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Current and Emerging Issues for the Classification of Video Games In interactive games & entertainment association CURRENT & EMERGING ISSUES for the Classification of Video Games in New Zealand IGEA Suite 145, National Innovation Centre Australian Technology Park 4 Cornwallis St, Eveleigh NSW 2015 www.igea.net [email protected] @igea_oz /igea.net IGEA (Interactive Games & Entertainment Association) is an independent industry association representing the business and public policy interests of New Zealand and Australian companies in the computer and video game industry. Its members publish, market, develop and/or distribute interactive games, entertainment content and related hardware. CONTENTS Executive Summary 2 Introduction 5 The current gaming environment 6 Devices and Platforms 6 Game Consoles 6 Acquisition of games and game content 7 Boxed games 7 Digital download 7 Point of sale digital downloads 8 Subscription 8 Episodic games 9 Free-to-play, Freemium and In Game Purchases 9 How games are played 11 Traditional gaming 11 Motion sensing 11 Multi-screen gaming 11 Cross-device play 11 Companion applications 11 Online multiplayer 11 Augmented reality 12 Virtual reality 12 Overview of Game Classification in New Zealand 13 Classification and labelling of video games 13 Distribution of objectionable video games 13 The Classification Process for Video Games 14 Administration, operation and enforcement of the Act 14 Emerging Issues 15 The high frequency and volume of digitally distributed games 15 Uncertainty for Digitally Delivered Video Games 16 Unfair application on New Zealand distributors 18 The Act is not evolving with international classification practices 19 Classification Fees are Unreasonable 20 Free-to-play games 21 Episodic Games 21 The Film and Video Labelling Body and Online Content 22 Reform of Australia’s Classification Scheme 24 Recommendations 25 Conclusion 25 Current and Emerging Issues for the Classification of Video Games in New Zealand 1 interactive games & entertainment association EXECUTIVE SUMMARY Ninety four percent (94%) of New Zealand With the average age of the New Zealand households currently have at least one gamer being 34 and 48% of New Zealand device being used for playing video gamers being female,4 the games industry games1, with many of these houses is constantly being driven to develop new (69%) having two or more game playing technologies and experiences to support devices.2 Video games are being played a broadening demographic. The most on more platforms and devices than ever popular titles still rely on the traditional before, with game experiences often game controller or keyboard and mouse, converging across multiple types of however motion sensing technologies, EXECUTIVE SUMMARY devices and being enjoyed by multiple augmented reality, virtual reality, multi- generations of New Zealanders, often screens, cross-device and online simultaneously. PC and game consoles multiplayer are quickly gaining popularity. continue to be the dominant type of game device used in New Zealand homes and The current classification system in this trend is expected to continue with New Zealand is primarily based on the the market’s renewed demand for PC structure and approach prescribed by games and the recent release of the next the now repealed Video Recordings Act generation of game consoles. 1987 which came into force at the end of October 1987 - when games were only The Internet has changed how consumers sold in boxes and commercial digital acquire video games and game content. distribution was not envisaged. It is not While boxed products remain the primary surprising therefore that the application of distribution method for AAA games, New Zealand’s classification system on the other distribution methods are quickly rapidly growing video game market and gaining momentum. Digital distribution digitally distributed games has caused models (for computers, game consoles a wealth of issues for the interactive and smart phones), subscription models, entertainment industry, including: episodic games, free-to-play and in- game purchases are several examples 1. Inability to manage the high of the new distribution models that frequency and volume of digitally have emerged and that are expected to distributed games - While the Office dominate the gaming landscape. In 2014, of Film and Literature Classification 77% of video game content sold in New currently classifies less than 80 video Zealand was digitally delivered3. games per year, in 2014 almost 140,000 games were released in Apple’s App Store and thousands more on other digital platforms such as Android and 1 The terms ‘video games’, ‘games’, ‘interactive games’, Steam. The current classification system ‘interactive entertainment’ and ‘computer games’ are all is simply unable to keep up with the references to ‘video games’ as that term is defined in the Films, Videos, and Publications Classification Act 1993 high frequency and volume of digitally 2 Brand, J. E. & Todhunter, S. (2015). Digital New Zealand distributed games. 2016. Eveleigh, NSW: IGEA. http://www.igea.net/2015/09/digital-new-zealand-2016- dnz16/ 4 Brand, J. E. & Todhunter, S. (2015). Digital New Zealand 2016. Eveleigh, NSW: IGEA. 3 http://www.igea.net/2015/03/infographic-total-value-of- http://www.igea.net/2015/09/digital-new-zealand-2016- the-nz-industry-in-2014/ dnz16/ 2 Current and Emerging Issues for the Classification of Video Games in New Zealand 2. Uncertainty with the classification 5. Classification fees are unreasonable EXECUTIVE SUMMARY system’s application for digitally for independent game developers - distributed games - With the Other major territories, including USA, commercial availability of thousands Canada, Europe, Germany, Brazil of unclassified digitally distributed and Australia, have recognised that, games, the unrealistic enforcement in the rapidly growing digital market, of the classification system and the classification and rating fees deter jurisdictional limitations, there is a publishers and developers from actively growing level of uncertainty about the participating with local classification classification system’s application to systems. These other major territories digitally distributed video games. This have either removed, or are working uncertainty is particularly problematic to remove, the classification fees for for New Zealand businesses that are digitally distributed games. within the enforcement reach of the scheme. Meanwhile, New Zealand’s classification system demands developers and 3. Unfair application of the scheme on publishers to pay between $1,430 and local distributors - The classification $2,150 to classify a game for release system places significant and unfair in New Zealand. Compared to other costs on local New Zealand businesses. major markets where the classification Overseas competing businesses of digitally distributed games is free, are able to unfairly capitalise and the current classification fees charged receive the benefit of the classification in New Zealand are excessive, costs incurred by local New Zealand unreasonable, disproportional and acts businesses. as a disincentive to publishers and developers from actively using local 4. The classification system is New Zealand classifications. not evolving with international classification practices - Major 6. The classification system’s failure classification authorities around the with free-to-play games - The world have reviewed and adapted their classification system does not approach to classifying video games appropriately capture video games that in the digital economy. New Zealand’s are provided to users for free, including current approach to classification is games that receive revenue from in- lagging behind such international game advertising. This inconsistency developments. demonstrates the legislation’s failure to adapt to emerging business models in the digital economy. Current and Emerging Issues for the Classification of Video Games in New Zealand 3 interactive games & entertainment association 7. The classification system’s failure In March 2011 the Australian Government with episodic games – Similar to referred Australia’s classification television shows, video games are now scheme to the Australian Law Reform being released as episodes of a larger Commission for a comprehensive series or season, with each episode review. In March 2012, after significant being sold for a fraction of the price of consultation with the public, industry and a full game. The classification system Government agencies, the Australian would require each of these episodes to Law Reform Commission tabled a final be classified separately, a requirement report recommending an overhaul that has prevented the commercial of Australia’s classification scheme. feasibility of releasing such episodic The Australian Government has since games in New Zealand. began implementing the Australian Law EXECUTIVE SUMMARY Reform Commission’s recommendations, 8. The Film and Video Labelling Body including the approved use of automated has not adapted to the emerging classification tools for the classification of games market and the online digitally distributed video games. environment – The Film and Video Labelling Body’s operation struggles to With digital distribution quickly becoming prioritise the primary objectives of the the primary method of video game classification system – to appropriately acquisition in New Zealand, there is an inform New Zealander’s about the urgent need for review and reform of New appropriateness of content. Instead of Zealand’s classification
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