SaaS companies vs global gaming regulations - Can they remain compliant?
June 5, 2024
Are you in the process of building a worldwide audience for your game? If you're expanding internationally or already have overseas players, you'll need to navigate the complex world of global gaming regulations. While you can attempt to handle this in-house, most game developers seek out the expertise of a third-party SaaS or MoR company to help with the gaming landscape's constantly changing rules and regulations.
But can generic SaaS companies handle your global gaming needs more than industry-specific MoRs? For this video game expert, the answer is no. While you can use a general MoR for SaaS, you risk missing crucial regulations related to tax fraud, revenue protection, and more. Alternatively, a gaming-focused MoR can handle this complexity, allowing you to focus on your game and players.
For a more in-depth look at why a gaming-specific MoR is the right choice for your business, check out our blog, which covers this topic. This blog will highlight some of the top regulations that general SaaS companies are often unprepared to handle appropriately. While this blog is for informational purposes only and should not serve as legal advice, it will provide the overview your company needs as you begin tackling global gaming regulations' dynamic nature.
Gameplay Limits
Countries are cracking down on how much money and time a player spends in the game to protect the youth. China limits online gaming for players under 18 to 3 hours a week, while minors in Vietnam are limited to 180 minutes of daily gaming.
Loot boxes
In the same way that money and time spent in a game have raised eyebrows for some countries, citing a potential for game addiction, loot boxes have caused several countries to create laws to curb gambling. Individual countries like Japan, South Korea, Taiwan, and China all have different restrictions and, in some cases, outright prohibitions of loot boxes, while broader regions like Australia, MENA, CIS, and LATAM have yet to define what that means. Japan, South Korea, and Taiwan each have regulations specific to players understanding the probability of acquiring a loot box in the form of percentages and requirements for this information to be displayed prominently to players. The bottom line is that countries with these regulations are complex and regularly changing, making it possible for game developers to get in trouble if they aren't current in each country.
Virtual currency regulations
In 2016, Japan amended its Payment Services Act and became one of the first countries to regulate virtual currency in a video game. In Japan, virtual currency is considered a prepaid payment instrument (PPI), similar to the idea behind a gift card with two types of PPIs: "own business type" and "third party type." If the company selling the first type gets sold to someone else, the new owner must notify a specific government agency and make a cash deposit. These laws include reporting unused balances exceeding 10 million JPY.
Local presence and licensing
As one of the fastest-growing markets, it comes as no shock that Southeast Asia has become new territory for game developers to find eager gamers. But with a rise in popularity comes an increase in regulation. Vietnam presents a unique challenge, from its strict censorship regulations on video game content to its prohibition of "cross-border" operations. This means foreign developers can only offer their games in the Vietnamese market after establishing a local entity within the country. This requirement adds an extra layer of complexity for international studios looking to expand into Vietnam.
Leveling up your compliance
Going global with your game is great, but managing regulations in each market can be difficult with a generic SaaS solution. The video game industry's ever-changing rules and complexities require specific expertise and resources to keep your global presence running smoothly and your players happy.
That's where a gaming-focused MoR steps in as your partner for international success. Unlike a general SaaS company, a gaming MoR understands the industry's specific challenges. They'll handle your compliance complexities, freeing you up to focus on creating your game and knowing the MoR experts keep you compliant worldwide. Expand globally with ease and peace of mind, knowing your game can reach your players without legal roadblocks, ensuring you easily navigate the ever-shifting regulatory landscape.
Xsolla's suite of global video game commerce solutions includes operating as an industry-leading gaming MoR. Whether you're ready to take the first step or the next step in your game development, reach out to an Xsolla expert and learn how you can improve and protect your gaming business with Xsolla as your MoR.
Key gaming regulations explained
The minute your game goes global, your company needs to start considering each country's various rules and regulations regarding the video game industry. This is not a one-size-fits-all scenario, and each country handles compliance differently. From spending limits and virtual currency reporting to regional age restrictions, each regulation requires expert industry knowledge and resources to ensure your company follows the rules. To highlight just how complex some of these regulations can vary from country to country, we've highlighted some of the most often in flux, below. Incentives are often used to drive players to spend more time in a game and ultimately spend more money. As the video game industry has expanded, different countries have become increasingly concerned about putting protective measures in place to regulate how their citizens interact with video games, including spending limits and gameplay limits. The main driving factor behind these regulations seems to be seemingly based on concerns that a lack of limits may drive game addiction-related issues. Spending Limits Both South Korea and China have regulations restricting the amount of money minors and adults can spend on in-game purchases. In South Korea, the Game Rating and Administration Committee established a fixed monthly amount that players could spend on in-game purchases, with adults being allowed to spend a higher amount than minors. Similarly, China has placed restrictions on the amount of money a player can spend and on in-game rewards for first-time purchases or repeat purchases. In addition to overall spending limits, China has gone further, regulating how much money can be added to digital wallets for in-game spending.
Gameplay Limits
Countries are cracking down on how much money and time a player spends in the game to protect the youth. China limits online gaming for players under 18 to 3 hours a week, while minors in Vietnam are limited to 180 minutes of daily gaming.
Loot boxes
In the same way that money and time spent in a game have raised eyebrows for some countries, citing a potential for game addiction, loot boxes have caused several countries to create laws to curb gambling. Individual countries like Japan, South Korea, Taiwan, and China all have different restrictions and, in some cases, outright prohibitions of loot boxes, while broader regions like Australia, MENA, CIS, and LATAM have yet to define what that means. Japan, South Korea, and Taiwan each have regulations specific to players understanding the probability of acquiring a loot box in the form of percentages and requirements for this information to be displayed prominently to players. The bottom line is that countries with these regulations are complex and regularly changing, making it possible for game developers to get in trouble if they aren't current in each country.
Virtual currency regulations
In 2016, Japan amended its Payment Services Act and became one of the first countries to regulate virtual currency in a video game. In Japan, virtual currency is considered a prepaid payment instrument (PPI), similar to the idea behind a gift card with two types of PPIs: "own business type" and "third party type." If the company selling the first type gets sold to someone else, the new owner must notify a specific government agency and make a cash deposit. These laws include reporting unused balances exceeding 10 million JPY.
Local presence and licensing
As one of the fastest-growing markets, it comes as no shock that Southeast Asia has become new territory for game developers to find eager gamers. But with a rise in popularity comes an increase in regulation. Vietnam presents a unique challenge, from its strict censorship regulations on video game content to its prohibition of "cross-border" operations. This means foreign developers can only offer their games in the Vietnamese market after establishing a local entity within the country. This requirement adds an extra layer of complexity for international studios looking to expand into Vietnam.
Leveling up your compliance
Going global with your game is great, but managing regulations in each market can be difficult with a generic SaaS solution. The video game industry's ever-changing rules and complexities require specific expertise and resources to keep your global presence running smoothly and your players happy.
That's where a gaming-focused MoR steps in as your partner for international success. Unlike a general SaaS company, a gaming MoR understands the industry's specific challenges. They'll handle your compliance complexities, freeing you up to focus on creating your game and knowing the MoR experts keep you compliant worldwide. Expand globally with ease and peace of mind, knowing your game can reach your players without legal roadblocks, ensuring you easily navigate the ever-shifting regulatory landscape.
Xsolla's suite of global video game commerce solutions includes operating as an industry-leading gaming MoR. Whether you're ready to take the first step or the next step in your game development, reach out to an Xsolla expert and learn how you can improve and protect your gaming business with Xsolla as your MoR.
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