Latest legal trends in gaming
Hall & Wilcox Partner James Deady discusses key legal issues facing the multi-billion-dollar gaming sector, including venture capital investment and M&A activity, data, privacy and cyber issues and ACCC regulatory enforcement.
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[Transcript]
[James Deady:]
What are some of the key issues facing gaming sector?
Globally, it’s really about the growth of the gaming sector. You know, it’s forecasted that by 2026 it will be worth $320 billion US dollars. But I think it’s also not just about growth in terms of the numbers, it’s also growth in terms of the diversity of gaming businesses. So, we’ve seen, traditional gaming like platform games and PC and consoles, but now it’s mobile gaming, it’s virtual reality, it’s e-sports, and it’s gamification, it’s game integrated NFTs.
We’ve seen a lot of international gaming players looking to acquire Australian gaming businesses.
In terms of what a gaming industry business should be aware of for an M&A or a capital raising, preparing can be really valuable. And that might involve looking at your structure, making sure it’s attractive to an investor or an acquirer. Looking at your IP protection, having a look at whether that’s appropriately protected. Is it in the right entity within the corporate group? Your customer contracts and your supplier contracts. Are they well documented? What about your employment policies and arrangements, are they fit for purpose? So, really, I think by doing that preparation work you can put yourself in the best possible position when that opportunity does arise for an M&A transaction.
Gaming businesses collect, use, store and manage lots of personal information and data these days. Therefore, making sure that you comply with the privacy laws, you’ve got cyber response and processes and policies in place and that you can respond to and deal with cyber breaches and cyber incidents is really important. We’ve seen both internationally and locally recently the impact that a data breach can have on an organisation, whether it’s the recent Uber breach internationally or the Optus breach locally, they can be really significant impacts for a business.
The ACCC has been pretty active in the gaming space recently around consumer law enforcement. They’ve taken action against Steam, Sony, Zenimax and EB Games in relation to a variety of consumer law issues in the gaming sector. And so, it’s really important to make sure that the marketing materials and your interactions with customers are compliant with the consumer law and reflect the expectations that the regulator has around consumer law as well.