UKIE response to Government Open Letter: A Communications Review for the Digital Age June 2011

Transcription

1 UKIE response to Government Open Letter: A Communications Review for the Digital Age June 2011

2 Executive Summary The Association for UK Interactive Entertainment (UKIE) is the trade association that represents a wide range of businesses and organisations involved in the video games industry. UKIE exists to ensure that our members have the right economic, political and social environment needed for this expanding industry to continue to thrive. UKIE s membership includes games publishers, developers and the academic institutions that support the industry. We represent the majority of the UK video games industry: in 2010 UKIE members were responsible for 97% of the games sold as physical products in the UK and UKIE is the only trade body in the UK to represent all the major console manufacturers (Nintendo, Microsoft and Sony). The video games industry is the jewel in the crown of the UK s creative industries. In 2009 the UK was the largest games market in Europe, the Middle East and Africa and the third in the world after the US and Japan. 1 PricewaterhouseCoopers projects the sector will grow at an average annual rate of 10.6% between 2010 and 2014 faster than film, music and TV. Ours is clearly a burgeoning and increasingly popular industry, with the potential to continue generating billions of pounds for the UK economy. The value of the boxed and digital video game retail market 2 in 2010 was 3.3bn, buoyed by record breaking releases such as Call of Duty: Black Ops, with a staggering 2m units sold in the UK over its first 5 days and generating an estimated 81.9m. 3 Our successful UK industry sits within a strong global video games and interactive entertainment market. Global revenues from software sales are reportedly $50 billion per annum (over 30 billion) and are expected to rise to $87 billion ( 54 billion) by UKIE welcomes the opportunity to respond to the Government s initial phase of work on an anticipated Communications Bill, to ensure the right conditions are in place for the video games and interactive entertainment industry to continue to thrive in an increasingly converged media landscape. The video games and interactive entertainment market has evolved in recent years, responding to the challenges and opportunities of innovation, and giving consumers increasing choice in the range of products available through multiple channels. Alongside record breaking sales in the traditional boxed product market 5 the growth in online gaming has exceeded all expectation. The world market for games on social networks is set to increase five-fold between 2010 and 2015, creating revenues in excess of 3bn million people play casual games, 28 million of whom are 1. - Technology Strategy Board, Creative Industries Technology Strategy (2009) 2. - Software, hardware and peripherals 3. - UKIE/GFK-Chart Track 4. - NESTA, Next Gen: Transforming the UK into the world s leading talent hub for the video games and visual effects industries (2011) 5. - Call of Duty: Black Ops, released in November 2010, broke new records grossing more than million in its first week of sales, the biggest grossing week of all time for video games software 6. - Park Associates, as quoted in Bloomberg: news/ /zynga-is-said-to-plan-an-initial-share-sale-by-end-of-june.html in the UK 7. In fact, more than 40% of UK users time spent on Facebook is spent on playing social games. 8 The 2010 UK Casual Games market is estimated to be worth 35 million. 9 Our unique and constantly evolving sector is also at the forefront of two exciting developments in the interactive space: cloud gaming and cross media convergence. Both of these developments have huge economic potential and UKIE intends to conduct its own research in the coming months to look at future business models and barriers to growth in these nascent but lucrative markets. We hope the results from this research will help inform our response to the Communications Green Paper and we look forward to sharing and discussing our findings with Government at the earliest opportunity. 30 billion The global revenue from software sales Supporting growth and innovation in the video games industry requires Government action in the following areas: 1. Providing the infrastructure to support growth, in particular widespread broadband coverage supported by reliable, fast broadband connections. This includes a superfast broadband connection in excess of 30Mbps by 2020; greater spectrum availability to supplement broadband infrastructure plans; and a clear strategy from Government to encourage greater uptake of online services, providing business with a potential return on investment and encouraging them to innovate and harness technology to ensure their products reach the widest audience. Of course, the video games industry already leads in this regard with a myriad of business models and online offerings for consumers. 2. Internet management assisting and encouraging ISPs to use reasonable network management tools to prevent the unlawful transfer of content on their networks UK National Gamer Survey as quoted in blog/2011/04/28-million-uk-internet-users-are-casual-gamers-and-otherinteresting-social-gaming-stats/ 8. - ibid 9. - IHS Screen Digest 2

