Games and Metaverse issues

The infrastructure prerequisite. For the metaverse to be an alternative to the real world, it’s going to have to resemble it with almost complete verisimilitude. Luckily, there is no need for governments to pour trillions of dollars into this sort of infrastructure. The processor and graphics technologies have been incentivized by a red-hot video games market for years, and today we inch closer and closer to absolute realism. Intellectual property and licensing issues will increasingly dominate the conversation as publishers and console manufacturers design and build with those technologies.

Because video games can be seen as prototypes for the metaverse, it is impossible to escape the inherent limitations of that model when applied to a vision of interoperability. In some ways, the NFT and related tokenization issues are relatively more solvable than those that relate to the underlying infrastructure of the metaverse. Do we have any more reason to believe that the metaverse will resemble one planet on which all human life can love, hate, fight, reconcile, exploit, and heal than we believe one gamer account (e.g., its crypto wallet) can be used across all games and all platforms? It is the promise. The intellectual property and attendant license are far more likely to result in multiple metaverses, divided at least by platform configurations if not also by content, genres, and publishing rights. The profit incentive that has ignited the development of the technology will be the very reason the technology will form walls around competing worlds. In this sense, the video game model for the metaverse foretells the limits that are baked into the infrastructure that will form the metaverse.

There may be those who envision a metaverse that transcends the boundaries of jurisdiction and platform, but they will run headlong into the reality of intellectual property, antitrust, privacy regulation, and the capitalistic spirit that has powered the video game industry for decades. And, speaking of power, the infrastructure for the metaverse is again going to bring with it questions about the energy usage required to run the processors and graphics chips. Video games and the infrastructure providers who pave the way for the next generation of games and, perhaps, some version of the metaverse again provide a useful guide. Energy usage and issues surrounding sustainability and conservation will become distinguishing factors for companies competing for adoption in games and platforms. With public opinion on a global basis appearing to bend toward a joint goal of sustaining our planet, those seeking to drive the video game experience toward complete immersion will likely need to consider how to be ecologically responsible (both in terms of energy usage and use of sustainable construction materials) rather than just create larger and more voracious appetites for the Earth’s resources.

Human nature and the limits of moderation. Another lesson from the online world of video games is that unchecked, they can devolve into dangerous places. The recent adoption of the Digital Services Act in Europe has been hailed as the biggest change to internet laws in a century - placing an onus on all streamers and user-generated-games companies to protect their users, and in particular children, from harassing, bullying and harmful content. This EU initiative will complement other initiatives taken by other jurisdictions who are likely to be measured against the new EU standard.

In the UK, the Information Commissioner’s Office Age Appropriate Design Code, which became effective in September 2021, focuses on the processing of personal data of children (up to the age of 18) and recommends certain default settings for services that are likely to appeal to children, including taking into account the best interests of children when designing any data processing in services; providing a child-appropriate service to all users by default, with the option of an age verification mechanism to enable adults to opt out of these safeguards; identifying the ages of children by using robust age-verification measures; providing all relevant privacy information, clearing terms, and community standards by using age-appropriate design codes and appropriate content presentations that can be easily read and understood by children; and prohibiting the use of data that is detrimental to children’s physical or mental health and well-being, or goes against industry codes and government regulatory provisions.

In Germany, the Federal Protection of Young Persons Act (Jugendschutzgesetz ‒ JuSchG), effective from May 2021, is aimed at the protection of children and young persons against harm resulting from media use and to ensure that media is only distributed or made available in accordance with the applicable age rating. This includes media and other publications with, among other things, immoral and violent content; presentation in detail of acts of violence, murder, and massacre for their own purpose; or a recommendation of the “law of the jungle” as the only proven tool by which to obtain supposed justice.

In the United States, the Child Protection and Sexual Predator Punishment Act (CPPA) and amendments via the Securing Adolescents From Exploitation-Online Act (SAFE) create several duties for online service providers, including a duty to report evidence of apparent child exploitative activities of which the provider becomes aware. The penalty for knowingly and willfully failing to report can result in an initial fine of $150,000 with subsequent violations carrying a fine of $300,000.

The law provides a limitation of both civil and criminal liability for providers performing reporting or preservation responsibilities under the statute. Beyond this specific law that focuses on sexual predators who might be engaged in criminal acts in a context such as a virtual world, the U.S. Congress appears to have an appetite to revisit section 230 of the Communications Decency Act. Possible changes to section 230 could include incentives for online platforms to address illicit content and create exemptions for immunity in the areas of child abuse, terrorism, and cyber stalking.

The world of video games is increasingly being subjected to governmental oversight to address online harms – at least in the context of children and teens. We have also seen signs in some countries that suggest a willingness to push more liability onto platforms if their programmatic moderation mechanisms fail to moderate content that is deemed to be offensive or unlawful. The fact that dangers can present themselves in various interactive media contexts, including interactive video games, and that regulators in many countries have taken affirmative steps to address them suggests that the metaverse would be subject to similar considerations.

Yet, in the metaverse, it is unclear whether governments could reasonably seek to regulate or promote the sort of moderation that they currently do in the context of video games. If the concept of “platform” becomes fully decentralized, what liability could attach to a foreign developer who does not impose anti-online harm moderation? Would national regulators need to engage in the virtual world, almost like Agent Smith in The Matrix? The limitations of moderation in a decentralized metaverse conception pose interesting questions about the governance of the world we are building for our children.