the concept of metaverse gaming.
Ralph Baer, the Father of Video Games, played a significant role in advancing the Gaming Industry.
In 1967, he invented the prototype called the ‘T.V. Game Unit #1,’ followed by other inventions like the ‘Brown Box Light Gun’ and the ‘Pump Unit’ in 1967-68. In 1972, Baer introduced the Video Game Console named “Odyssey.”
The Global gaming industry experienced substantial growth, with a valuation of USD 231.34 billion in 2022 and a projected value of USD 353.35 billion over the next five years.
The year 2023 shows promising developments, including the introduction of generative AI support that simplifies gaming development and increased investments in the metaverse.
In contrast, the Indian gaming industry was valued at USD 2.8 billion in 2022 and is expected to reach USD 5.0 billion by 2025.
Considering the exponential growth of the gaming industry, it becomes crucial to establish and enforce regulations to protect the interests of players.
These regulations should focus on promoting fair play, ensuring player safety, safeguarding minors, protecting intellectual property rights, and preserving the confidentiality of data and sensitive personal information of gamers.
Additionally, such regulations should consider the financial interests of both the gaming industry and the players.
“Most Parliamentarians don’t have a clue as regards the challenges or the opportunities the games industry faces” – David Puttnam
A videogame can be classified on the basis of mode: –
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- Online Games
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- Offline Games.
Further, Online and Offline Games can further be classified on the basis of interaction: –
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- Game of Skill
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- Game of Chance.
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- A Mixture of Game of Skill and Chance.
On 6th April 2023, the Ministry of Electronics and Information Technology of India proposed Amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which gives a comprehensive framework for Online Gaming Ecosystem, however, these amendments still fail to address the vital connotations of the Gaming Industry.
Although, the endeavour has been made through implementing these Amendments to define and explain the terms like “Online Game” (Sec. 2(qa)), “Online Gaming Intermediary”(Sec. 2(qb)), and “Online Real Money Game” (Sec. 2(qd)), however, the definitions and explanations are not comprehensive enough, and there is still a significant gap in the interpretation of these terminologies to fit in the practicality of today’s gaming that we are witnessing in and around.
In 2020, the Federation of Indian Chambers of Commerce and Industry (FICCI) in partnering with Ernst & Young (EY), released a report stating that USD 817 million has been garnered by the Indian Online Gaming Industry, which involved real-money transactions which depicts that 71% of Indian players are involved with ‘Online Real Money Gaming’.
Therefore, Regulators need to take a nuanced approach while defining online games and should consider different examples and illustrations to help clarify the distinction between games of skill and games of chance.
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- In situations where monetary transactions are involved in an online game (skill-based or chance-based), it is crucial to adopt a risk-based approach and enforce mandatory KYC verifications for the players utilizing that platform. Additionally, the platform should implement restrictions on financial transactions based on spending limits to ensure responsible and controlled monetary involvement.
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- The legislative amendment should provide clear and detailed explanation of fraudulent activities, that occur in the virtual realm, including services that hijack gaming accounts, theft of virtual identities, fraudulent manipulation of in-game items, cheating and hacking through the use of bots, deceptive game modification, Phony Game Currency Sellers, etc.
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- The legislative amendment should provide detailed and clear distinction of gaming intermediaries and their roles involved in the virtual realm such as online gaming platforms, game developers, publishers, marketplaces etc. along with their roles and responsibilities such as hosting game servers, game distributors, facilitating communication among players, offering customer support etc.
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- The gaming platforms must be legally obligated to provide clear and explicit information on their websites regarding the nature of the game mode in which the player is engaging, distinguishing it is primarily based on skill, chance or a combination of both. By doing so, they will ensure transparency, promote user awareness, and facilitate a fair gameplay environment in compliance with legal requirements.
“The people are pieces of software called avatars. They are the audio-visual bodies that people use to communicate with each other in the metaverse.” – Neal Stephenson
As we have transitioned from traditional gaming to more immersive and interactive experiences facilitated by VR Headsets, we may also witness the emergence of evolved forms of criminal activities in this virtual space.
Some Countries like Hong Kong are policing the Metaverse to design ‘user safety’ and to educate the public about the potential dangers associated with Web 3.0 and the Metaverse.
In conclusion, it is imperative for India, which is having a base of 421 million of online gamers and is likely to reach over 442 million by the end of 2023, needs to take a thorough revamp of its gaming regulations to encompass games such as Blockchain-based gaming, Metaverse Gaming.
By proactively, embracing and regulating these advancements, can help protect consumers, prevent problems of gambling, and ensure a fair and level playing field for all participants that can help India to position itself as a leader in effectively overseeing the Gaming Industry.
This strategic approach will ensure that India remains competitive and doesn’t lag behind in effectively policing the dynamic and evolving gaming landscape.
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