Monetizable items: the 7 legal pitfalls to avoid

The video game industry is undergoing a major transformation with the emergence of monetizable digital items. Avoid these 7 legal pitfalls!

The video game sector is experiencing a major economic transformation with the emergence of monetizable digital items. These virtual assets, which may take the form of equipment, characters, land or cosmetics, now constitute a central monetization lever for many studios.

However, integrating these mechanisms into your game raises significant legal questions, particularly in the context of the new French legislation. For gaming startups, navigating this complex regulatory environment represents a considerable challenge, where legal expertise becomes a key success factor.

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1. Legally structuring your development studio

Even before addressing the aspects specific to monetizable digital items, setting up a suitable legal structure is a fundamental step for any gaming startup.

Choosing the appropriate corporate form

The choice between an SAS, an SARL or another legal form must take into account numerous factors: number of founders, the need to raise funds, the desired governance flexibility, or the tax and social security regime applicable to directors. For studios developing games featuring monetizable digital items, credibility with financial partners and regulatory authorities may also influence this choice.

The preliminary strategic analysis provided by a lawyer for online games enables you to identify the corporate form best suited to your specific project. Their approach takes into account not only the classic issues involved in any company formation, but also the specificities related to the video game industry and to business models based on monetizable digital items.

Drafting tailored articles of association and shareholders' agreements

The drafting of the articles of association and any shareholders' agreements is of particular importance for gaming startups. These documents must accurately reflect the allocation of roles, powers and economic rights among the founders. They must also provide for exit and dispute resolution mechanisms.

The tailored legal architecture developed by an adviser ensures that your governance is aligned with your strategic vision. Their expertise helps you anticipate potentially conflicting situations and secure the long-term viability of your studio, an essential element for projects involving long-term commitments to a community of players.

2. Robustly protecting your intellectual property

In the video game industry, intellectual property is the central asset of your company. This dimension takes on heightened importance when your game incorporates monetizable digital items, whose value largely rests on their uniqueness and appeal.

Securing rights over the code and assets

Legally securing all the components of your game requires a methodical approach. It covers the source code, graphic assets, music, texts, as well as all the distinctive elements that define the identity of your game.

The comprehensive protection strategy devised by a gaming-expert lawyer specializing in software and database law enables you to map out all of your intellectual creations and apply the appropriate protection mechanisms: trademark filings for titles and logos, filings with the APP (Agency for the Protection of Programs) for the code, assignment agreements for external contributions, and so on.

Legally defining the status of digital items

The legal classification of monetizable digital items is a particularly complex issue. Depending on their technical design and the rights granted to players, these assets may fall under different legal regimes.

The in-depth legal analysis carried out by a specialist in online gaming law enables you to precisely define the status of your digital items: a license to use, a limited right of ownership, or some other hybrid classification. This legal clarification, reflected in your general terms of use, secures your relationships with players and minimizes the risk of future disputes.

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3. Drafting GTU and GTC that comply with specific requirements

Your game's General Terms of Use (GTU) and General Terms and Conditions of Sale (GTC) form the contractual foundation of your relationship with players. For games incorporating monetizable digital items, these documents are particularly important and must meet specific requirements.

Clarifying the nature of the rights granted to players

Your GTU must precisely define the exact nature of the rights players acquire over digital items: is it a simple revocable license to use? A limited right of ownership? Do these rights survive in the event the game is modified or shut down?

The precise contractual engineering developed by a digital law practitioner enables you to draft clear and legally robust clauses, tailored to the specificities of your business model. This contractual clarity is a factor of trust for your community and an effective shield against any potential claims from players.

Incorporating the requirements of the SREN Act

The new French legislation imposes specific disclosures in your GTU, in particular regarding:

• The description of the chance-based mechanisms used to obtain digital items
• The usage restrictions applicable to these items
• Players' rights regarding transfers to third parties
• Information on the risks associated with excessive gaming

The targeted regulatory expertise provided by a lawyer guarantees the compliant incorporation of these requirements into your contractual documents. Their support also enables you to anticipate potential developments in this still experimental framework.

4. Implementing a robust age verification system

French legislation expressly restricts access to games offering monetizable digital items obtained by chance to players who are of legal age. This restriction requires the implementation of an effective age verification system, going beyond the declarative mechanisms traditionally used in the video game industry.

Reconciling effectiveness and user experience

The challenge lies in implementing a system rigorous enough to satisfy legal requirements, while preserving a smooth user experience. Various technical solutions exist, ranging from identity verification using official documents to payment systems with integrated verification.

