Governance of Digital Game Environments and Cultural Diversity

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1 Graber Prelims 28/10/09 12:18 pm Page i Governance of Digital Game Environments and Cultural Diversity Electronic copy available at:

2 Graber Prelims 28/10/09 12:18 pm Page ii Electronic copy available at:

3 Graber Prelims 28/10/09 12:18 pm Page iii Governance of Digital Game Environments and Cultural Diversity Transdisciplinary Enquiries Edited by Christoph Beat Graber i-call, University of Lucerne, Switzerland Mira Burri-Nenova World Trade Institute, University of Berne, Switzerland Edward Elgar Cheltenham, UK Northampton, MA, USA

4 Graber Prelims 28/10/09 12:18 pm Page iv The Editors and Contributors Severally 2010 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts USA A catalogue record for this book is available from the British Library Library of Congress Control Number: ISBN Typeset by Cambrian Typesetters, Camberley, Surrey Printed and bound by MPG Books Group, UK

5 Graber Prelims 28/10/09 12:18 pm Page v Contents List of contributors Abbreviations and acronyms Preface vii xi xiii PART ONE: TRANSDISCIPLINARY ENQUIRIES INTO THE NATURE AND DYNAMICS OF DIGITAL GAMES AND VIRTUAL WORLDS 1. Online games and virtual worlds: business and policy developments 3 Christian Reimsbach-Kounatze and Sacha Wunsch-Vincent 2. Beyond billiard balls: transnational flows, cultural diversity and digital games 47 Aphra Kerr 3. User-created content in virtual worlds and cultural diversity 74 Mira Burri-Nenova 4. The concept and conditions of governance in massively multiplayer online games 113 Sal Humphreys 5. Second Life: game or play? sociological analysis of avatar diversity in Second Life 135 Sabina Misoch PART TWO: GOVERNANCE OF DIGITAL GAMES AND VIRTUAL WORLDS: CHALLENGES, OPPORTUNITIES AND LIMITATIONS 6. Governance of virtual worlds and the quest for a digital constitution 153 Vagios Karavas 7. State aid for digital games and cultural diversity: a critical reflection in the light of EU and WTO Law 170 Christoph Beat Graber v

6 Graber Prelims 28/10/09 12:18 pm Page vi vi Governance of digital game environments 8. Protection of minors and effect on cultural diversity: an example of content regulation in digital game environments 202 Miriam Sahlfeld 9. Advertising in digital games and cultural diversity: an EC media law enquiry 237 Thomas Steiner Index 269

7 Graber Prelims 28/10/09 12:18 pm Page vii Contributors Mira Burri-Nenova, Dr. iur., MAES, is a senior fellow at the World Trade Institute of the University of Bern. Her research interests are in the fields of international media and communications law, with particular focus on digital media and the pursuit of public interest objectives. Mira has published in various scholarly journals, including the Journal of International Economic Law; the Journal of World Trade; the Common Market Law Review; and the International Journal of Cultural Property. Mira is the author of EC Electronic Communications and Competition Law (Cameron May, 2007), as well as coeditor of the publications Free Trade versus Cultural Diversity (Schulthess, 2003); Digital Rights Management: The End of Collecting Societies? (Staempfli, 2004) and Intellectual Property and Traditional Cultural Expressions in a Digital Environment (Edward Elgar, 2008). Mira is a member of the editorial board of the International Journal of Communications Law and Policy. Christoph Beat Graber, Ph.D., Professor of Law, is head of the research centre i-call (International Communications and Art Law Lucerne) of the University of Lucerne Faculty of Law and leader of the NCCR ediversity Project. He teaches in the fields of media and art law, international trade law and legal sociology. Christoph Graber is a member of the Swiss Federal Arbitration Commission for the Exploitation of Author s Rights and Neighbouring Rights and advisor to various branches of the Swiss Government in the fields of IP, trade and culture. He is author of Handel und Kultur im Audiovisionsrecht der WTO (Staempfli, 2003); co-editor of Free Trade versus Cultural Diversity: WTO Negotiations in the Field of Audiovisual Services (Schulthess, 2004); Digital Rights Management: The End of Collecting Societies? (Staempfli, 2005); Interdisziplinäre Wege in der juristischen Grundlagenforschung (Schulthess, 2007); and Intellectual Property and Traditional Cultural Expressions in a Digital Environment (Edward Elgar, 2008), as well as a member of the board of editors of medialex, the Swiss journal of media law. Dr Sal Humphreys works in media studies at the University of Adelaide. Her research focuses on digital and online media with a special interest in digital games and social networking sites. She has published papers in a variety of vii