3 3. Incentives to invest, not least in terms of sending a strong signal to banks and to the private investment community that the video games industry is worth investing in. The Government should also consider concrete support measures, such as the introduction of a copyright box linked to the R&D tax credit. 4. Protecting investment and providing security for those who invest in creation and innovation. This includes laying out a clear roadmap for the implementation of the Digital Economy Act, in particular sections 17 and 18, and engaging in an open dialogue with rights holders about the implications of the Hargreaves Review. 5. Deregulation where possible, sensible regulation where necessary, and no regulatory convergence. The video games industry has a strong record of successful industry solutions to keep children safe both online and offline. This includes the adoption of the PEGI age rating system, UKIE s membership of the UKCCIS Executive and relevant working groups, and the fact that the video games industry already has in place many of the recommendations put forward by the Bailey Review. As video games are a distinct media and a unique sector, current content regulations are more than sufficient to ensure children are protected. We do not favour regulatory convergence of any kind and strongly urge the Government to consider the points made in the body of our submission very carefully. Where necessary we will work with Government, Ofcom and others to develop self-regulatory solutions that are right for industry, the consumer, and ultimately the economy. 50 million Number of users of UK developed Moshi Monsters Looking to the future: Cross-creative industry commercialisation of IP, crossmedia convergence and cloud gaming Commercialisation of IP The video games and interactive entertainment industry has been exploiting IP beyond the confines of the video games industry, and has become a financially rewarding crosscreative industry endeavour. For example, Tomb Raider is a media franchise consisting of action-adventure games, comic books, novels, theme park rides, and movies. 10 The potential for cross-creative industry commercialisation of IP is increasingly prevalent in our industry and includes wellknown brands such as Harry Potter and Lego. Similarly, the success of such cross-creative industry commercialisation is growing: Prince of Persia: The Sands of Time is a 2010 action film, retelling the 2003 video game of the same name. The film grossed an estimated $18 million in its first week alone, from an opening in just 19 European countries. 11 The film has become the highest grossing video game adaptation ever worldwide. Ubisoft has recently announced plans to turn three of its biggest franchises into films. Having sold 29 million copies of Assassins Creed titles, this IP has now been exploited in the form of books, comic books, Facebook games, figurines, short movies and more. Mind Candy, which currently has over 50 million users on its Moshi Monsters site, launched a Moshi Magazine earlier this year and, after just three issues, it is the best-selling kids magazine in the UK. Mind Candy has also started its own Moshi TV YouTube shows to support the website, with users as the star subjects. There are even talks with Hollywood for a movie and live tour. 12 Cross-media convergence Our industry is also seeing moves towards what has been termed cross-media convergence. No single or clear definition of cross-media convergence exists. However, it is generally recognised as being different to gamification. 13 Cross media convergence can be defined as the bringing together of different media through one platform. This is not simply about exploiting IP, making a video game into a film and visa versa; cross media convergence is about engaging an audience through a variety of media, delivered through a single platform or portal. Of course this is already happening to some degree, especially on mobile phones which allow consumers to watch the latest YouTube video and to play the latest games downloaded as specific game applications or through websites accessed on their device. Cross-media convergence takes this one step further, allowing interactive entertainment to integrate into TV broadcasting. For example, Trion World games has announced a joint venture with NBC Universal s SyFy channel, which is set to launch in June This project will see the development of a sci-fi television show, alongside a virtual world interactive The original concept the original IP was developed in the UK and commercialised as a video game: Tomb Raider was published by British company, Eidos Interactive, and the Tomb Raider video games have together sold over 35 million units, making it one of the best selling video games of all time and an iconic British example of IP creation Los Angeles Times. May 24, As reported in Develop (June, 2011) Gamification is the use of game play mechanisms for non-game applications, in order to encourage people to adopt the applications or change their behaviour in some way. For examples see: or co.uk/news/business or gamification-how-online-games-are-taking-over.do 3

