Archiv für November, 2009

Game developers and DRM

During recent years European Commission has placed more and more focus on online content, which has made it a topic of contemporary political debate. European Games Developer Federation has participated actively to this discussion and in 2008 we published this statement concerning creative content online in a single market. The statement can be found as a pdf-file from this link.

EGDF welcomes, in principle, the efforts of the European Commission to better regulate the field of Online Content Distribution. This has grown significantly throughout recent years, while regulatory measures are still discussed. EGDF therefore supports the idea of a continuous update of the media research backing regulatory activities.

Concerning the introduction of DRM systems EGDF wishes to underline that these systems are often seen with great skepticism. In general the DRM system problems are more political and economical than technical. They are by many seen as a means to leverage barriers-to-entry and key strategic positions in offline distribution systems, perpetuating them into the era of online distribution. Hoping for seamlessly interoperable proprietary solutions, that compete and provide reliable DRM protection at the same time, is not very realistic. Competing standards linked with license business models will not bring the considerable changes envisaged.

In order to grow the market, most likely only open and free standards will make a difference to the SME’s that produce content and offer it for direct distribution online. In general, it seems necessary that the Commission insists on an open standard, and at the very least opens discussion on this option with the industry. Whilst important, it is not enough to better inform consumers, to introduce standard labels, standard end-user contracts, or other means for making DRM systems more transparent to the end user.

At their opposite ends of the value chain, the content producers and the empowered end-users need a reliable, open, and free end-to-end scenario. Non-discriminatory access and treatment needs to be enforced and permanently secured in every link of the value chain, and this can only be guaranteed by the public sector.

The games marketplace is today controlled by non-European companies and most of our members do most of their business in the Dollar-zone. Online distribution has much stronger network effects than physical distribution, especially when protected by proprietary platforms and proprietary DRM systems. In consequence the so called winner-takes-it-all phenomenon will become even stronger, and this is happening right now. In order to establish a competitive, level playing field on the content production side, it is necessary to support those who still try to compete in the sector from a European point of view.

Online distribution provides enormous opportunities for opening up the market for new, creative, quality driven and European content, but only if our policy makers help ensure fair trading practices, something that is lacking today. Issues regarding of multi-territory licensing play a very minor role in today’s computer games business. The main actors are all global already, with vertically integrated, or fully controlled, distribution channels. This may change in the future.

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Media 2007 and the game challenge

Media 2007 programme is now almost three years old and it is not exactly what we hoped it to be. The full statement from 2005 can be found from this link.

The game development must be embedded in the audiovisual system, as creativity and visualisation are nowadays severely touching these grounds. Europe is undergoing tremendous changes also in a cultural manner: The importance of games rises as games conquer living rooms and leave the computer corner of an household. This influence of games on our culture is permanently increasing as games are becoming a very important market and an even more important part of nowadays culture for children, teenagers and adults. This means that Game development becomes more and more important to our cultural heritage as they are used by the masses. In the near future, games will probably have a lead- medium function, which is currently still held solely by TV.

But beyond the cultural importance, the European Game Developers are striving to be a competitive industry in our information society to counterbalance the influence from the American and Asian continents. Developers of games are one of the fastest growing industries within the entertainment business. Unfortunately for the time being most of this money leaves the European continent.

The game developers are mostly dependent of having an international Publisher. The Publishers are consolidating and not leaving much room for new developers for the time being. We have to work for better conditions for the European games Industry so they can better handle the overwhelming size of competitors from the other continents:

    In the development program there should be a special chapter for Games. We suggest that the Multimedia chapter be divided into 4/5 Game development and 1/5 other Multimedia projects.