8 Graber Prelims 28/10/09 12:18 pm Page viii viii Governance of digital game environments scholarly journals including European Journal of Cultural Studies, Convergence, Journal of Communication and Critical/Cultural Studies, Media Arts Law Review, Australian Journal of Communication, and Media International Australia. Vagios Karavas is Associate Professor of Law and Director of the lucernaiuris-institut für Grundlagenfächer at the Law Faculty of the University of Lucerne. He teaches in the fields of legal sociology, Internet law, private law and theory of private law. He is the author of Digitale Grundrechte: Elemente einer Verfassung des Informationsflusses im Internet (Nomos, 2007) and Soziales Vertragsrecht: eine rechtsevolutorische Studie (Beiheft-Zeitschrift für Schweizerisches Recht, 2006; together with Marc Amstutz and Andreas Abegg). He is also a member of the editorial team of the online journal ancilla iuris. Dr Aphra Kerr is a lecturer and researcher at the Department of Sociology at the National University of Ireland Maynooth (NUIM), where she teaches courses in media, technology and Internet cultures. Her post-doctoral research examined the production and consumption of digital games in local and global contexts. Publications include The Business and Culture of Digital Games (Sage, 2006) and chapters in Understanding Digital Games (Sage, 2006) and A Strategy Guide for Studying the Grand Theft Auto Series (McFarland Press, 2007). She is the author of a number of journal articles related to digital media, innovation and culture. Current research projects explore social aspects of innovation in digital media; trust, cheating and the future of the Internet; and diversity and broadcasting. Aphra was a founding member of the International Digital Games Research Association (DiGRA), is a committee member of Women in Games (Europe) and runs the community website She is a member of the editorial board of Popular Communication. Sabina Misoch, Dr Phil., is Assistant Professor of Sociology at the University of Lucerne. Her research interests and fields of teaching are theories and analysis of computer-mediated communication, virtualisation of social processes, identity and self-presentation on the web, virtual proxies (avatars; Second Life), youth and Internet use, acceptance of technology, and the social impact of e-learning. Sabina is coordinator of an international project on the educational use of technology financed by the EC ( education and technology ) and editorial coordinator of the international journal Studies in Communication Sciences. Her publications include Online-Kommunikation (UTB, 2006) and Identitäten im Internet. Selbstdarstellung auf privaten Homepages (Uvk, 2004). Sabina is also an individual expert for the European Commission.

9 Graber Prelims 28/10/09 12:18 pm Page ix Contributors ix Christian Reimsbach-Kounatze is a consultant at the Directorate for Science, Technology and Industry of the Organisation for Economic Co-operation and Development (OECD) in Paris. He holds a Diploma in Information Engineering and Management and a Bachelor in Economic Engineering (Karlsruhe Institute of Technology). Before joining the OECD, Christian worked as a researcher at the Institute for Information and Market Engineering (Karlsruhe Institute of Technology) and at SAP Research, Karlsruhe, on topics related to electronic markets and peer-to-peer systems, as well as serviceoriented architecture (SOA). Miriam Sahlfeld received her education as lawyer in Germany where she also wrote her dissertation on state power and the Internet. After moving to Switzerland, Miriam worked as a university assistant in international public law in Basel and at the Swiss Secretariat of Economic Affairs (seco). Miriam and her family spent two years in Stockholm where she earned an LL.M. in European economic law. After two enriching years, she recently left the i- call (International Communications and Art Law Lucerne) research centre of the University of Lucerne to take up a position as a judicial secretary at the Swiss Federal Administrative Court. Miriam is married and has three small children. Thomas Steiner, MLaw, is a member of the i-call (International Communications and Art Law Lucerne) research centre at the University of Lucerne and a doctoral fellow within the project ediversity: The Protection of Cultural Diversity in a Digital Networked Environment, which is part of the Swiss National Centre of Competence in Research Trade Regulation. Within ediversity, Thomas is currently finalising his PhD thesis on advertising in online games and cultural diversity. Thomas was previously a trainee in the law firm of Kyjovský, Blažek and Partners in Brno (Czech Republic), at the Law Institute in Vilnius (Lithuania), as well as at the Chancellery of the Swiss Confederation. Dr Sacha Wunsch-Vincent is economist at the Science, Technology and Industry Directorate of the Organisation for Economic Co-operation and Development (OECD) in Paris. Previously, he was a Swiss National Science Fellow at the Berkeley Centre for Law and Technology (University of California) and a Visiting Fellow at the Institute for International Economics in Washington, DC. He has published and worked on newer generation trade and technology issues and has served as a consultant with a number of institutions such as the World Economic Forum. He teaches international trade at the Institut d Études Politiques de Paris (Sciences-Po) and the World Trade Institute. Sacha Wunsch-Vincent is the author of The WTO, the Internet and