4 entertainment experience. 14 The characters from these shows will be identical, and online gamers will be able to enter the exact same world they are viewing on their TV screens as linear content. The creators intend to connect their content to every screen-based device imaginable, so that gamers can delve into the world at any time. There will also be live video and broadcast links to Facebook, YouTube and live Twitter feeds, with the writers of the show possibly integrating elements from the online gameplay into their scripts. 23% Current rate of growth in digital sales The arrival of IPTV has the potential to take things even further, bringing split-screen linear and interactive broadcasting directly into people s homes, through the same set-top box. Again this is already happening to some degree. For example, The Million Pound Drop Live is a quiz show which broadcasts live on Channel 4. Interactive entertainment is weaved into live TV broadcasts to facilitate the game show element, and the show uses social networking sites such as Facebook and Twitter to find contestants, and also to promote the show. As the show is broadcast live, viewers are encouraged to play along online at the same time with statistics on their performance appearing on screen during the broadcast and being read out by the presenter. Although online players receive no prize money, bookmakers take bets on which stage of the game the contestants will leave and how much money will still be in play at various stage of the game. And of course there is YouView, where one could potentially watch BBC News on channel x, but flick to channel y to continue playing their video game. It is not impossible to imagine a split-screen scenario where, for example, you are watching Formula 1 on the left-hand side, whilst competing on the same virtual track on the right hand side. Another example might be singing along (live) to the X Factor, whist watching contestants compete, and having other members of the audience sing along with you/your avatar and/or rate your performance. The possibilities are endless and the market potentially massive. Interactive entertainment is at the heart of these developments, and even console manufacturers are using cross media convergence in their next generation of consoles: Nintendo has announced the Wii U, a new home console with touch screen controller, motion control and HD graphics, which enables you to throw virtual/digital data gamification-when-two-tribes-go-to-work html from your console to the TV screen and merge linear and interactive content. 15 Cloud Gaming Cloud gaming is also anticipated as one of the next big developments in the interactive space. Alongside use of the cloud to host music, books, photos etc., cloud gaming (also called gaming on demand) allows direct and on-demand streaming of games onto an internet connected device, where the actual games are stored on the game company s server. OnLive is one company active in the cloud gaming space, due to launch its platform this autumn, 16 and BT has exclusive rights to bundle the OnLive Game Service with its broadband packages in the UK. OnLive will have full compatibility across a range of HDTVs, tablets, smartphones devices, and most PCs and Macs. It will also be integrated into social networks and have a MicroConsole, which allows users to access OnLive with their television, so the games can be played on a screen even while being streamed from a server. 17 The company is already valued at $1.8bn. 18 UKIE intends to conduct its own research in the coming months to look at the economic potential of cross media convergence, future business models and barriers to growth. We hope the results from this research will help inform our response to the Communications Green Paper and we will share our findings with Government at the earliest opportunity. Supporting growth and innovation Broadband infrastructure In recent years the Internet has played a vital role for our industry as the main driver in the rapid growth of online games, leading to increased game development, production and, of course, jobs. All the popularly available game console systems connect to the Internet and most games today include an Internet-related aspect. The digital games market accounts for 12.5% of the UK video games industry, and we can only expect this to grow. 19 The rate of growth in digital sales was as high as 44% in 2009 and has now leveled to a healthy 23%. It is vital that we have the infrastructure to support this growth, in particular widespread broadband coverage supported by reliable, fast broadband connections. Experience in other parts of the world has already shown the merits of inspired government innovation. In the mid-nineties, the Korean administration demonstrated its support for next generation communication technologies by investing $1.5 billion in broadband development, providing $1 billion of soft loans and deregulating its national phone monopoly. Analysts have identified Korea s lead in broadband infrastructure as the key driver of their enviable share (7%) of the world market for online gaming. The new broadband system had a significant impact on the development of online gaming in Korea. This in turn contributed to the rapid development of online business and communication in that country IHS Screen Digest 4

