On September 17, the European Commission released a draft of the so‑called EU KIDS Act – an acronym for Keeping Internet Digital Spaces Accountable and Trustworthy. While the most hotly debated provisions target social networks and video‑sharing services – including an outright ban for users under 13 and tighter controls for those under 15 – a substantial portion of the text also reaches into the realm of online games, artificial‑intelligence companions, chat‑bots, app stores and operating systems.

This article breaks down the sections that directly affect the gaming sector and explains what developers may need to adjust if the regulation becomes law. ### Scope and Reach If the act is adopted, it will apply to every online game that is offered to consumers inside the EU.

The definition of “online game” is deliberately wide, potentially covering everything from sandbox platforms like Roblox to the multiplayer component of a traditionally single‑player, disc‑based title. Only games that are sold purely on physical media and have no online functionality are clearly excluded. A gray area emerges for titles that are not marketed in the EU but still attract European players through foreign storefronts such as the US Apple App Store.

The draft does carve out an exemption for services whose primary purpose is educational and that are run by schools or similar institutions, as well as for certain not‑for‑profit platforms. ### Protecting Minors from Excessive Play The act defines “minors” as anyone under 18 years of age. Under this definition, providers must take steps to ensure that their products do not actively encourage prolonged or compulsive use by young people. Features that reward players for logging in daily, or that penalise them for taking a break – for example, loss of bonuses after a period of inactivity – are likely to be deemed non‑compliant when the audience includes minors.

While a clever technical workaround might be imagined, the spirit of the legislation is clear: any mechanic that nudges children toward habitual play will be viewed unfavourably. ### Impact on Loyalty and Daily‑Reward Systems These considerations intersect with ongoing debates about age‑rating systems such as PEGI in Europe and USK in Germany. The KIDS Act is less subtle than those rating frameworks; it forces developers to ask a broader question: instead of merely asking whether a game offers a daily reward, designers must evaluate whether the entire experience pulls minors back on a regular schedule.

In persistent‑world games, the very design of a continuously evolving world can act as an implicit incentive to log in frequently, even if no explicit bonus is offered. This shift makes compliance assessment more complex and may require redesigning progression loops, event timers, and other time‑based hooks. ### Communication Restrictions and Age‑Verification Another core requirement concerns interaction between minors and other users. Game providers will need to implement parental‑control tools and age‑assurance mechanisms for any online feature that could expose children to other players.

The obligations for games are somewhat lighter than those imposed on social platforms, which must use a dedicated EU‑wide age‑verification system. Game developers may rely on proportionate methods such as age estimation, third‑party verification, or consent‑based data sharing from app stores, provided these solutions respect privacy, avoid discrimination and are demonstrably accurate. Simple self‑declaration will never be sufficient.

### Codes of Conduct and the PEGI Framework The draft also proposes a “Code of Conduct” for age‑rating and online‑game practices, aiming to transform the largely voluntary PEGI system into a legally binding regime. This raises questions about the interaction with national youth‑protection laws. Germany, for instance, already has a robust legal framework that gives the USK (the industry‑run rating body) statutory authority.

The KIDS Act appears to limit the USK’s role in regulating excessive usage and open communication, potentially creating a jurisdictional tug‑of‑war between EU‑wide rules and existing national legislation. Historically, youth protection has been a competence of member states, but the EU is increasingly seeking harmonisation. ### Transparency of Virtual‑Currency Transactions Recital 40 of the proposal states that minors should receive clear information about the real‑world monetary value of virtual‑currency purchases and be shielded from variable‑reward mechanisms. This language targets loot‑box‑style monetisation, echoing concerns raised in the BEUC report and the CPC’s Key Principles.

However, the draft is inconsistent: the explicit economic‑transaction obligations are placed in the operative sections for social networks, AI companions and chat‑bots, but not for games themselves. It is unclear whether the EU intends to address game‑related monetisation solely through the proposed Code of Conduct or if a later amendment will embed stricter rules directly into the act. ### AI Companions and Conversational Chatbots A novel element of the KIDS Act is the regulation of “general conversational chatbots” and, specifically for the gaming sector, “AI companions.” These systems must avoid design choices that foster emotional dependence, and they may not, by default, retain personal data from prior interactions with minors unless it is needed for safety.

When AI companions are embedded in games that are delivered via a social‑network or video‑sharing platform, the act imposes additional safeguards: the AI must not be auto‑activated, must not be prominently displayed, and minors must be able to opt‑out at any time. Not every AI feature in a game will fall under the “AI companion” definition.

The key test is whether the system simulates or facilitates a social or emotional relationship with the actual user, rather than merely with a fictional player character. Large‑language‑model‑driven non‑player characters that converse with the avatar, not the person behind the screen, could arguably be excluded.

Yet the wording also captures technologies that simply enable such a relationship, potentially widening the net. ### Content‑Control and Interaction Tools The act mandates that providers supply minors with robust content‑control tools, allowing them to filter, manage and give feedback on the material they encounter.

These tools must have immediate effect and remain persistent. Additionally, interaction controls must let young users adjust how they communicate, create content and engage with other players. All safety mechanisms, informational prompts and user‑interface elements required by the KIDS Act must be easy to find and understandable for children.

### Enforcement Landscape For most online services, enforcement will fall under the existing EU Digital Services Act (DSA). However, AI companions and chat‑bots are subject to the separate AI Act regime.

Non‑compliant operators could face fines up to 6 % of global annual turnover. Each EU member state will need to designate a regulator responsible for overseeing game‑related compliance.

### Timeline and Likelihood of Adoption The KIDS Act is drafted as a regulation, meaning it would apply directly in all member states without needing national transposition. The text is still a proposal and must be approved by both the European Parliament and the Council of the EU. Historically, the legislative process from first draft to final adoption takes one to two years, but the Commission appears to be pushing for a faster schedule. Given the intense focus on regulating social media worldwide, the act is unlikely to be abandoned; it may even be fast‑tracked.

### Practical Takeaways for Developers Game studios should start evaluating their current features against the draft’s criteria: 1. **Audit loyalty mechanics** – Identify daily‑login bonuses, streak rewards, or penalties for inactivity that affect minors.

2. **Review communication pathways** – Ensure chat, voice and friend‑request systems have age‑appropriate safeguards and parental‑control options. 3. **Map AI usage** – Classify any conversational AI as either a simple NPC or an “AI companion” and apply the stricter rules where needed.

4. **Implement transparent monetisation disclosures** – Even if the act’s economic provisions are not yet binding for games, adopting clear pricing information for virtual goods will align with the spirit of the legislation. 5. **Prepare for age‑verification integration** – Work with app‑store partners to receive verified age data, or adopt a privacy‑preserving third‑party solution.

By addressing these areas now, developers can reduce the risk of costly redesigns later and demonstrate a proactive commitment to child‑safety, which may also be a market advantage. *Dr. Andreas Lober is a partner at ADVANT Beiten, advising leading game companies on youth‑protection and consumer‑law matters. He acknowledges contributions from colleagues Lennart Kriebel and Fabian Eckstein.*