10 Graber Prelims 28/10/09 12:18 pm Page x x Governance of digital game environments Trade in Digital Products (Hart, 2006). He has also published various studies on the role of the Internet, such as Participative Web and User-Created Content: Web 2.0, Wikis and Social Networking (OECD, 2007). Sacha holds a Masters and PhD in International Economics (MERIT, University of Maastricht and University of St Gallen).

11 Graber Prelims 28/10/09 12:18 pm Page xi Abbreviations and acronyms AB AVMS BBFC CCD CPC CPU CRC DiGRA ECJ ELSPA ESRB EULA FEPA GATS GATT GPL HS ICANN IGDA ISFE KEF MFN MMOG MMORPG MUD NT OFLC PEGI POSC PSB PvP Appellate Body Audiovisual Media Services Directive British Board of Film Classification UNESCO Convention on the Protection and Promotion of the Diversity Cultural Expressions Central Product Classification (UN) central processing unit Convention on the Rights of the Child International Digital Games Research Association Court of Justice of the European Communities Entertainment and Leisure Software Publishers Association Entertainment Software Rating Board end use licence agreements Federal Entertainment Protection Act General Agreement on Trade in Services General Agreement on Tariffs and Trade GNU General Public Licence Harmonized Commodity Description and Coding System Internet Cooperation for Assigned Names and Numbers International Game Developers Association Interactive Software Federation of Europe Kommission zur Ermittlung des Finanzbedarfs der Rundfunkanstalten (Commission for the Determination of the Financial Needs of Public Service Broadcasters in Germany) most favoured nation massively multiplayer online game massively multiplayer online role playing game multi-user dungeon national treatment Office of Film and Literature Classification Pan-European Game Information PEGI Online Safety Code public service broadcaster player versus player xi

12 Graber Prelims 28/10/09 12:18 pm Page xii xii SCM SIEA SL SSNIP TIGA ToS TRIPS TVWF UCC UNESCO UNICEF USK VCLT VSW WIPO WoW WTO Governance of digital game environments Agreement on Subsidies and Countervailing Duties Swiss Interactive Entertainment Association Second Life Small but Significant Non-transitory Increase in Price The Independent Games Developers Association Terms of Service Agreement on Trade-Related Aspects of Intellectual Property Rights Television without Frontiers Directive user created content United Nations Educational, Scientific and Cultural Organization United Nations Children s Fund Unterhaltungssoftware Selbstkontrolle Vienna Convention on the Law of Treaties virtual social world World Intellectual Property Organization World of Warcraft World Trade Organization

13 Graber Prelims 28/10/09 12:18 pm Page xiii Preface As the economic value of digital game environments grows, now easily exceeding the gross domestic product of some middle-sized countries, and as their intertwining into cultural and societal activities progresses, so the interest of policymakers, academia and the wider public intensifies. Yet, although digital games and virtual worlds have gained prominence as a topic in academic scholarship in the past few years, we are still far from a comprehensive understanding of their nature, dynamics and impact. This is a shortcoming, which is particularly distracting when translated into current lawand policymaking. In fact, many of today s regulatory interventions merely transplant models from conventional media regulation and reveal that policy- and rulemakers are at a loss when approaching these novel digital spaces. While an invaluable and sizeable amount of knowledge on digital games and virtual worlds has already been gathered and is continuously being enriched in the fields of media, communications and cultural studies, as well as in sociology and psychology, very little of it has flowed into legal analyses. The profound understanding of the complex phenomena and processes occurring in-play, such as avatar representation, role-playing, community and reputation building, incentives and dynamics of play, individual and group creativity, has found no (or insufficient) reflection in the design of regulatory intervention. Very interestingly, this occurs precisely at a time when we are observing an expansion of regulatory efforts at national, regional and international levels that have a serious impact upon game environments and their evolution as a medium of creative play and social interaction. This fragmentation of the debates and the increasing discipline gaps are rather unfortunate since digital games as a societal, economic and cultural phenomenon have repercussions in multiple directions and could never neatly fit the confines of a single discipline. The regulatory tools applied would need to take into account all the complex processes unfolding within these game environments processes that may be fundamental for sustaining creativity and innovation, and for attaining a number of public interest objectives. A topic that fits precisely into this contextual matrix and that has not yet entered the academic research as related to digital games is that of cultural diversity. This is despite the fact that cultural diversity has become a policy objective of considerable weight especially since the UNESCO Convention on the xiii