5 UKIE welcomes the Government s commitment to ensuring the UK has the best superfast broadband network in Europe by However this should exceed 30Mbps for superfast broadband connection by The video games industry already provides numerous online models that appeal to consumers; we need the appropriate broadband infrastructure to deliver this and to support the rapid growth in online gaming. And as our industry, alongside others, moves to the Cloud and entertainment is streamed across multiple devices in the home, coverage (as well as speed) will be crucial. The current situation where two million households in the UK are without access to a good level of broadband is unacceptable. Government should seek to supplement their broadband infrastructure plans with provisions for greater spectrum availability, especially in hard-to-reach rural areas where it can be easily exploited relatively cheaply. Widespread broadband coverage also provides business with a potential return on investment, encouraging them to innovate and harness technology to ensure their products can reach the widest audience. Alongside this, it would be useful for businesses to see a firmer Government strategy for encouraging greater uptake of online services. Whilst there have been some moves towards greater provision of public services online, there are only a few examples (iplayer) of mainstream applications that encourage the nation to get online. 59 million Software sales of UK BAFTA award winnng games Finally, providing a widespread, reliable, fast broadband network is crucial to ensuring the UK is seen as a viable option for the hosting of cloud-based services. If cloud-based services, accessed by UK consumers, are hosted abroad because of inadequate infrastructure and uptake in the UK, the loss to the Treasury in the form of VAT and corporation tax will be enormous. Instead, we need an environment that attracts online services of the future, which are not only good for the consumer but great for UK Plc. Internet Management If certain illegal activities online, which are currently widespread and hugely destructive, can be addressed and controlled, the business models that help to sustain subscribers long-term interest in broadband services will be protected, and the UK s online game industry will continue to grow and prosper. For this reason, we welcome any Britain s Superfast Broadband Future (2010) The current EU recommendation assistance and encouragement which might be offered to internet service providers to enable them to use reasonable network management tools to prevent the unlawful transfer of content on their networks. Incentives to invest The video games and interactive entertainment industry is known for its production of original British IP. Football Manager, one of the best-selling PC franchises ever, was developed in the UK by Sports Interactive. The online game, Runescape, developed by Jagex Game Studio based in Cambridge, is one of the world s most popular multiplayer online games. UK creators are also moving into the mobile app world, with the development of games such as Rolando. Of the top 20 development studios in the world four are based in the UK, including Rockstar North, which generated 16.3m in UK revenue in UK development studios continue to develop recordbreaking IP. Grand Theft Auto (GTA) IV, primarily developed by Edinburgh-based Rockstar North (formerly DMA Design) and published by Rockstar Games, sold more than six million units and generated sales of 250m in its first week alone; it took 150m on its first day. GTA has gone on to become a global franchise, generating millions of pounds for the UK economy. This year s British Academy Video Games Awards was another reminder of the talent we have here in the UK. Codemasters Birmingham won the Sports BAFTA for the game F1 2010, an ultra-realistic simulation of the 2010 Formula One world championship. The Multiplayer award went to another racing game, Need for Speed: Hot Pursuit, developed by Criterion, the Guildford-based creators of the hit Burnout series. And Leicestershire-based Rare took home the Family BAFTA for Kinect Sports, which uses a new technology to allow players to play controller-free. These three games have generated over 59 million in software sales since release. The question is how we ensure the UK continues to develop successful British IP. i. Access to Finance Access to finance is crucial. As the Government s recent report, Access to Finance for Creative Industry Businesses shows, there is evidence of market failures being more acute in the supply of finance to Software and Other Creative Content sectors. 23 This has to change and the Government needs to send a strong signal to banks and to the private investment community that the video games and interactive entertainment industry is a sector worth investing in. More networking events such as the recent NESTA roundtable bringing together the private investment community and developers are essential. And the Government needs to make clear that the video games industry is a successful British industry with massive growth potential, which already makes a huge contribution to UK Plc. We look forward to the Government s response to the aforementioned Access to Finance report, to look at how banks might assess risk in our industry in a more realistic way GFK-Chart Track Access to Finance for Creative Industry Businesses, report prepared for BIS and DCMS (May 2011) 5

