Navigating the EU’s Digital Markets Act and its implications for the game industry

Chris Hewish

The introduction of the European Union’s Digital Markets Act (DMA) holds significant implications for the gaming industry. Like a legendary weapon in the hands of an underdog hero, the legislation aims to slay the giant tech gatekeepers - such as Apple, Google, and Meta - to restore balance in the digital sphere. With its guidelines set to redefine the landscape and foster fair competition, the DMA aims to address the dominance of large tech companies and respawn the landscape for game developers and publishers. But for this to be achievable, they must have a firm grasp of the legislation’s nuances and implications so they can strategise appropriately.

Creating a Fairer Future in Gaming

The DMA is more than just a set of principles to follow. It’s driving a narrative toward a promising and optimistic future where fairness triumphs over monopolistic competition. For a long time, the big tech giants have been known as the “gatekeepers” for digital services. This means they’ve been the core platforms for hundreds of thousands of consumers because they’ve been the most accessible.

However, the DMA acts as the stone that allowed David - or the smaller players - to reign triumphant over Goliath - the giants. With the imposed rules and regulations that the industry must now follow, it creates a level playing field where smaller, independent players have the opportunity to compete. The principles the gatekeepers are now asked to comply with are set out in a simple list of “do’s” and “don'ts.”

Some of these “don't” include preventing consumers from linking up to businesses outside their platforms and treating services and products offered by the gatekeeper more favorably in ranking than similar services or products offered by third parties on the gatekeeper’s platform. The “do’s” include allowing third parties to inter-operate with the gatekeeper’s services and allowing business users to promote their offer and conclude contracts with their customers outside the gatekeeper’s platform. In short, they can’t use unfair practices to gain an undue advantage.

But what are the specific benefits of the DMA to the video games industry?

Empowering the underdogs

Video game developers and publishers can now benefit from the digital market ecosystem as they will no longer have to comply with unfair terms and conditions that limit their development. Now that developers and publishers are free from their shackles, app stores—like Apple’s and Google’s—must allow app sideloading on their platforms.

Video game companies can host their apps on their websites, offering consumers direct access to their products or services without intermediaries. For consumers, this has a wealth of benefits. They now have more and better services to choose from, direct access, and fairer prices. No longer bound by the limitations of app stores, they can explore a diverse and dynamic marketplace, finding games that suit their preferences and budget. Video game developers and publishers will no longer be subjected to paying a hefty 27% commission fee to the app stores where they sell their games. Now freed from significant charges, they can retain a greater share of their earnings and reinvest into their passion - their craft.

Another advantage of the DMA is the inclusion of third-party app stores within core app stores. This provision allows game companies to have the opportunity to establish their web shops within platforms like Apple’s app store or Google’s Play Store. This means that when users browse through the app store looking for games, they see offerings from major developers and can peruse titles available exclusively through third-party app stores. For developers, this is a game-changer. They’ll be able to build relationships directly with consumers and engage with them on a personal level, showcasing their portfolio of games and services and adapting to the needs of their audience.

Forging a new path forward in the digital revolution

The European Digital Markets Act is more than another chapter in a series of digital regulations. It heralds a new era of regulation in the digital sphere, which has profound implications for video game developers and publishers alike. By understanding the provisions set out by the DMA and embracing strategic adaptation, video game companies can navigate these changes effectively, fostering competition and innovation. It marks a significant foundational shift in digital markets and services and is paramount in helping to shape a vibrant, equitable, and fairer digital ecosystem for all.

Written by
June 20, 2024
Written by
Chris Hewish