14 Graber Prelims 28/10/09 12:18 pm Page xiv xiv Governance of digital game environments Protection and Promotion of the Diversity of Cultural Expressions, which has been in force since March 2007 and has been ratified by almost 100 states. It is the objective of this book to remedy at least some of these drawbacks by tackling fragmentation in existing research and by contributing to a more comprehensive and fine-grained understanding of digital game environments, which is a precondition for addressing any of the pressing governance questions posed. While we have mentioned the instances of misplaced state intervention, governance is understood broadly in the present book as ranging from actual regulation over social conventions to the constraints of the code and the business models in digital games. The second distinct objective of this publication is to introduce and explore cultural diversity as one of the key issues of emerging importance, accounting for the augmented societal and cultural value of games and their becoming an essential part of the global media landscape. Cultural diversity also offers a unique perspective on digital games and their governance, which is both new and potentially fruitful as a focal point of the discussions, since it allows linking the studies of games in various disciplines and possibly leads to a more nuanced and sophisticated level of analysis. It also allows the integration of substantive legal analyses in particular with regard to the protection and promotion of diverse cultural expressions, and the response to some discrete questions raised in this context: what do policymakers mean when they speak of cultural diversity in digital game environments? Is the cultural diversity rationale of state intervention still viable in these novel digital spaces? What are its dimensions and what are the right tools for its achievement likely to be? To address all these questions appropriately, the book is structured in two parts. It begins with a transdisciplinary enquiry into the nature and dynamics of digital game environments, combining approaches from economics, sociology, law, media and communication studies in order to set the scene for the more specific investigation of governance issues in the second part. At the outset, Reimsbach-Kounatze and Wunsch-Vincent offer a detailed analysis of the contemporary business models and value chains in the markets for digital games and virtual worlds, the understanding of which is critical to the design of any regulatory tool, and sketch some of the emerging policy considerations. Kerr goes a step further and asks specific questions with regard to the promotion of cultural diversity taking into account the complex global political economy of digital games creation, production, distribution and consumption. Burri-Nenova takes up the topic of cultural diversity from a legal perspective and looks into the dimensions and the dynamics of user-created content in digital game environments, asking whether user creativity could potentially cater for diversity of expressions, and whether state intervention could foster the creative processes or rather harm them. With a view to further clarifying the concept and the potential limitations of cultural diversity, two contributions

15 Graber Prelims 28/10/09 12:18 pm Page xv Preface xv based on in-game empirical research follow. Humphreys looks specifically at the ways in which the decisions of corporate powers may determine areas of discursive freedom (and thus diversity) in massively multiplayer online games such as World of Warcraft and Everquest, while Misoch explores the case of diversity of in-game identities in Second Life. The second part of the book clarifies the contours of governance in digital game environments, as well as the challenges and the limitations these pose for regulators. It begins with a theoretical introduction by Karavas of the concept of governance in online worlds and the broader discussion on the modes of state intervention in cyberspace. The chapters which follow take up some discrete questions related to state regulation of game markets: why do governments choose to subsidise game industries? Is this a legitimate intervention? What is the newly formulated role public service may play? Answers to these pressing questions are provided by Graber from the perspective of European and international economic law. The final contributions by Sahlfeld and by Steiner investigate two specific areas the protection of minors and advertising, looking also at the impact of regulation on cultural diversity. While the protection of children has been a lasting preoccupation of policymakers and many states have felt compelled to intervene, advertising and its effects may potentially be equally important. The present book is the outcome of the international workshop Governance of Online Worlds and Cultural Diversity organised in September 2008 by the research centre i-call (International Communications and Art Law Lucerne) of the University of Lucerne within the framework of the ediversity project. This project, focusing on the legal protection of cultural diversity in a digital networked environment, is a part of the Swiss National Centre of Competence in Research (NCCR): Trade Regulation funded by the Swiss National Science Foundation. It is our hope, as editors, that the unique combination of viewpoints and methods presented here will stimulate a more comprehensive debate on the governance of digital game environments and its particular dimension of protection and promotion of cultural diversity, and reveal novel ways of approaching these complex issues in practice. * * By way of guidance to the readers, it should be noted that all websites, unless otherwise specified, were last accessed on 10 June The editors thank Susan Kaplan and Thomas Steiner for their invaluable assistance.

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