6 The Government should also look at extending the patent box, to a copyright box linked to the R&D tax credit. Commercial exploitation through active licensing of IP rights (copyright) is the trading framework that underpins much of our sector. In other words, profit for our industry is intrinsically linked to profits from IP. An IP tax relief would allow our large developer base to capitalise on original games development in the myriad business models that now exist in our industry: traditional console, mobile and online to name a few. An IP tax will provide a huge boost to IP creation, allowing the UK to capitalise on the strong, diverse global video games and interactive entertainment market. This tax relief would also show government commitment to the sector and the video games and interactive entertainment industry can start to regain some of its lost ground, and attract and anchor knowledge intensive activities in the UK. The video games industry is also dominated by global publishing companies who own or licence the IP, profits derived from this IP are often taxed outside of the UK, usually in the country where the global publisher is based. An IP tax relief would provide an additional incentive to keep development and most of all the revenues derived from this development within the UK. The Government needs to make clear that the video games industry is a successful British industry with massive growth potential, which already makes a huge contribution to UK Plc UKIE appreciates the Treasury s need to set a clear direction for reform by prioritising rate reductions over broadening reliefs. UKIE also appreciates the difficulties in devising a workable proposal for intangible assets such as IP. However, a workable solution would surely be to allow those who claim the R&D tax credit to claim the IP tax relief. This would be a manageable, workable and identifiable system, in line with the Government s priority to encourage greater R&D spend and encourage technical innovation activities. After all, R&D intensity in the UK has remained below major developed economies and business R&D dropped by 2.5% between 2008 and Linking R&D tax credits to an additional system of tax relief (at a later stage of the innovation process) would encourage take up of the R&D scheme, enhancing investment and innovation. ii. Protecting investment Encouraging investment, innovation and growth in the creative industries relies on the provision of some sort of security that there will be a return on investment. Of course there is no guarantee that a potential hit will in fact become a hit. However, investors and creators need to be sure that Department for Business, Innovation and Skills, Annual Innovation Report (2010) content will not be exploited by those who are not prepared to pay for it. The video games industry provides a myriad of successful and sustainable business models, which produce an excellent return on investment whilst allowing consumers to play games online and access game content. Two popular and growing models are the use of in-game microtransactions and ad-supported versions of games. Microtransaction models give consumers the option to make small, ingame purchases of additional content or enhancements to a game they purchased or one offered as a play for free product. Publishers more often are also offering consumers ad-supported versions of game, which give consumers the opportunity to enjoy a basic gaming experience for free. Both models give consumers more flexibility in accessing and paying for game content, but ensure revenue streams to publishers for their creative works. Publishers are also able to mix and match models through a wide array of channels providing consumers with more choice than ever. For example, Electronic Arts (EA) offers both flat-fee download and free ad-based versions of its Scrabble game on the AppStore for iphone. Subscription models are also popular and successful: having shot past the 50million user mark, Mind Candy says one user a second signs up to the Moshi Monsters website. Subscriptions of 5 a month or 30 a year are the main revenue drivers, propped up by proactive licensing forecast to be bringing in $100m in gross sales from merchandise. 25 These online models sit alongside the traditional boxed product market, and the online facilities for consumers to purchase physical digital products. And of course games can be downloaded through portals such as Get Games and through the networks provided by games consoles, for example Xbox Live. Yet, despite the range of offerings, the realities of the online environment are that pirated content has become more readily available and easier to download. In addition, downloading any pirated content, including games, appears to be becoming more culturally acceptable. 26 The number of individuals detected to be participating in peer-to-peer activity, exchanging copies of video games was 2.6 million in 2010 alone. 27 And of course this number captures only one method of pirate distribution. 28 One UKIE member has estimated that nearly 45% of UK users are playing a pirated copy of their game. If only a fraction of the consumers involved in peer-to-peer infringement bought a copy of the game instead of downloading it unlawfully, this would have resulted in millions more in revenue for the UK video games industry, with accompanying tax revenue for the Treasury. This money could also be reinvested by the industry to develop new products to match consumer demand and of course to sustain the jobs supported by the video games industry: jobs in development (the UK has the largest developer base in Europe); jobs in marketing, jobs in publishing to name a few, and of course jobs in retail As reported in Develop (June, 2011) Waves pdf This research was carried out by an industry monitoring programme, covering 230 video games franchises Other popular channels and methods of pirate content distribution include download hubs (unlawfully used cyberlockers) or one-click downloads of hosted copies of games, Usenet, etc etc. 6