  • In the development funding we propose to focus especially on prototype development. We propose to distribute the money by slates of up to 100.000 € and additionally to provide financial support for console development by taking charge of costs for development kits, surroundings and middleware licences up to additional 35.000 €. In the development funding, the limits for the development of a game prototype should correspond to the limits of a pilot in animation (100.000 € by now).
  • Concerning intellectual property rights, we underline the standpoint, that for the good of the developers the Media Plus money may only intervene when the rights to the title lies at the developers side.
  • The criterion “story based” is sometimes not valid and should not be used any more. There are games, which are not story based (e. g. motor races or sports games). They should not be excluded.
  • In the distribution funding we consider it valuable to open this up for games as well as the promotion funding in especially cultural matters.
  • The support of promotion should be open for games and the participation for markets and festivals should also be open for the Game Industry.
  • In the training section games on console, pc and mobile should be taken into consideration.
  • Pilot projects should involve b-to-b solutions.
  • The evaluation of the Media Funding should specify the last investment by country and size of the company and should specify the amount of money spent on game development.
  • The data base on games should be improved by special reports of the European observatory.
  • For the process of administration, which is perceived as being very long and complicated we suggest a two step system. The first step should demand as little information as possible and the project should be evaluated by a Software Evaluation tool in general (one week). The second step should demand all the necessary information and the evaluation should be made by experts (one month).
  • The game sector can help the Media Program to improve their position in not favourised regions and among small and medium sized companies
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Audiovisual Media Services Directive enters into force

The Audiovisual Media Services Directive (AVMSD) has to be transposed in national law by the end of 2009. Thus it good time to remind about the concerns EGDF had, when the directive was introduced. Full statement can be found from this link.

The impact of games is growing in technological and economic terms, but most important of all, in the field of culture. Like films, games are a cultural asset. In a converging environment, Games will develop a leading quality. The impact of Games in technological and narrative terms in the near future must not be underestimated, as they have already influence on contemporary society. Hence, Games are not only of technological and economical importance; they represent a significant audiovisual medium.

Although online games might fall into the limits of the directive, they were not considered in the legislatory process. As a consequence, there will arise a number of practical problems in terms of implementation. The TV directive as legislation for the TV medium might be insufficiently adjusted to the needs and business models in the sector of interactive media. That fact leaves the topic open to questions.

Independent Producers

The directive will have effects on the position of independent producers. These do not only exist in the area of linear media. In the field of non-linear media, independent content producers have a solid impact on technological and cultural innovation as well as cultural diversity. Games are subject to similar mechanisms as cinema in their production structures. The creative part of game development will be effectuated by SME’s as major companies will avoid the too big and imponderable risk of development.

The equal treatment of linear and non-linear services/providers is not kept up: Independent TV producers, as an example, enjoy privileges. For the field of non-linear services/providers, the support of independent producers would have to be seen similarely.

Scope of Application

The assignment of online Games to the area of audiovision is to be rated positive. The phenomenon of the cultural reference of Games and its rapid ascent in the near future has to be taken into consideration. Not only are there cross-references to the culture of the respective member states to be found in games. Games also have a great impact on the cognitive and thinking processes within a society. So far, this value-shaping character was exclusively assigned to the consumption of linear media. This has changed fundamentally.

While the member states go to great lengths to provide public TV and film funding to ensure cultural and medial diversity, similar efforts are not made yet for the production of games. In the light of market dynamics and the minor importance of European games on the global market, this aspect is particularly unsatisfying. The importance of independent production becomes even bigger when the fact is taken into consideration that most of the technology carriers do not hail from Europe.

The argument of linear media having a greater impact on society because a multitude of people are faced with the same content at a given time cannot hide the fact that linearly transmitted media transform more and more into background media. At the same time interactive devices come to the fore, due to the fact that they offer a higher attention stimulus for the users. In a public domain subject to structural change, the widening of the scope of audiovision is only consistent to secure the objectives of the directive, i.e. media pluralism in a democratic Europe.

Advertising Rules and Product Placement

The cultural impact of Games goes without saying. On the other side, there is the danger of over-regulation. A newly emerging market could be strangled by a too tight net of rules even before it had the chance to get established. Hence, a restriction of product placement in the sector of interactive media must be declined. The introduction of fundamental qualitative interdictions (e.g. for tobacco products) would be acceptable at most, as far as the legal operative area in this matter up to now is subject to a non harmonized national legislation in the respective European member states.

