Coming to Steam: second-hand game sales? A few words on the Valve ruling in France

A few days ago the European gaming community was electrified with a news story from France. On 17 September a French court issued a ruling, referred to as „monumental” or „landmark” by some commentators (including the plaintiff), in the case of a French consumer protection association UFC-Que Choisir brought against Valve, the operator of Steam.

According to the ruling, issued after almost 3 years of proceedings, the court stated that Steam is not allowed to prohibit its users, in their Terms and Conditions, from selling their digitally purchased games. In the court’s opinion, the reselling of digital entertainment licenses is not prohibited on any legal grounds. Therefore, it should be allowed, just as it is the case with physical copies of video games, due to the fact that “the author no longer has control over subsequent resales” once they’ve exhausted their right to the material by authorizing the initial sale.

The consequences of this ruling could potentially be significant for the whole digital video game retail market and expand from the French jurisdiction to the whole Europe, provided, of course, that the ruling is upheld by the court of appeal. Steam and other operators would have to remodel the functionalities of their platforms (not to mention their business models) to allow the players to rescind ownership of their digital licence and transfer it to the buyer.

But the impact and potential legal problems could be much more significant than that. Take for example skins, personalised weapons or armour and other in-game purchases or loot acquired from loot boxes. Would those items expire or get transferred to the buyer along with the game? If so, would the seller be entitled to claim a higher price for the extra content in the game? And if they would, how would that affect the legal qualification of loot boxes in various European jurisdictions, when they would gain monetary value?

The gamers’ community on Reddit (r/Games) quickly identified other possible consequences of adopting that approach:

  • move to subscription based models;
  • no more free content updates;
  • shutting down servers of re-sellable games;
  • no more seasonal sales or discounts, instead – frequent and steady price reductions;
  • fewer offline games and general increase in gameplay time;
  • EU becoming a separate market (like China), possibly some games not being available in the EU.

The experts agree, however, that it is much too soon to count your chickens and start pricing your virtual shelf. There is going to be an appeal, which may very well overturn the ruling. The idea of exhaustion of the publisher’s rights in the digital context (which would prevent the publisher from interfering with second-hand dealing with digital content and, therefore, allow players to re-sell their digital games) has been widely discussed for years, including, in particular, in the case of Oracle v UsedSoft (2012), where it was stated that the exhaustion takes place in relation to software. However, as video games are – quite obviously– much more than just software, the interpretation of the UFC-Que Choisir v Valve case may vary, especially because, to an extent, different laws will be taken into account.

The actual, not hypothetical, impact of the French court ruling remains to be seen. Some argue that in the ever-evolving digital entertainment market, seeing constant changes in the content consumption models, the core question of digital exhaustion may soon become irrelevant. Maybe in a few years, maybe even before the case is finally resolved, the actual possession of a copy of a game will be obsolete, due to common use of streaming? The law hardly ever keeps up the pace of technology, so this is, indeed, very probable. We must wait and see for ourselves.