Petar Petrić : Legal Relations in the Gaming Industry

Gaming industry, i.e. the industry of video games (PC games, mobile games, console games and browser/social network games) is one of the fastest growing industries, whose value reached the number of 196 billion dollars in 2022.

It thus exceeds the global film and music industry, and smart devices have brought a big change in the development of gaming and made it a favorite pastime for everyone, regardless of age.

The increase in the value of gaming is contributed by the large Chinese gaming market, which is estimated at 46.1 billion dollars. China is the country with the largest gaming market, followed by the US, Japan, Germany and Great Britain.

In 2020, the number of employees in the video game industry increased to 74,000 in the EU and 98,000 in the whole of Europe. France and Germany are the countries with the largest number of employees in the gaming industry, Germany with over 10,000 and France with over 15,000 employees.

The growing internet connectivity, increasing adoption of smartphones and the advent of high-bandwidth network connectivity such as 5G have further increased the demand in the gaming market worldwide. According to the GSMA report, As of November 2021, 170 mobile operators have launched commercial 5G services with a 7% population penetration at the end of 2021, opening up new opportunities for mobile vendors to introduce 5G smartphones to the market.

Mobile gaming is the most popular form of gaming globally, overtaking both console and PC gaming. One of the main reasons for the popularity of mobile gaming is affordability. Almost everyone has a smartphone with games. The increasing demand for mobile games is the result of various technological advancements and improvements, such as AR, VR, cloud gaming and 5G.

AR is becoming perfect for mobile gaming thanks to its impressive and interactive technology. Moreover, mobile games are the most popular AR category in app stores.


Legal relations

Regardless of whether it is a video game publisher, developer or freelancer or licensor or someone else involved in the video game industry, each of these key players must necessarily understand the legal aspects and relationships, the contracts that must be concluded and that govern mutual relations in the gaming industry.

Legal service is required from the early stages of concept and pre-production through the stage of production and realization, including documenting the investor’s investment and regulation of licenses, intellectual property, and all other rights and obligations of each of the participants to be contracted.

The contracts governing relations in the gaming industry are:

–       Development Contract

–       Investment Contract

–       Employment Contract

–       Nondisclosure Agreement – NDA

–       Distribution Agreement

–       Licence Agreement

–       End user Licence Agreement – EULAs

–       Terms of Service – TOS

Participants in the gaming industry are: developers, publishers, distributors, traders, customers, and end users of the product (players).

Developers are people specialized in the field of software development, i.e. in the video game industry, people who create a video game and all the segments it consists of – image, sound, design and other components that a certain game will require.

Publishers are the participants who make sure that the game is placed on the market. Publishers are most often the companies that work with a large number of developers, conduct market research and analyse consumer needs in order to create a game portfolio with the highest possible chance of success.

Distributors allow games to be downloaded in a traditional physical way and/or through digital distribution platforms. Merely two decades ago, there was only physical distribution, and games were sold in physical form, which was the only way video games were sold. With the advent of the Internet, video games began to be sold online, and today that sales channel takes over the majority of sales.

Mutual interaction and connection between developers, distributors and publishers is very common and requires complex legal monitoring of these relationships.

Legislation in the Republic of Croatia

The 2018 Law on Audiovisual Activities introduced the category of video games for the first time. The production of video games is defined as an audiovisual activity, and is classified in the same audiovisual activity as the production of other multimedia content, series and films, and the provision of on-demand audiovisual services such as the Internet and other media.

This Act also regulates video games as audiovisual works, which created a legal framework for the further development of one of the most propulsive segments of audiovisual industry.

Along with some benefits, the legislator stipulated obligations for the developers as well. There is an obligation to emphasize the categorization of each work before its publication, considering the age of the users for whom it is intended. The law prohibits the distribution, sale and rental of video games to minors if the category of games is not appropriate for their age. It is also prohibited to publicly display and advertise games that are not suitable for minors.

Everyone involved in the production of games must be registered in the register of the Croatian Audiovisual Center (HAVC), which is maintained digitally and whose form is prescribed by the director of the Centre.

Legal support for Gaming and eSports

Some gaming start-ups do not think they need legal support. This often leads to an imbalance in the position of investors and startups, which, despite excellent ideas, do not achieve the desired financial results because of that.

That is why start-ups have the greatest need to be familiar with their legal rights and everything they should do to achieve success in this fast-growing industry.

We should also point out eSports as a new fast-growing entertainment industry with a significant population of fans in North America, Asia (South Korea and China) and the European Union (Germany and Great Britain).

From a legal point of view, eSports has brought some unique professional needs to the extent that the first law firm dedicated entirely to eSports was opened in early 2017.

The growing field of eSports law covers everything from copyright and intellectual property, contract law, mergers, acquisitions, employment, betting regulation and international legal issues.


We should also point out eSports as a new fast-growing entertainment industry with a significant population of fans in North America, Asia (South Korea and China) and the European Union (Germany and Great Britain).