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What's the current state of the video games industry in Europe?

The European Audiovisual Observatory, part of the Council of Europe in Strasbourg, has published its latest report, "Legal challenges and market dynamics in the video games sector". This is the first time the Observatory has ever looked at the gaming industry and the result is a comprehensive round-up of the current state of the legal and market landscape in Europe.

Authored by leading experts from across Europe, this new report highlights the rapid evolution of this sector, from market growth and technological advancements to the accompanying regulatory frameworks and user protection. Covering industry structure, economic models, intellectual property (IP) protection, and player safety, this new report is divided in three main parts and provides key insights into one of Europe's most dynamic creative industries.

Key findings

The first part of the report (Chapters 1–3) opens with a chapter on the structure and dynamics of the video game industry. 

Chapter one charts its transformation from a niche market to a powerhouse industry worth nearly USD 187 billion in global revenues. European video game development has benefited from both technological progress and changing consumer behaviour, with mobile gaming now a dominant force alongside console and PC gaming. Economic models have also diversified, with free-to-play and subscription models complementing traditional one-time purchase systems.

Chapter two highlights the strategic importance and key issues of the European video games industry. Key European markets such as the UK, France, and Germany are defined as established players, with Sweden and Poland emerging as important new creative centres. This chapter explores the need for better access to skilled talent and the competitive threats posed by foreign acquisitions. In addition, technological advancements and the rise of platformisation present both opportunities and challenges for innovation and market presence.  

Chapter three delves into definitions and asks what constitutes a video game. The author underlines the importance and difficulty of defining “video games” in order to clarify the regulatory framework that applies to the sector. They note a shift from physical products to interactive digital services, with three main segments: console games, PC games, and casual mobile games. The difficulty in defining video games may have a bearing on compliance with laws covering IP legislation, consumer protection, and AI regulations. 

The second part of the report (Chapters 4–6) addresses the protection of video games, focusing on IP rights, and support to video games through public funding. 

Chapter four examines the EU legal provisions and national approaches to the protection of video games. The author delves into the intricate IP landscape in the EU, where legislation can offer various types of copyright protection for the visual, audio, and software elements which make up a video game. Challenges clearly arise in harmonising copyright approaches across the various national jurisdictions, with landmark cases like Nintendo v. PC Box shaping policy. 

Chapter five discusses IP rights infringements and identifies piracy practices that negatively affect rightsholders’ revenues. These include, for example, the unauthorised copying and distribution of video games, game cloning, or the unauthorised resale of game product keys on the grey market and represent a significant threats to IP rights in the video games sector. This chapter also outlines the industry’s strategies to combat these practices, including both legal and technical protective measures.  

Chapter six reviews public support for the video games sector and investigates which European countries offer funding through cultural and economic grants. The report notes the diversity in funding trends across Europe, with countries such as France and Germany leading public funding initiatives, while Northern and Eastern Europe focus more on private investment. The author concludes that a supportive framework is crucial for industry growth and global competitiveness.

The third part of this report (Chapters 7–10) focuses on protecting video game users. 

Chapter seven addresses data protection, emphasising compliance with the GDPR, as game developers collect and process vast amounts of personal data from players. Privacy challenges include obtaining informed consent from gamers and balancing data use by gaming platforms with the respect of players' rights. Cybersecurity concerns and the proposed Cyber Resilience Act are also discussed, reinforcing the need for transparency and trust in data handling. 

Chapter eight explores the protection of minors, and highlights industry-led tools and solutions which help in this sense, such as age classification systems and parental controls to address risks such as gaming addiction and toxic online interactions. Monetisation methods, including loot boxes and microtransactions, pose unique challenges. The chapter underlines the need for strong protective measures.

Chapter nine focuses on accessibility and inclusion within the industry, introducing the Game Accessibility Paradox, which weighs inclusivity against inherent gameplay challenges. Inclusive design considerations, along with accessible work environments for disabled developers, underscore the need for greater inclusivity in both game design and industry workplaces. 

Chapter ten discusses how hate and extremist activists exploit gaming platforms to spread their message. Given the popular appeal of video games, this chapter emphasises the need for systematic research and preventive measures to address radicalisation risks without stigmatising gaming as a whole.

In conclusion, this report underlines the critical balance between growth, regulation, and protection within Europe’s video game industry. By examining the complex dynamics between market pressures, regulatory compliance, and player's rights, it offers must-read insights for policymakers, industry stakeholders, and consumers.