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Cloud Gaming - Opportunities and Risks for Esport

Cloud Gaming - Opportunities and Risks for Esports
National and international events impressively demonstrate the increasing professionalism of the esport scene. Germany is no exception, even if there is still an immense growth potential that remains untapped at the moment. In the meantime, however, the leap to another technical innovation is not far off: cloud gaming. Although industry giants still seem to be in a phase of self-discovery here, it cannot be overlooked that more and more market companions are positioning themselves and developing business models. However, with the elimination of the limiting factor of insufficient Internet bandwidth, at the latest, nothing stands in the way of the establishment of cloud gaming for the mass market. The next logical step of connecting with esport is then only a matter of time.

What is Cloud Gaming?

Cloud Gaming basically describes the utilisation of cloud infrastructure for gaming by using the processing power of cloud servers with pre-installed software. The own PC only fulfils the function of sending user input to the cloud and then playing back the processed information via output media. The advantages for users are obvious: no longer need for expensive hardware to be purchased and regularly updated, but replacing it by subscription. On the user side, only the (much cheaper) control elements and a fast Internet connection are required, which – depending on the type of game – should not fall below 50 MBit/s to avoid unpleasant input lag. In the future, users will then only pay a (monthly) fixed price that covers both the hardware and a provider-dependent portfolio of games. Especially for regions where the general population tends not to be able to afford high-performance hardware, this technical solution offers immense potential for assertion.

Why Cloud Gaming in eSports?

Even if there are no concrete efforts to let eSports take place in the cloud, there are no obvious reasons why this technology will not be used for eSports in the future. The pandemic threat posed by COVID-19, which is likely to continue for some time, could act as an accelerator of technical developments here, as it does in other sectors. Cloud gaming, for example, offers the possibility of transferring eSport events from the physical to a (more) digital level. The advantages are obvious here as well: The organisational effort and the risk of errors are reduced enormously if there is no technical dependency on a variety of clients, but a single platform. Cloud gaming also offers a far more effective and efficient way of controlling compliance with the rules of the game and the realisation of other economic interests such as advertising. At the same time, a certain pull effect of eSport is conceivable, as the participation requirements for the individual are significantly reduced if the game can be played immediately after registration.

Legal opportunities and risks

A fix technical infrastructure offers great opportunities to technically standardize the existing legal framework such as the implementation of youth protection or commercial labeling. Of course, other regulatory requirements such as the need for broadcasting licences in the case of transmission are not affected if the games are streamed for the public. However, the involvement of an additional technical service provider may lead to relocation of legal responsibilities in this regard. When making competitive cloud gaming offers available, the contractual question of the choice of law and the consideration of mandatory provisions of national consumer protection law also arises.

The cloud provider as a further player must be considered in terms of licences. Framework agreements might be adapted accordingly by taking into account the technical integration of this player. This applies at least to the extent that it cannot be assumed that the exploitation rights to the games granted by the publisher are covered by the exploitation by cloud gaming on the basis of existing licenses. The same applies of course for individual streamers who make "their game" publically available via stream.

Nothing changes in terms of data protection law. Does it?

Cloud Gaming is perspectively accompanied by the extensive processing of personal usage data. For technical reasons, all user control commands are processed by the platform and allow technically new analysis options for game performance especially with the help of AI. Even the development of completely new game mechanics seems possible. It must be taken into account that the General Data Protection Regulation is basically applicable even if the cloud servers are located outside of the EU due to the so-called marketplace principle. Future business models that presuppose the processing of personal usage data are thus subject to data protection requirements such as those of international data protection law.

Summary: Cloud Gamning and Esports

Cloud gaming is a comparatively new way of making gaming software accessible to the consumer market. Due to the obvious advantages such as standardisation, it is to be expected that this development will also find its way into the world of sports in the middle-term, whereby some legal particularities would have to be taken into account. Especially legal responsibilities for existing regulatory requirements would have to be reassessed and licenses adjusted. The commercial exploitation of personal usage data would have to take the requirements of the General Data Protection Regulation into account, even if the gaming servers are located outside the EU.