A regulation beyond that aspect – as to be found in the current version of the TV directive for TV – must be judged overambitious and uncomprehensive. Fresh business models will establish new opportunities for independent developers, especially at this stage of market development. That way business models could help to shift the balance of power within the value chains slightly in favor of game developers. This can only be realised by leaving sufficient operating space for the latter, which until now seems to be within the bounds of possibility. In this respect, an over-regulation could possibly prove counterproductive at this stage of market development.

From our perspective it is sufficient for the game sector to introduce an additional icon containing product information, in correspondence with a product placement announcement in the credits of the game. A general notice in the credits on the advertisments contained will prove sufficient to protect legitimate consumers’ interests. Extended notice would annoy consumers and make games less attractive. As the choice is given to the player to interrupt sequences and information early has widely gained the status of an industry standard, this should go for commercials as well.

Protection of Children and Young People in the Media Sector and Structures of

The preservation of an individual system for Games and films should be maintained in the process of putting the harmonization of the protection of children and young people in the media sector into practice. Dealing with interactive media requires specific media experience and knowledge of the subject, preconditions that are by far not self-evident in the remaining media sectors. As a matter of fact, the film control mechanisms for adolescents are different from those of the Pegi or USK. With a standardization, the particular subject knowledge of the different commissions would be void.

Some member states provide the strictest directives for the protection of children and young people in the sector of online and games. If the principle of national regulation should remain as it is, there would arise a competitive disadvantage in a competitive system, as manufacturers would make use of the principle of origin by sidestepping to European countries where they are met with less requirements. This way, location and tax deficits are to be expected that are unwanted. Hence, a differentiation of the principle of origin exceeding the present version of the TV directive is recommendable. The different cultural traditions in a diverse Europe have to be taken into account in the process of the factual standardization of protection directives. The standardization of a factual framework in accordance with individual cultural and institutional features in this respect would be welcomed.

As far as the requirements of the EU TV directive are concerned, the employment of instruments of selfcontrol and co-regulation in the realisation process of the directive is to be promoted strongly. Care should be taken that this is covered by the definition of co- regulation.

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Game development technologies in Europe

Although this statement was written three years ago, many parts of it are still relevant. Full text can be found from this link.

The games industry is a growing industry in a growing market and will remain in growth for the next years as its audience grows older as well. Games are probably the killer application of the new converging media fields. The public is often unaware just how strongly the games industry technology drives the development of the technologies and networks.

Computer games represent a significant cultural phenomenon. The implications of this development on the media culture are still hard to grasp and – above all – mainly unexplored. Therefore it will be important for Europe to have a positive attitude about games, so that they can be integrated properly into the regulation and support initiatives of the information society. But it is also important to assure the European approach of cultural diversity in a changing business scenario and to make sure that SMEs have their proper revenue in the value chain. While public television stations and film funding systems make sure that a certain diversity and quality is taken care of, none of such measures is still in place for this sector.

Game development as content creation

If anything is relevant to describe the new era, then it is the redefinition and flexiblisation of barriers between content and technology. Creation of content is a subject for technology issues in the same way as technology issues are increasingly content issues. This is especially true for the development of games.

The vision is that tools and middleware for content creation are developed – ‘European’ open source, if possible – to easen the access for content creation to the various platforms and render the European content more independent from overseas propetary soft- and hardware. Multiavalibility of content from multiple sources implies both higher diversity and standardisation.

As transaction costs are going down, the value of the content itself becomes more and more central and content will have a higher impact on the whole value chain. Especially content – based SME’s use more and more open software standards to narrow the gap to the big players. In the market of content creation SME’s will continue to dominate the community as big groups usually are uneager to face the uncertainty of development risks and have problems to mobilise sufficient personal motivation of their staff.

