Legal risks and Countermeasures of free business model of online games

Beijing Guangsheng law firm Shanghai branch Liu Chunquan lawyer

Journey network listed, Shanda announced free, can be regarded as China network game industry free era officially began. Free is a kind of to sell virtual objects to obtain income mode of operation, so far, the giant network and are very successful, since the birth of this mode has been encountered the question. Because of the giant network and grand, the current main business of game of network of USA etc. are listed in overseas stock markets of the enterprise, USA law has strict requirements for information disclosure, the author thinks that the relevant enterprises should strengthen the legal research on the network game of profit pattern, avoid and prevent legal risks.

Understanding and the scope of the research at present, the author thinks that the free operation mode at present network game there are legal risks:

A profit model, the lack of a clear legal basis to support, there may be a disclosure risk of listed overseas is not complete legal risk.

       The virtual property is a "virtual property", and whether there should be legislation to protect the problem, there are many disputes in the Chinese law. The author is opposed to the legislation attitude[1]There are a lot of human, the main legislative protection. But there is one point should be clear, that is China is a written law country, virtual property in our country law is lack of a "law based on virtual property", therefore, in this sense, the term "virtual property" itself is not accurate. At present, only because we have become accustomed to, so stick. This paper is written after two months because of a strong professional no media published, but this time, the Shenzhen Nanshan District court a decision the QQ number and the coins are not included in the protection of the property law of our country listed in the legal documents[2]That analysis, to support the author's judicial practice.

      To provide a legal experts as a member of the NPC Law Committee's lecture information, in the "property law" legislative discussion, people have put forward the "virtual property" into the category of real right shall be protected. Later, this idea was not accepted. Fortunately did not adopt. Because the virtual object looks like game player by taking the time to play the game called, or bought with money, but, in fact, virtual objects produce, change, exchange, value, loss and related rules are dependent on the operation of enterprises set up, its physical form as electromagnetism record, reproduce marginal the cost is almost zero. The game once the enterprise bankruptcy off the server, all the game player of the virtual property instantly come to nothing. So the virtual property shall be protected by means of legislation, there are many difficulties, so I do not advocate the legislation, and proposes to establish similar international sports organizations that industry association, through industry self-regulation management way to solve related disputes, protection of the interests of the game player.

       Since the legislative basis, no virtual property Chinese statute law that, to virtual goods sales income source of free game profit model, the existence of legal risk, this is a problem worthy of study. The author thinks, on one hand, can be considered "law does not expressly prohibit is for", this is the national rule of law and improve the easier to accept the idea, that is to say, since the law does not prohibit, so how can I do it is legitimate; on the other hand, from the China reality at present, no specified in the statute law case, to obtain the protection of the law there are also practical difficulties: lack of legal basis. More serious is, if America someone to information disclosure legal risk indication is not sufficient grounds, filed suit, I'm afraid for these enterprises America listed there may exist significant litigation legal risk.

From another perspective, suppose that the law does not prohibit the based on insufficient grounds, even if not prohibited, due to lack of evidence, then, is a great possibility of national legislation and policy changes. Sell free source of profit and the virtual property is a major source of income for the current enterprises, once the changes in policies and laws, will affect the company earnings expectations, is likely to have a Wind sways grass. may affect the performance of the stock market.

Two, the financial statements not in loss reserving

        At present the network game in more than 90% of gross margin, so profits led to a large number of enterprises only see a profit, not considering a financial risk. The enterprise is lack of expected and prevent possible future risks. However, according to the experience, we know that in some human risk experienced field, enterprises will be in loss reserving, insurance etc., in accordance with the accounting standards but, in the network game new areas such as, risk exposure, the related accounting measure is not appropriate, may also need time to test.

Profitability and debt three, network game business is objective truth to be studied

In accordance with the current practice, network game enterprise income included in the enterprise business income. However, so far no any enterprise will game player rights included in the liabilities of a business. Enterprise published financial statements not shown to users of liabilities, then there exist some problems: the virtual property of the rules of the game, effective in how many years? There are no restrictions? Is it right? Enterprises can receive the money at any time after the termination of? If no restrictions, to achieve in the network game is not profitable balance, companies want to choose to shut down, but it will be on the Internet, constitutes a breach of contract, breach of legal risk in this Is it right? Predictable? It remains to be tested.

Four, the network game business risk and lack of prompt

Network game business has no operational risk? Of course it is there. In 2007 the perfect space-time correction clearing practices, have a great negative impact on the game player. Media criticism. The author has not studied the company America listing prospectus and disclosure documents, do not know the risk disclosure whether meet the local securities market regulations. But I worry that, once the disclosure is not complete, such as viruses, the rules of the game vulnerabilities in computer field, Internet is risk can be foreseen, the perfect time to take similar correction clear practice once in American legal environment, there may be risks serious legal wind.

Five, countermeasures and suggestions

1     Strengthen the information disclosure and risk warning.

       Because the network games is a product of the new economy, the risk of network game may be far more scope to discussed above, how to meet the risk USA etc. countries under the rule of disclosure requirements? The author thinks that no other better way, only by the enterprise to strengthen the research of relevant laws, in the aspects of the game rules design, R & D, profit channel design must be legal research and demonstration. And we must strengthen the legal risk, operation risk presentation and disclosure, avoid being caught a lawsuit.

2     The purchase of insurance

       The legal risk of litigation is not their own can control, taking into account the legal America in dealing with intellectual property litigation into huge, the author has proposed department coordination of domestic insurance enterprises launched legal risk insurance, so it can make use of social forces, improve the ability to cope with the overseas lawsuit, avoid the enterprise once the complaint, even when not being worn down, almost off a layer of skin complexion.

3     Financial provision for

        Although the legal and accounting standards is not clear, however, no one industry can avoid the risk, in the financial and make relevant treatment is forward-looking, considerations of game companies. This work was done early, days and months multiplying, can save a penny to do great things. Once encounter risks associated with it not to the enterprise caused great shock.

4     Active participation in legislation, industry self-regulation, industry have a common interest in this problem, should unite together to discuss solutions.

At present, the Foreign Company in China through legislation and national policy making activities very much. However, domestic enterprises, especially private enterprises, have little awareness in this respect, action is more rare. The majority of private enterprises should make use of the NPC deputies, CPPCC members and other resources, keep the public interest in mind researches in related industry,, put forward quality of motion, safeguarding national economic security, to play its due role in promoting industry development.

5             Take charge and free of charge mode coexist, casual games and MMPORG games coexisting, dispersing risk.

Although the network game is highly profitable, venture capital investment is also very concerned about, but, this kind of high input and high output model can be sustained, need time to test. Because the network game addiction inevitably youth and other social issues, national legislation and policies to regulate the possibility is very large. Of course, on the whole, the State encourages the game of own research and development and industrial development of the spirit will be continued to carry out.

In order to promote, suggested that the online games business in the development of new game products and design new profit models, should consider the appropriate risk. For example, products to avoid homogenization, avoid single profit model, change the over reliance on some products of the situation, to avoid in case of unpredictable events bring shock or impact to the enterprise.

Any new enterprise play network game domain Chinese enterprise in the world not to lose in the most developed market, it is gratifying. However, cohesion between the new economic phenomenon and the development of our present legal system, is the enterprises pay attention to. At the same time, I also hope that the majority of game companies should bear the social responsibility of corporate citizenship, create wealth at the same time, also do not forget to do some contribution to social harmony.

(the writer for the city of Beijing Shanghai Branch Sheng law firms lawyer, Shanghai Lvxie information network and E-commerce Law Research Committee, deputy director of professional committee of electronic commerce, China information economy society members)