7 UKIE has consistently called on the Government to support the strong enforcement of intellectual property rights and broadly supports the measures set out in the Digital Economy Act (DEA) to tackle unlawful file sharing. Government and law enforcement agencies need to work together to protect consumers and legitimate businesses by making it difficult for pirate or rogue sites, and those engaged in online infringement and physical counterfeiting, to operate and make money, including establishing processes for the institution of appropriate remedies for blocking particular infringing sites, future provision for which is already made in the DEA. UKIE awaits the outcome of Ofcom s site blocking review. In the meantime UKIE will continue to engage with the rights holder/isp roundtables and supports Government s continuing efforts in the areas under consideration. UKIE was broadly happy with Professor Hargreaves Review of the IP framework but some areas did give us cause for concern. We await the Government s response to this, in particular for proposals relating to the Digital Rights Exchange, exceptions to copyright, and licensing. One UKIE member has estimated that nearly 45% of UK users are playing a pirated copy of their game Deregulation where possible, sensible regulation where necessary, and no regulatory convergence Child safety The video games industry prides itself on ensuring that the health and wellbeing of consumers, particularly of children, receives the highest priority. UKIE is an Executive Member of the UK Council for Child Internet Safety (UKCCIS) and we recently sponsored the highly successful UKCCIS summit. UKIE is also one of the project leads on the parental controls strand of UKCCIS work. Our industry is recognised as leading the field in terms of the consumer safety offerings we provide. All consoles come with parental control features that allow parents to determine the types of content their children are able to access based on the PEGI age rating system (see below); control the amount of time their children spend playing games; control and monitor their children s online activity including who they speak to and who they are friends with. Parental controls on consoles also run on the principle of Active Choice, in line with the recommendations of the Bailey Review, so that parents have the option to set up parental controls as soon as the console itself is set up. Information is also provided to parents online, including through the UKIE website, and through pamphlets included when the console is purchased. The PEGI age rating system is a robust and recognised system of protection for young people, which the video games industry successfully argued for inclusion in UK law. Used throughout Europe PEGI includes age descriptors to help parents make informed decisions about the type of content they can expect to find in the game, and what age group the game is suitable for. Alongside age descriptors, content descriptor icons provide parents with additional information about games content, for example if the game includes bad language or has online gameplay functionality. The PEGI packaging regulations provide further guidance for example on the size labels should be and the display of PEGI icons on websites. This is to ensure our industry promotes safe and sensible gaming at all times, and that children are only exposed to age appropriate content. Certain principles of the PEGI Code of Conduct also apply to advertising and promotion to ensure that there is no inappropriate marketing of products to children. This applies to in-game advertising as well, for example games rated PEGI 3 would not be able to include prominently displayed drinks promotions on bill boards to enhance to the real life element of the game. UKIE provides all of its members with information about the British Code of Advertising and Sales Promotion, monitored by the Advertising Standards Authority. The VSC Code of Practice for retailers is also designed to support the Video Recordings Act and ensure no age-inappropriate products are supplied by retailers to customers. Surveys carried out by PEGI and by the ASA indicate widespread adherence to these codes of practice. 29 Since young people and children are significant users of online and mobile technologies in Europe, PEGI Online was created, as an addition to the PEGI system, to ensure a safer online gaming environment and to increase the awareness among parents. Game providers are licensed to use the PEGI Online label if they meet the standards set out in the PEGI Online Safety Code (POSC). These standards include, among other things, the obligation to keep websites free of illegal and offensive user-created content and undesirable links, as well as the obligation to maintain an effective protection of privacy. PEGI online has proved difficult for companies to sign up to in its current form. The video games industry has therefore taken action to address this and PEGI SA, who manages and oversees the PEGI system, has developed a new concept which should lead to an expanded and reshaped structure that allows the PEGI system to address these challenges, including proposals for a better integration of PEGI Online into the PEGI rating process. Both UKIE and ISFE are also aware of discussions within UKCCIS and with the Commission about principles for industry self-regulation across connected consumer equipment. It is important to bear in mind of course that whilst industry can play its part in providing the right framework to keep children safe online, the nature of the internet is such that in some cases content and interaction is out of the control of any one industry. We favour a responsible framework provided by a responsible industry, combined with education and awareness, all of which our industry currently delivers well For example, 7

