The Court of Justice in the European Union has set an astonishing precedent, ruling that we should all be allowed to resell any downloadable games we buy.

This could be a game-changer for the video game industry, having a major impact on services like the Apple App Store and Steam, as well as the big game publishers.

The ruling states:

The first sale in the EU of a copy of a computer program by the copyright holder or with his consent exhausts the right of distribution of that copy in the EU. A rightholder who has marketed a copy in the territory of a Member State of the EU thus loses the right to rely on his monopoly of exploitation in order to oppose the resale of that copy… The principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD) but also where he distributes them by means of downloads from his website.

As pointed out by John Walker at RockPaperShotgun, this ruling says that consumers have enough ownership to be able to resell these games, so there could be massive implications for other areas of consumers’ rights when downloading digital content, whether that is games, movies, music or other entertainment media.

Games companies have become notorious in recent years for attempting to remove consumers’ rights through End User Licence Agreements (EULA), preventing people from truly owning the content they download. Many downloadable video games are sold to users almost as long-term rentals, with publishers able to deny access to content with very little notice given. EULAs will often give the big companies the right to revoke your access to games you have paid for, without you being able to do anything about it. Steam even has the power to block access to all of your bought games for infringements on their service, such as being accused of cheating in a multiplayer game.

John Walker also points out that the most important part of the ruling is that if a license is sold indefinitely – i.e. not a license for a year, or similar – that the rightholder “exhausts his exclusive distribution right”.

Such a transaction involves a transfer of the right of ownership of the copy.

This could even prevent physical second-hand sales from being banned, something which many major video game publishers have been striving to achieve in recent years. This could drive more and more publishers to the digital marketplace if their relationship with retailers becomes more strained. Something which Kwalee CEO, David Darling, discusses in his recent blogpost which has sparked a lot of debate amongst gamers.

Of course, we’re unlikely to see second-hand downloadable games appearing on Steam or the App Store anytime soon, as the infrastructure doesn’t seem to be in a position to support this yet. It will be fascinating to see how companies like Valve and Apple react to this ruling in the coming months as there are many questions to be asked.

• What impact will this have on strict Digital Rights Management (DRM)?
• Will we be able to buy “used” iPhone and Android apps?
• Can consumers really “own” a free-to-play game or any content they purchase through micro-transactions?

At Kwalee, all of our games are sold through digital distribution, so we will be keeping a close eye on how this situation develops in the future.

 By Joe Barron – Community Evangelist