A common current theme of development in the games industry is a merging of previously distinct categories. Whether this is between real life and virtual reality with the growth of immersive gaming; or between games and social media as games increasingly allow users to interact directly; or even between business and consumers as crowdfunding is used to finance both the development of games and the rewards of playing them, the blurring of previous boundaries is starting to permeate the industry. We expect this trend to continue and intensify over the coming year.

Continued expansion of the toys-to-life genre

Toys-to-life is a genre of video game that uses physical toys to interact within the game. These toys tend to use near field communication (NFC) which communicates with an accompanying portal device that is used to 'transport' the physical toy's character and related player data into the game. It is one of the most lucrative offshoots of the video game industry, with the Skylanders franchise alone selling more than US$3 billion in the last four years.

We can expect wider development and production of toys-to-life experiences as NFC technologies become more affordable and players become more familiar with navigation between screened and live entertainment. A good example of this trend is the Taiwan-based studio Monkey Potion which has developed a strategy board game called Project Legion which has NFC chips inserted into all of the playing pieces. This enables the board game to interact with its associated mobile app which traces each turn and replicates it on screen.

Legal issues:

It is important for publishers to consider the safety and labelling requirements for the physical toys which contain the NFC chips before they are released for sale. The Toys (Safety) Regulations 2011, set out the legal requirements that need to be met. These apply to the sale of toys that are designed or intended (whether or not exclusively) for children under 14 years old.

Also, compliance with the Waste Electrical and Electronic Equipment (WEEE) Regulations 2013 should be considered given that the current scope of guidance from the UK's Environment Agency which specifies the inclusion of "playing pieces or dice in a game requiring electricity to play."

The distinction between social media and games will continue to blur

The latest generation of games is harnessing the improvements in broadband speeds and network features with the result that players benefit from more dynamic social experiences. The hugely popular game Minecraft has, for example, become a venue for friends to meet online and speak with each other while collaborating on construction projects and other activities. This can be of great benefit to those who feel isolated and seek social interaction. Recent co-op games like Destiny encourage players to socialise and share to succeed. No doubt future co-op games will take a similar approach in their design and bolster the concept that multiplayer games provide social and not just 'gaming' experiences.

Legal issues:

The fact that players often need paid-for memberships like PlayStation Plus or Xbox Live to benefit from integrated social features in games needs to be made clear to consumers prior to purchase, particularly where these features are integral to the game as opposed to just optional extras. These additional costs should be made clear in the labelling/packaging of the game, together with broadband speed requirements if relevant.

Publishers also need to consider the increased risk of cyber bullying and online abuse between players, particularly in respect of games that target children. It is advisable to require players to sign up to clear rules on acceptable behavior which are then effectively enforced. Trolls need to be managed and banned where appropriate.

Freemium game design adopted in premium games

Developers are using metrics to tweak and evolve games by reviewing user data. Perhaps one of the best examples is the approach taken by Bungie/Activision with Destiny in that it has an entire team that analyses and interprets server data and player feedback to improve and further develop the game. This has resulted in the delivery of regular downloadable updates, as opposed to the release of annual iterations, with the objective of retaining valuable players (for example The Taken King is a major expansion of, rather than a sequel to, Destiny). Retention of loyal customers has become vital in what is a competitive market.

In this respect, premium PC and console games have had to learn from the freemium model. SuperCell has developed Clash of Clans into a platform that evolves in response to player metrics data. As it would, of course, be difficult to develop another similarly popular app-based game, it makes more sense to exploit metrics data to retain its high-volume of players with tweaks to the game through regular updates to the app (for example from the 24 February 2015 update, Clan Castle troops can be deployed on obstacles and decorations). This approach to player metrics data also benefits monetisation in that in-game purchases can be identified to help overcome aspects of the game players might find difficult.

Legal issues:

The sale of expansion packs and other updates as in-game purchases, particularly in respect of those which target children, could breach the Consumer Protection (from Unfair Trading) Regulations 2008. The UK’s Competition and Markets Authority has investigated online and app-based games to check whether these are misleading, commercially aggressive or otherwise unfair.

In addition, it has become apparent that the UK's Advertising Standards Authority (ASA) has now formed a view on how certain in-game purchases should be communicated as part of the marketing/advertising campaigns for games. This applies to premium and freemium games (perhaps more so in respect of the former where players might not expect in-game purchases to have a significant impact on gameplay given their upfront cost). The ASA stated in its ruling on a marketing email for EA's freemium app-based game Dungeon Keeper that:

"Although the game activities were available without cost to the player, we considered that for players to achieve the gameplay experience that was reasonable for them to anticipate, it was likely that they would need to spend money on the premium currency. The ad should therefore have made clear what consumers could expect from the free elements and that in-app purchases would have a significant impact on gameplay."

It is, therefore, advisable for publishers to be clear about the role of in-game purchases (particularly if these are necessary to achieve the gameplay experience which players might reasonably expect) or, alternatively, explore other monetisation models.

Increased involvement of crowdfunding in the games industry

There has been an increase in the number of games that use crowdfunding sites to identify levels of consumer interest and fund their development (for example Shenmue III attracted 69,320 backers on the crowdfunding platform Kickstarter who together pledged US$6,333,295).

The role of crowdfunding within the games industry will undoubtedly continue to grow. A good example can be found in the context of eSports - Valve has raised an impressive prize fund of US$10m for its Dota 2 tournament through a US$10 charge on the game's Compendium virtual sticker-book. Hi-Rez has also adopted crowdfunding as a method to increase the value of the prizes it can offer at its Smite championship.

Legal issues:

The use of crowdfunding is becoming more regulated as its popularity increases. There have, for example, been well-known disputes such as the recent controversy over Godus. There is a risk that some consumers see crowdfunding platforms as a way to pre-order games that are very far off from release and do not appreciate that the project might fail. The legal issues that touch on crowdfunding generally can be found here.

Increased participation in immersive gaming - augmented and virtual reality

Augmented reality

Augmented reality is the superimposition of computer-generated sensory input such as sound, video, graphics or GPS data onto a real-world environment. The app-based game Ingress is a good example of a game that transforms the real world into the landscape for a game.

Legal issues:

Data protection laws are relevant here, particularly where players' location data is stored or shared as part of the game. The GPS function on smartphone apps has proved a data protection challenge with some users not understanding who has their location data and for what purpose. It will be of interest to see whether the proposed EU General Data Protection Regulation will keep up with this new technology.

There is also the risk that children venture to unknown locations without parental supervision where games encourage players to travel in the real world to complete missions/levels.

Virtual reality

There is huge excitement over virtual reality – there have been several dedicated sessions at all the recent industry trade fairs like Develop and the Game Developers Conference. The key headsets are about to be released with the PlayStation VR (previously known as Project Morpheus) and Oculus Rift both earmarked for release in early 2016. Several publishers are ramping up their research and development activities around virtual reality to benefit from the potential boom in business that could follow.

Legal issues:

The legal issues are in many ways no different to those which apply to traditional 2D games but some of these like IP infringement in a virtual world and the translation between virtual and real assets, may come into sharper relief. There are also concerns that the new design conventions will not have entirely ironed out all of the technical problems (and, just as importantly, the fact that some early adopters reported that it made them feel nauseous). It will therefore be of interest whether or not there will be 'no-fuss' refunds policies for those who purchase the new headsets. If not then there could well be legal claims around whether perceived glitches or nauseous experiences result from the manufacturer of the headset, the game developer/publisher or perhaps even the individual player's sensibilities. In this respect the standard legal requirements around 'satisfactory quality' and 'fitness for purpose' are not clear-cut when applied to this new technology.