Archiv für Juni, 2010

The Future of the Internet (Draft from 2008)

EGDF (draft)

The Future of the Internet,

a contribution to the European discussion on the subject from a game developer perspective.

The aim of this paper is to respond to a number of discussion contexts on the level of the EU as well as within the member states about the future of the internet. These discussions can only be seen in an overall context as regulatory and technical questions are deeply interlinked.

The developers of computer games of Europe are an important element of the internet of the future. Computer games, and especially online computer games should be seen as an important test bed for its evolution concerning technology, business models and cultural questions. Virtual worlds are perceived today as the nucleus of the 3D internet.

Gamers must be seen as early movers in an evolving mass market for technology and communication of the information society. Already today game developers take the user perspective and migrate in large numbers from offline to online distribution (the term digitalisation is not true in this context as computer games have always been digital products).

For European game companies this is an opportunity to overcome distribution bottlenecks from the offline world and to set out new terms of trade, which are from an European perspective in its overall effect more favourable than in the past (this is true for large parts of the media industry). As a result the advantages and benefits of online distribution as a whole outweigh its risks and dangers (e.g. piracy of former offline products). The cultural elements of a new digital art class must not be underestimated; they can become a serious element of the Unions economy.

  1. Regulatory measures


Regulaory measures to manage control better over the internet seem in the first place suitable. The internet should apply to similar rules as does the real world is the basic philosophy. But on the other side the neutrality of the network, the independence of distribution networks and content are a vital element of the free internet. From a European perspective, it is not sure, that the traditional offline distribution models have been worked always to the advantage of European content. This concerns above all questions of placement (shelfspace in the music and games industry, film packages in the TV and cinema distribution etc.) and awareness (cross-promotion, branding etc.). Therefore a thoughtful regulatory approach should not blindly follow the paths of offline distribution and perpetuate distribution bottlenecks and structures from offline to online; the strategy should be to look more intelligently to the advantage of the European content industry at the best of both worlds.  This needs the understanding, that no simple answers are possible, but that we need a thoughtful analysis of the whole media sector, branch by branch and layer by layer.

From a game developer perspective the situation is tricky: For many years European game makers were in the shadow of the international game industry. They could be happy to participate. Now for the first time ever Europeans can enter the world market with online and browser games directly. And they are doing this very successfully. This has a number of reasons; some of them are linked directly or indirectly to the free and uncontrolled aerea of the internet. Here we have the opportunity to bring European content really in a key position. It could be a mistake to sacrifice the neutrality of the network; later the successful growth might be in danger.

The impact of this process on the value chain is in its details is not yet sufficiently explored. What is certain is that the different sectors of the culture economy are changing rapidly. The traditional boundaries between audiovisual media services, print media and offers recipients are blurring. The freedom of the Internet as a new element of the right to informational self-determination belongs not only to users but also to the producers of digital cultural content; they need equally protection. The spirit of the Internet is rooted in its freedom. Its extraordinary – even cultural – innovation comes from there.

An unilateral regulation, which does not take these freedoms into account is permanently weakening the cultural innovation of Germany and Europe.  Therefore it is necessary to take measures only in a multilateral context, such as the OECD or the UN. It must however not happen that unfavorable distribution structures of the off-line world are not perpetuated in the online area.     

    1. Anti-piracy


Piracy is a common threat for all offline media in a digitalised world. Music, films, computergames on traditional discs are shared and downloaded illegally in many cases. It is true, that the content producing industry needs to take the initiative. But it is uncertain, that a too aggressive way, which criminalises end users will actually lead to a long lasting solution. It is now proposed by many to develop technical features which allow the content companies  to force the ISP’s to take a number of piracy – contaminated IP addresses from their servers, after being repeatedly warned. The current discussion follows the lines of legal arguments, which turn around data protection issues as well as the freedom of expression in direct contradiction to the right of property. The actual decision of the European parliament set as a compromise the decision of a judge as a precondition for technical measures.

Online games are the best anti-piracy measure ever. A virtual world is only accessible through login or comparable mechanisms.  They open only, if the user has paid directly (subscription)  or indirectly (item sales). Classic piracy does not exist. Compared with other media (music, film, offline games) online games have already crossed the thresholds of digitalisation.  Even in china, a country with traditionally little enforcement of copyright online games is an important success.     

But can anti-piracy measures really be set up so punctually, that they do not interfere ? Experience shows, that new systems, network neutrality

The transformation process reaches to the roots of Europe. New alliances on very fundamental questions seem to emerge: Old content industries claim, that property of their goods is in danger, IT conglomerates suddenly care for the freedom of expression. The definition of art and culture is in transformation. Do we see the new digital art, which uses the internet and its great freedom as source and inspiration as a threat or as the beginning of a new era, a new paradigm, which will reshape the whole cultural landscape fundamentally? On the other hand it is true, that the worlds order of property brought up from the old ages are the economic basis of the cultural industry until now. Those, who produce games, music or film traditionally (or just write books) have problems in getting orientation in the new distribution contexts. Many vanish – this is not good.

The politically interesting effect is the formation of new alliances. On the one hand you have those, who have been producing cultural products traditionally and are loosing ground on the new forms of internet distribution. These people are often enough critical to society, traditionally libertarian of even leftists. Now they are fighting for more regulation on the internet alongside with world wide cooperation’s and media-conglomerates. All these are at the moment the losers of change.

On the other side stand those parts of the cultural industry, which have already crossed the river, who create their works within and through the free internet. They are along with IT industries, who want cheap and easy content. This scenario is no surprise, and still it is very unusual: The patterns of left and right do not work any more at all. The “traditionalists” see the internet as a danger for their cultural heritage and distribution models, while they disagree fundamentally on politics. The “progress-fraction” seems to be driven by the big IT companies and their perception of freedom seems to be scary. But what is freedom, the freedom the liberals talk about? Absolute freedom would probably lead to anarchy and make the large IT cooperation richer and richer on the back of many content producers. 

The game development industry is in a sandwich position.

Developers of traditional console and PC games already taste the structural change of the industry. Budgets are cut or reduced, collaborators are fired. Off-line distribution of computer games looses ground every day in Europe. This development is only partly due to the financial crisis, it is the underlying change of user behaviours from offline to online – and it is happening today. But many of the distribution and hardware structures were unfavourable for Europe anyway.

Developers of online games and online game publishers on the other side are flourishing. Online distribution is piracy proof and does not need a DRM-system. Online games are a DRM system themselves. Due to very unfair business models from telecom operators mobile games are still not as strong as they should be.  

    1. Protection of minors


Protection of minors for online games is an open unresolved issue. Even countries with strict regulation of offline games (such as Germany and Britain) do not control systematically online games. The global dimension does not allow a simplistic approach.

ISFE and EURO-ISPA have made efforts together with PEGI online to get this under control.

ISFE however is not representing sufficiently online game companies in order to really represent the online game companies. Most of these companies come from Europe, many game developers are transforming into online game companies as they start to publish online themselves. In the old days the publishers (ISFE) took care of youth protection issues, not the developers. But as a result of the blurring value chains, now developers have also to raise their voice in this context. The German age rating agency USK already opened their organisation to the developers. Others will follow.

EGDF proposes to take more responsibility in this context. As the market changes also the perception changes; besides the freedom of speech the freedom of artistic expression might play a more predominant role in the future

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