8 PEGI is already a trusted and recognized system. 30 UKIE will continue to promote PEGI and parental controls and looks forward to having a firm date for PEGI implementation so that we can proceed with a fuller campaign. Regulatory convergence Regulatory convergence is inappropriate, unnecessary and unworkable. Whilst media may be converging in terms of the way it is delivered to consumers and used together to reach a wider audience, the media itself remains fundamentally different. No matter how much integration there is of linear and interactive footage, within a program or through a screen, the fact remains that this media is different: one is linear and one is not. Video games, classified as software and protected under the Software Directive, are already recognised as distinct from audio-visual media services and the adoption of separate classification for video games into UK law is recognition of this. cross-media is a tall order. Not only will it be necessary to address the major difference between interactive and noninteractive content, but it would be necessary to harmonise the various, mainly government-run film classification systems throughout Europe and reconcile their ratings. We do recognise however that discussion may need to be had about the signposting given to consumers when they are viewing different types of content on their screen both linear and non-linear in a split screen situation. We look forward to working with Government to think through some of these issues and to develop the best solutions that are right for industry, the consumer and ultimately the economy. Parental control locks allow parents to control or limit access to videogames and other forms of entertainment Because of the clear differences between videogames and non-interactive audio-visual content, it is unlikely that a cross-media rating system can be developed that will have the flexibility to provide the best review and classification of these distinctly different types of content. The nature of video games means that rating by a central body is unworkable; video games are very complex and can literally go on forever. Instead, a system of classification for video games relies on self-declaration that is independently verified, and based on highly concrete, detailed and objective definitions and a set of questions about many different types of game content. This is provided for under the current PEGI system. Without this current provision or any attempts to change this system unilaterally consumers may be put at risk. Console and games system manufacturers have already taken steps to address the provision of different content through one platform: parental control locks allow parents to control or limit access to videogames and other forms of entertainment, both PEGI and BBFC classified. Furthermore, PEGI is the standard videogame rating system throughout most of Europe. It has already achieved nearly complete pan-european acceptance. This is not the case for audio-visual media classification, of which there are currently many individual systems throughout Europe. Thus, aiming for a rating system that is both pan-european and a

9 List of UKIE Members Full Members 3MRT 4MM 505 Games Ltd. Activision Blizzard UK Ltd Atari EU Avanquest Software Publishing Ltd CE Europe Ltd ChangYou.com (UK) Company Ltd Codemasters Ltd Disney Interactive Studios UK Easy Interactive Electronic Arts Ltd FatBob games Focus Multimedia Ltd Kalypso Media UK Ltd Koch Media Ltd Konami Licensed 4 U Ltd Majesco Europe Ltd Mastertronic Group Ltd Mediatonic Ltd Microsoft Ltd Namco Bandai Partners UK Ltd NCsoft Ltd Nintendo UK Ltd Nordic Games Publishing AB Piggyback Interactive Ltd Playdom Inc. Pqube Ltd Rising Star Games Ltd SEGA Europe Ltd Sony Computer Entertainment Europe Ltd Square Enix Ltd Take2 Interactive Software Europe Ltd Tecmo Koei Europe Ltd The Stationery Office Ltd THQ International Ltd Trion Worlds Europe Ltd Ubisoft Ltd Warner Bros Interactive Entertainment White Room Games Ltd Zenimax Europe Ltd / Bethesda Softworks Europe Ltd Associate Members AGI World Ltd AIME Ltd ASP Solutions Ltd Casual Games Association CCS Media Packaging CD Team Ltd Centresoft Ltd Channel Four Television Company Ltd DNA Eurogamer Network Ltd European Console League Fidelity Investment Services Ltd Future Publishing Ltd GAME Stores Group Ltd GameHorizon Gem Distribution Ltd Get Games Online Ltd Harbottle & Lewis LLP Hasbro Europe Intent Media Ltd Internet Advertising Bureau NESTA OK Media Ltd OPM Response Ltd Sony DADC UK Ltd Target Media Ltd The Games Tribe Ltd VGM Virgin Media Ltd World Gaming Executives Academic Members De Montfort University National Film & Television School Ravensbourne College Sheffield Hallam University Teeside University - School of Computing University of Abertay Dundee University of Bournemouth University of Glamorgan; Cardiff School of Creative & Cultural Industries University of Hull University of Wales, Newport (Skillset Media Academy Wales) 167 Wardour Street, London, W1F 8WP - T: +44 (0) F: +44 (0)