Network effects and economies of scale can contribute to the fact that inferior technologies supersede by establishing a standard. It is possible, that those companies, who have already a dominant position, will be taking their dominant position to bring it to other markets. If the standardisation will be from outside Europe, the status quo will even deteriorate. The dominance of other world regions in this sector has to do with their part in bigger homogenous markets, closer relations to hardware manufacturers and other factors. It has little to do with skills, ability or know-how of European content producers, but with a given environment.

The gateway

Game terminals will become one if not the key terminal in the integrated world of networked electronic media. All the console manufacturers are currently preparing for this development as the game consoles have a much larger market penetration than any TV Set Top Box or Living-Room Media PC has ever had or ever will have. They will be the first and set standards concerning technological questions but also concerning formats and genres – e.g. standards in the way how the mass market will perceive and treat information.

There is no European console. This has economic consequences: Gaming terminals are produced overseas. Monopoly like systems lead to drawbacks for the continent and only very few enterprises, who have gained influence and reputation with the console manufacturer companies, can gain access to consoles early in the market cycles. Naturally the manufacturing companies have closer ties to the development and publishing enterprises in their own home markets.

This is also of political and cultural importance. The biggest and most underestimated effect of this development will be the impact on the content. The content provided will have to please the platform owners to be visible. This not only has an impact on issues like cultural diversity, but also on freedom of expression, information etc. This also has major technological implications for Europe. With the increasing importance of game terminals for networked electronic media, Europe is in danger to completely loose track to the key technologies of the future.

In general , the emphasis of the strategic software decisions must be in favour of ‘European’ open software and open source. Europe is not a leader in this industry, and as a result open software can help us to advance quicker, as the creative communities do not have to spend a large part of their development budgets on licences for middleware tools.

The most important issue is the question of technological and legal obstacles to place a game on a game terminal. These obstacles must be analysed in depth and solutions must be found to overcome them. It is not sure that financial support alone can help in this situation, this question definitely also has a regulatory dimension.

The ubiquitous game

Innovation in game genres includes the development of completely new kinds of games based upon pervasive and ubiquitous computing environments; these games represent an area of high innovation and commercial potential unconstrained by significant entrenched business models and commercial structures. Innovation in engine technologies, architectures and production systems can feed into these new markets as well as into existing markets for contemporary computer games.

In the users area games will become the most important entertainment fields over the next ten years. Their impact on society will be constantly growing – mainly outside of public regulation. Communities will be content-driven, not platform driven. For communities the genre – orientation will remain an important element, but experience shows that games cross genres. New games or inventions of new types of genres can be very successful in a limited number of cases.

Two types of business strategies are emerging.

The technological cutting edge of strategy with qickly raising production costs, high personnel and strong power requirements is targeting mainly the mass market. This will be very expensive and therefore only produced by very few. Many of these productions might eventually not come from Western Europe.

The other will be the small business case. Here we will eventually see some games similar to arthouse films. Produced on a small budget, highly content – related, and original with a smaller target group. Technically they will have to rely more strongly on open source elements because they cannot afford to use commercial and expensive game middleware (which is key to work in a content-driven manner). These productions are a chance for Europe and these products will be the trigger of content- wise innovation (similar to the film industry today) and eventually inspire the mass-marketers.

Research and game development

The essence of game development is research. Game research can provide technical innovations supporting new game features and concepts, by investigating new markets and player groups and their design requirements, and investigating new game concepts by the production and evaluation of demonstrators. Traditional industries like the automotive industry or construction industry call upon game developers to solve their simulation requirements.

Some research topics cover the following elements. Man-machine interfaces will change and in concequence the logic of media consumption will be different. In this context we require tools to reduce costs in order to automate processes. Technologies such as automated (procedural) content creation are emerging and will gain importance. Personalization and Service, agent techniques are annother important subject. 3D graphics, physics and artificial
intelligence (AI) research, as well as gaming theory as such are also highly relevant topics.

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