The video game industry has become a significant cultural and economic force, with global revenues reaching over $150 billion in 2021. While the creative vision and technological innovation of game developers have driven the industry’s growth, public policy has also played a role in shaping the development and distribution of video games. And it’s not just those that have graduated with the graduate certificate of public policy that makes these decisions.
In this article, we will explore how public policy impacts the video game industry, including content regulation, tax incentives for development, and issues related to online gaming and net neutrality.
Regulation of content in video games
One of the critical ways public policy impacts the video game industry is through regulating content. The Entertainment Software Rating Board (ESRB) in the US is responsible for rating video games based on age-appropriateness, with categories ranging from E for everyone to M for mature audiences. These ratings help parents and other consumers decide which games are appropriate for different age groups.
However, some governments have further restricted the sale and distribution of certain video games, often those featuring extreme violence or sexual content. For example, video games with excessive violence or depiction of Nazi symbols are banned in Germany. These restrictions can limit the freedom of expression of game developers and restrict the types of content that are available to consumers.
These are probably the most common forms of policy affecting video games, and while we might assume that many of them were simply implemented by governments, this isn’t the case. The general public can largely influence policy for media such as video games and movies. This could come from concerned parents or lobby groups that are opposed to specific imagery in the media.
Tax incentives for video game development
In addition to regulating content, governments worldwide have also used tax incentives to attract video game companies to specific regions or countries. These incentives, such as research and development credits or reduced corporate tax rates, can take various forms. The goal of these incentives is often to create jobs and stimulate economic growth in the local area.
However, the effectiveness of these incentives is often disputed. Some argue that they provide a necessary boost to the industry, while others argue that they primarily benefit large, established companies rather than smaller, independent developers. Additionally, there may be unintended consequences, such as distorting competition or creating an uneven playing field for companies that do not receive the incentives.
Online gaming and net neutrality
Online gaming has become an increasingly important part of the video game industry, with millions worldwide playing games together over the internet. Ensuring fair competition and access to these games requires a level playing field, with all players having equal access to internet resources. This principle is known as net neutrality.
However, government policies and regulations related to net neutrality have the potential to impact the video game industry. For example, if internet service providers (ISPs) are allowed to prioritize certain types of traffic or charge higher fees for faster access, this could create an uneven playing field for online gaming. On the other hand, strict net neutrality rules may also limit the ability of ISPs to manage their networks effectively, potentially impacting the quality of online gaming experiences.
The relationship between public policy and the video game industry is complex, with various potential consequences depending on the specific policy approaches taken. While regulation of content and tax incentives can shape the types of games developed and where they are made, issues related to online gaming and net neutrality can impact the distribution and accessibility of these games. It is important to consider the impact of public policy on the video game industry and the potential benefits and drawbacks of different policy approaches.