GamesBeat: Now that you’ve left and you’re out in the industry and looking to invest, what are some things that are interesting to a lawyer about what’s happening in the game industry right now?
Offner: There are two hats I wear – lawyer and investor. The two overlap to a great degree but not always. As an investor, you would probably agree that there’s a fair amount of technological change happening in the interactive entertainment industry, driven by the CPU chips and GPU chips and falling costs. We’re going to see the rise of the cloud and connected mobile devices. We’re also going to see a further digital transformation of the interactive entertainment industry. With examples like Oculus, the Rift is plugging into a laptop or desktop that didn’t exist 10 years ago. As a result, you can have a completely immersive VR experience. So my first answer is that technology is going to change interactive entertainment for the better.
As lawyer, I think all things are mobile and all things are international. We are increasingly challenged, as lawyers, to provide good business and legal advice as the nature of the industry changes very rapidly for us. What’s a good answer for the states may not be a good answer for the EU, for example, with respect to something like privacy or even contract enforcement.
GamesBeat: Privacy seems to have gotten pretty complicated with things like mobile devices and the ability to track so many things. You can have anonymous data, but if you can use that anonymous data to sort of triangulate on someone’s identity, you can still figure out who that person is. It seems like something everyone has to be careful about.
Offner: There’s a legal answer and a practical answer. The legal answer is you’re absolutely right. There’s going to be privacy regulation at some point that better addresses those issues, but when and how I don’t know. Practically, when you look at these massive social networks, the amount of effort and energy that would have to be expended to do that type of triangulation and targeting seems maybe a little extreme. But I do think we’re going to see, on a federal level, more regulation and legislation like what the Attorney General promulgated for mobile devices in California a year or two ago.
GamesBeat: Do you have advice for companies on how to deal with GamerGate issues? There seem to be lots of different legal questions that companies are faced with when trying to figure out where they stand or communicate there.
Offner: I’ll address GamerGate this way. I find it disturbing and disappointing and offensive, especially because I have a daughter who likes to play games on my iPhone. Any advice I would give to any client relative to Gamergate has to be fact-specific, though. Generally, bullying and sexism and racism should not be tolerated and can’t be tolerated in our industry.
In the past two years, I have done deals and contracts with different companies – mobile companies and online companies – related to monitoring the type of exchanges that are going on in company game chat rooms and so on. They have to be careful that there’s not sexist or racist or bullying types of behavior being exercised in those forums. But that technology, I know, is not perfect. It has a ways to go. Collectively as an industry we have to work at addressing the problems that have arisen with GamerGate.
GamesBeat: There’s the issue of whether a company spokesperson should say anything at all. Is there advice on that front?
Offner: I’m going to bore you with my answer, but I’m not going to offer any general advice. I’d have to look at any client’s particular fact situation and give my recommendation based upon the facts and circumstances of what’s going on, whatever the particular situation as it relates to those issues in general.
GamesBeat: Would you say that the situation has become more complex, though, as far as your legal exposure? Not only in just the press releases that you issue, but what you do on social media.
Offner: Something like GamerGate illustrates, for any company, the challenges that we face related to social media. A lot of companies, a lot of my clients, have been beneficiaries of a growing social media base. Zynga built a business out of Facebook games. As much as we’ve all been the beneficiaries of social media, though, we’re now going to have to grapple with some problems there. Gamergate and situations like that are reflective of things that we as an industry have to address with social media.
GamesBeat: You mentioned that you think privacy regulation is coming. I’m wondering what game companies will have to worry about or what’s high on the list of things they should be aware of. More strict regulation with the Children’s Online Privacy Protection Act (COPPA) has kicked in as far as how you deal with children online. Is that impacting the game business much?
Offner: On the privacy side there’s a new, enhanced checklist, especially here in California. You have to be sensitive to the COPPA issues, not getting the personal information of users under the age of 13, not doing it inadvertently or collecting enough analytics that you can figure out who this person is. The regs are out on COPPA. Things have tightened up, and I think companies are sensitive to that.
You also have to grapple with a couple of other issues on the list. One is the sales tax issue. We have a couple of clients dealing with that, where you have in-app purchases where taxes may be due. You also have to deal with gift card issues and the various state regulations related to that.
You have to deal with whether your TOS and privacy policies will work beyond the United States. It may be fine domestically, in Irvine or Silicon Valley. But will it work with European safe harbor or key markets in southeast Asia? You’ve put your finger on an area where the checklist is large, unfortunately, for our clients. It’s not always so simple. It’s the privacy and e-commerce checklist — making sure you’re compliant.
As more revenue is generated online, and increasingly through mobile, these are issues that companies in the game industry will have to be more and more careful about. Otherwise they could do something for a couple of years and then end up with an unpleasant tax bill. That’s something we all want to avoid.