Governance Challenges in the Global Games Industry

Mr. Darryl P. WOODFORD
Postdoctoral Research Fellow, ARC Centre of Excellence for Creative Industries and Innovation, Queensland University of Technology, Australia

Current governance challenges facing the global games industry are heavily dominated by online games. Whilst much academic and industry attention has been afforded to Virtual Worlds, the more pressing contemporary challenges may arise in casual games, especially when found on social networks. As authorities are faced with an increasing volume of disputes between participants and platform operators, the likelihood of external regulation increases, and the role that such regulation would have on the industry – both internationally and within specific regions – is unclear.

Kelly (2010) argues that “when you strip away the graphics of these [social] games, what you are left with is simply a button […] You push it and then the game returns a value of either Win or Lose”. He notes that while “every game developer wants their game to be played, preferably addictively, because it’s so awesome”, these mechanics lead not to “addiction of engagement through awesomeness” but “the addiction of compulsiveness”, surmising that “the reality is that they’ve actually sort-of kind-of half-intentionally built a virtual slot machine industry”.

If such core elements of social game design are questioned, this gives cause to question the real-money options to circumvent them. With players able to purchase virtual currency and speed the completion of tasks, the money invested by the 20% purchasing in-game benefits (Zainwinger, 2012) may well be the result of compulsion. The decision by the Japanese Consumer Affairs agency to investigate the ‘Kompu Gacha’ mechanic (in which players are rewarded for completing a set of items obtained through purchasing virtual goods such as mystery boxes), and the resultant verdict that such mechanics should be regulated through gambling legislation, demonstrates that politicians are beginning to look at the mechanics deployed in these environments. Purewal (2012) states that “there’s a reasonable argument that complete gacha would be regulated under gambling law under at least some (if not most) Western jurisdictions”.
This paper explores the governance challenged within these games and platforms, their role in the global industry, and current practice amongst developers in the Australian and United States to address such challenges.

Kelly, T. (2010). ‘Ethical Design: Are Most Social Games Just Virtual Slot Machines?’ Retrieved from
Purewal, J. (2012). ‘Some Thoughts about Gacha’. Retrieved from
Zainwinger, V. (2012) ‘What happens when professional gambling meets social gaming’. Retrieved from