How the Digital Markets Act Impacts Mobile Game Developers

The European Union's Digital Markets Act, passed in November 2022, has been hailed as a significant regulatory update aimed at rebalancing the digital landscape. As the effects of the Act begin to take shape, it's essential to understand what this means for the games and interactive entertainment industry. The Digital Markets Act introduces new competition rules targeting large digital platforms, known as 'gatekeepers,' to ensure fairness and contestability in digital markets. The Act's primary objective is to curb the power of these gatekeepers by imposing a set of prescriptive rules on their core platform services, such as mobile app stores and operating systems. Seven companies have been designated as gatekeepers, including Google, Amazon, Apple, and Microsoft, with 24 core platform services identified. The most immediate impact of the Digital Markets Act on the gaming industry is likely to be in mobile gaming, particularly in terms of app distribution and payment systems. The Act requires mobile gatekeepers to allow developers to create alternative app marketplaces and distribute their games through sideloading or third-party marketplaces. This change has already led to the introduction of new app stores on iOS devices, such as the AltStore and the Epic Games Store. Additionally, the Act mandates that mobile gatekeepers provide fair and reasonable access to their app stores, which could lead to reduced commission rates on in-app purchases. The Digital Markets Act also provides significant opportunities for game developers in terms of offering and purchasing content on mobile devices. Mobile gatekeepers must allow developers to inform users about offers available outside of their ecosystem and facilitate transactions. Furthermore, gatekeepers are banned from requiring developers to use their proprietary billing systems for in-app payments, allowing for alternative and potentially cheaper billing options. The Act also prioritizes data protection, prohibiting gatekeepers from using non-public information obtained from developers to compete against them. Moreover, gamers can now request the transfer of saved data between different ecosystems, and gatekeepers must provide developers with more useful data insights and analytics. To comply with the Act, Apple and Google have introduced new functionality and APIs to facilitate data portability and provide more detailed analytics to developers. The Digital Markets Act also aims to impact the early stages of game development by providing new technical opportunities. Mobile gatekeepers must offer free and effective interoperability with their operating systems, hardware, or software features, enabling developers to create games that are fully integrated into the gatekeepers' operating systems. The Act also removes policies that force developers to build web experiences using the gatekeeper's proprietary browser engine, opening up greater functionalities for web-based app games. While the Act is a significant regulatory update, national competition authorities, such as the German Federal Cartel Office, are also taking proactive steps to enforce digital platform regulations. The UK has also introduced its own platform regulation, the Digital Markets, Competition and Consumers Act, which will introduce a new 'Strategic Market Status Regime.' As the gaming industry adapts to these changes, it's essential for businesses to understand the new rules and regulations to take advantage of the opportunities they present. The Digital Markets Act and comparable national rules are set to have a lasting impact on the mobile gaming industry, with new payment options, third-party app distribution, and greater control over data becoming a reality. As the industry navigates this new landscape, it's clear that the game is on, and only time will tell who the ultimate winners will be.