DST14700 - Application to Online Games

Identifying user content should normally be straightforward. However, it can be more challenging in services which involve user interaction that extends beyond just communication and the sharing of information.

The application of the legislation to online games can be particularly challenging. There are a wide variety of games and the significance of interaction between users and user content will vary significantly depending on the game.

In HMRC’s view, each online game should be viewed as a separate online service. This means each game should be tested individually to determine whether the social media conditions are met.

Multiplayer functionality

Simply having an online multiplayer feature will not on its own mean a game meets the social media definition. If there is limited interaction between the different players and users do not contribute to the gaming content then the game will not meet the definition, even if there are a lot of users playing the game.

Some multiplayer games will provide functions enabling users to communicate with each other. This will not necessarily mean the game is promoting interaction between users. If this communication is an ancillary feature of the game and the user’s enjoyment is primarily determined by the quality of the gameplay and software, the game will not meet the definition.

Example A

Group ABC is a games publishers and software house which produces the celebrated games franchise, Pro Figure Skating. The game is retailed at £30 to customers who are able to play against AI to lead their character to success in major international figure skating competitions. The game includes a multiplayer function where gamers can compete against one another. The multiplayer function is now operated on an online platform and there are competitions between users. Users can message other users during these competitions, but the game play is largely identical between the single player and multiplayer versions. The only difference is the player is competing against other user’s scores rather than the AI.

Pro Figure skating is unlikely to meet the social media service definition. Although there is interaction between users, it seems likely this is an ancillary part of the game. The multiplayer facility does not fundamentally change the gaming experience compared to the offline game. There is just a limited function for users to communicate with each other. This makes it likely users buy the game to enjoy the quality of the gameplay produced by ABC rather than to interact with each other. In addition, the monetisation strategy might indicate the game is not a social media service. The provider is not trying to maximise the number of users on the platform, and the quality of the gaming experience does not seem to be strongly correlated with the size of the user base.

Massively multiplayer online games

This implies there has to be something more than just an online multiplayer function to bring a game within the social media definition. Games which are more likely to satisfy the conditions are those where the ability to play against other users is a central part of the gaming experience and where the presence of other users significantly enhances the game.

Some massively multiplayer online (MMO) games rely on users to create network effects in similar ways to social networks. These games are more likely to meet the social media service definition. This is because the business’ strategy will usually be to build a large user base that is engaging with the platform on a sustained and continuous basis. The business will therefore often provide the game for free and seek to monetise the game through advertising or in-game purchases. In many of these games, the enjoyment of the multiplayer game depends a lot upon interaction and the active content contribution of other users.

These games may include some of the following features:

• Users play primarily against other users rather than an AI
• Users are able to build virtual worlds and environments in which all users operate
• Users are able to create challenges and missions
• Users are able to exchange things with other users within the game
• Users are able to communicate with other users (e.g. by text or audio)
• The interaction with other users facilitates the user’s progress or competitive standing in the game

MMOs and user generated content

The importance of user network effects and interaction between users to many MMO games mean they are likely to meet the first social media service definition. This is especially true when the online service provides incentives for users to interact with other users, for instance providing new features which ease their progress through the game.

Consequently, the second condition will often determine whether an MMO game is in scope. An important question consequently arises about what is meant by user generated content in this context.

In HMRC’s view, the legislation draws an implicit distinction between content provided by users and content provided by the business. It is asking whether the content enhances the service in ways which are separable and divisible to the actions and content of the business.

HMRC expects that content will normally have some degree of permanence for it to enhance other users’ utility. If the user’s actions do not have some lasting impact on the gaming environment or on another user’s experience interacting with the game then the former user’s actions are unlikely to be creating content which is separable from that created by the online service.

The mere act of playing the game would not amount to creating user generated content.

Equally, the exchange of non-user generated content between users does not involve creating user generated content.

Example B

User A plays a football simulation game against the computer. She moves the controller to the left and the player she controls moves in response to her command.

She then plays against her friends in the online player mode. She again controls her players.

This movement of the players is not user generated content. She is not creating content which is separable from the game’s software, she is just utilising it as part of the game.

Example C

User B swaps a sword for a pitchfork with User C. Both items are part of the core game provided by Group BCD. The exchange of these items does not involve the creation of new user content.

However, there may be other areas where MMO games include the creation of new user content. In some cases, this user content can be a significant, even a fundamental, part of the game.

For example, games which rely on users to build or create parts of the virtual landscape or contribute new playable items in the game will usually involve the user content.

Communication between users will also involve user generated content, in the same way it does when applying the definition to a traditional social network. However, whether this feature amounts to a significant feature of the game as opposed to an ancillary element is likely to involve a comparison of the value drivers between the platforms produced content and the ability to communicate with other users.

Example D

Group BCD provides an online chess game. Users can compete against the computer or against other players. There is an instant messenger function which allows gamers to talk to one another during the game.

As in example B, the movement of the pieces does not amount to user generated content. However, the communication between users via the text function is user generated content. The group will therefore need to decide whether it amounts to a significant feature of the game. This will depend on the facts. Relevant considerations will include whether users play the game for the social element or because they just want to play chess. In this particular example, it seems likely the text wouldn’t amount to a significant feature of the game.