What’s the news?

• The video gaming industry has come a long way from Pong in 1972 to the release of Hogwarts Legacy in 2023. The recent surge has been a result of COVID-19, when the market expanded by about 26 percent between 2019 and 2021. However, this popular form of recreation has also imperiled cybersecurity.

Central idea

• The video gaming industry has experienced tremendous growth, transforming from a niche form of entertainment to a multi-billion-dollar global phenomenon. With over US$227 billion in revenue in 2022 and an expected 3.32 billion gamers by 2024, the industry’s popularity is unprecedented. However, this remarkable expansion has also led to a surge in cyberattacks, imperiling cybersecurity.

A Surge in Cyberattacks

• The gaming sector has become a prime target for cybercriminals, experiencing a staggering 167 percent increase in web application attacks in 2021 alone.
• In 2022, the industry witnessed an unprecedented wave of Distributed Denial of Service (DDoS) attacks, with gaming platforms accounting for approximately 37 percent of all such attacks.
• These cyber threats have put gamers at risk, with account takeovers, cheating mods, credit card theft, and fraud becoming disturbingly common.

The Pentagon Leak Case

• One of the most alarming cyber incidents occurred in April 2023, when a Discord server centered around the popular video game Minecraft, became the source of the worst Pentagon leak in years.
• Classified documents, some marked top Secret, were exposed, containing sensitive information about the ongoing Ukraine-Russia conflict, potential issues with Ukrainian ammunition supplies, and intelligence regarding the Russian military.
• Shockingly, the documents also hinted at US surveillance of its allies, specifically Israel and South Korea.

The virtual economy of video games

• The monetization of video games through in-game currencies and microtransactions has given rise to virtual economies.
• While developers offer players the ability to purchase virtual items using real money, the practice has come under scrutiny due to its perceived predatory nature, particularly concerning minors.
• Some countries have outright banned such practices, deeming them a form of online gambling. For example, Belgium banned the purchase of FIFA points, an in-game currency, in the famous football franchise FIFA.
• In February 2023, Austria followed suit, declaring FIFA packs illegal gambling.

The current policy framework around online gaming

• As of April 2023, the Ministry of Electronics and Information Technology (MeitY) in India has implemented new rules to regulate the online gaming industry.
• The current policy framework divides online games into two categories:

1. Online real money games: Games that involve real money and are registered with Self-Regulatory organizations (SROs). These games are subject to specific regulations and oversight.
2. Games that do not involve real money: Games that do not have any monetary transactions or betting and wagering involved.

The key provisions of the current policy framework

• Ban on online games involving betting and wagering: The new rules explicitly ban online games that have elements of betting and wagering. This move aims to curb illegal gambling activities within the gaming space.
• Obligations for online gaming intermediaries: The rules define the responsibilities and obligations of online gaming intermediaries. These intermediaries are required to follow certain norms, including Know Your Customer (KYC) norms, parental consent, and grievance redressal mechanisms. The objective is to enhance transparency and accountability in the sector.
• Establishment of Self-Regulatory Organizations (SROs): The policy requires the appointment of three SROs, consisting of industry representatives, educationists, and other experts. These SROs play a crucial role in determining which online games are permissible under the regulations.

Limitations of the current policy framework

• Narrow focus: The rules primarily target online games that involve real money transactions and betting. They do not comprehensively address other potential threats like microtransactions, loot boxes, and money laundering using virtual currencies.
• Loopholes: Many online games can bypass the regulations by offering rewards and prizes in virtual currency instead of real money. This allows certain gaming practices, resembling gambling, to continue unchecked.
• Ignoring loot boxes: The rules do not specifically address the issue of loot boxes, which have been controversial and deemed potential forms of gambling in many countries.
• Lack of collaboration: The current policy framework appears to be a unilateral effort by the Indian government without substantial consultation with relevant stakeholders, including industry experts and gamers.

Way Forward

• Strengthen the Regulatory Framework: Expand and make the current policy framework more comprehensive, including microtransactions and loot boxes, to tackle potential gambling-related issues.
• Collaborate with Industry Experts: Engage with gaming companies, cybersecurity experts, and gamers to gain insights into specific cybersecurity threats and devise effective regulations.
• Raise Awareness among Gamers: Educate users about cybersecurity threats, secure practices, and reporting mechanisms for suspicious activities.
• Invest in Robust cybersecurity. Prioritize cybersecurity by investing in encryption, secure authentication, and regular security audits.
• Develop Reporting Mechanisms: Implement efficient reporting systems within gaming platforms to address cyber threats promptly.
• International Cooperation: Collaborate globally to share intelligence and best practices in combating cybercrime.
• Ethical Game Design: Encourage ethical practices that prioritize player well-being over excessive monetization.

Conclusion

• Online gaming is one of the fastest-growing sectors in the global entertainment and media industry and provides a powerful new platform to unite people from all around the world. Consequently, we need to ensure that the industry continues to grow in a safe and responsible manner, and that bad actors looking to tarnish the experience for others are dealt with accordingly.

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