The pragmatic and legally secured approach designed by a digital law adviser enables you to identify the optimal solution for your specific context. Their expertise helps you balance regulatory requirements with user experience considerations, thereby avoiding the creation of excessive friction in your acquisition funnel.

Documenting your due diligence

Beyond the technical implementation, it is essential to rigorously document your age verification process in order to demonstrate your due diligence in the event of an inspection. This documentation is a crucial element of your compliance program.

The structured methodology developed by a lawyer helps you build a compelling file, including the technical choices made, the tests carried out and the corrective measures implemented. This traceability considerably strengthens your position should the authorities raise any questions.

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5. Ensuring GDPR compliance in data collection

Setting up age verification and account creation systems necessarily involves collecting players' personal data. This dimension brings your activity within the scope of the General Data Protection Regulation (GDPR), with reinforced obligations where this data relates to the identity of users.

Mapping your data processing activities

A precise mapping of the data collected and the processing carried out is the starting point of a GDPR compliance approach. This mapping must identify the precise purposes of each processing operation, its legal basis, and the contemplated retention periods.

The tailored data audit conducted by a personal data expert specializing in CNIL matters enables you to clearly visualize your data flows and identify potential risk areas. This systematic analysis forms the basis of an effective and proportionate compliance program.

Putting in place the appropriate safeguards

The GDPR requires the implementation of technical and organizational safeguards suited to the sensitivity of the data processed. For games involving identity verification, these safeguards must be particularly robust.

The bespoke protection framework built with the help of a lawyer integrates all the dimensions of compliance: appropriate security measures, processes for managing data subjects' rights, documentation of processing activities, and notification mechanisms in the event of a data breach.

6. Structuring your relationships with technical service providers

The development and operation of a video game generally involve numerous technical partners: hosting providers, payment solution providers, cloud service providers, and so on. These relationships take on a particular dimension when your game incorporates monetizable digital items, in particular because of the associated security and compliance issues.

Securing contracts with your essential service providers

Drafting solid contracts with your technical service providers is a priority, particularly for those involved in managing digital items or financial transactions. These contracts must precisely cover the expected service levels, the responsibilities of each party and the warranties provided.

The sector-specific contractual expertise of a lawyer well-versed in gaming issues enables you to draft balanced and protective agreements. Their involvement ensures that the aspects critical to your business (availability, security, regulatory compliance) are adequately covered by your contractual commitments.

Clarifying the status of data and digital assets

Your contracts must clearly define the status of the data and digital assets entrusted to your service providers: who remains the owner? What uses are authorized? What are the obligations in the event the relationship ends?

The structured and forward-looking approach proposed by a legal adviser helps you anticipate critical scenarios and secure your digital assets. Their approach also enables you to identify the risks of excessive dependence on certain service providers and to develop appropriate mitigation strategies.

7. Anticipating reporting obligations to the authorities

The new French legislation imposes specific reporting obligations on companies offering games with monetizable digital items. These obligations, primarily towards the National Gaming Authority (ANJ), are an essential prerequisite for the lawful operation of your game on French territory.

Preparing your declaration to the ANJ

The declaration to the ANJ must be prepared with particular care, as it constitutes the first impression the regulator will have of your activity. This declaration must demonstrate your understanding of the regulatory issues and your ability to implement the required protection measures.

The comprehensive strategic support provided by a lawyer for online games turns this administrative obligation into a positioning opportunity. Their expertise enables you to present your project in its most favorable light, by highlighting the compliance elements and protection measures you have implemented.

Anticipating other sector-specific obligations

Beyond the ANJ, your activity may subject you to other reporting obligations, in particular towards the CNIL for personal data processing or towards the tax authorities for certain specific regimes.

The 360° regulatory perspective brought by a sector expert lawyer enables you to identify all the obligations applicable to your specific activity. This integrated approach spares you unpleasant surprises and enables you to approach the launch of your game with peace of mind.

Turning compliance into a competitive advantage

In the emerging ecosystem of games incorporating monetizable digital items, legal compliance should not be perceived as a mere regulatory constraint, but as a genuine strategic asset. By anticipating legal requirements from the very design stage of your game and putting in place responsible governance, you build an environment of trust conducive to the lasting engagement of your community.

The complexity of the applicable legal framework, particularly in the French context with the new experimental legislation, requires specific expertise to navigate effectively in this constantly evolving environment. By incorporating these seven essential legal recommendations into your entrepreneurial approach, you lay the foundations for sustainable and secure growth for your gaming startup.

Our firm supports video game studios at every stage of their development, by offering legal advice tailored to the specificities of this innovative industry. We remain at your disposal to discuss your project and help you meet the legal challenges associated with integrating monetizable digital items into your game universe.