The All-India Game Developers’ Forum (AIGDF), in partnership with the Indian Governance and Policy Project (IGAP), has released its latest report titled ‘Anticipated Impact of the Digital Personal Data Protection Act, 2023 on the Online Gaming Sector’.
This report has evaluated the profound implications of India’s recently enacted Digital Personal Data Protection (DPDP) Act, 2023 on India’s nascent gaming industry, once the law is implemented.
The report has examined specific data protection compliance requirements across categories of online games (Free-to-Play games, Real-Money Games, and Web3 gaming). Further, the report has also offered recommendations to the Central Government on crucial clarifications and potential exemptions for gaming, especially concerning parental consent, the handling of children’s data, and compliance timelines for data processing restrictions.
As per the report, the DPDP Act imposes several new compliance obligations, such as granular notice and consent requirements, on gaming companies processing personal data across categories. However, the impact of the law may vary significantly across different gaming formats.
Furthermore, compliance requirements for this category of games may be significant as the target audience may include players under the age of 18, for whom the DPDP Act prescribes additional obligations to data fiduciaries.
While the impact on this category of games may be limited, notice and consent requirements, along with sectoral regulations may impact KYC processes implemented within games.
Additionally, interaction between the DPDP Act obligations and Web3 gaming elements such as digital avatars, blockchain, pseudonymous identities and psychophysical data is a potential grey area leaving scope for clarification from regulators.
Moreover, Free-to-Play games, in particular, are expected to face new challenges with implementing parental consent, data processing restrictions, and prohibitions on behavioural monitoring and targeted advertising aimed at children, all of which may fundamentally impact the business models of these games.
Non-compliance with the DPDP Act could result in penalties as high as Rs 250 crore (approximately USD 30 million), putting added pressure on Indian gaming companies, including MSMEs, to meet stringent data protection standards once the law is in effect.
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Commenting on the development, Roland Landers, AIGDF Spokesperson, said, “The Digital Personal Data Protection Act is a landmark law for India, and its impact on the gaming industry, like other digital sectors, cannot be overstated. AIGDF’s report lays out the expectations and challenges that gaming companies must embrace to adapt to compliance changes, while maintaining their innovative edge in one of the world’s fastest-growing markets.”
Click here to access the full report.
