Contractual framework conditions and models for live service games (games as a service)

The games industry is increasingly moving towards live service games or “Games as a Service” (GaaS). Unlike traditional video games, which are purchased once and used in their original form, GaaS models are constantly evolving games. Content, functions and even game mechanics can change or be expanded over time. This poses particular contractual challenges for providers – whether developer studios or publishers. Contracts and general terms and conditions (GTC) must be adapted to these particularities in order to avoid legal pitfalls and at the same time meet the expectations of players.

This blog post takes a detailed look at the contractual framework and typical models for live service games. We differentiate between subscription models and one-off purchases with additional content, look at the legal requirements for ongoing services (updates, support, new content) and discuss the relevance of SLA-like provisions such as availability guarantees and maintenance windows. We will also look at termination regulations – particularly in the case of continuing obligations – and the differences in contract design between consumers and entrepreneurs. Last but not least, the relevant statutory provisions – such as Sections 312 et seq. and Sections 327 et seq. BGB on consumer rights for digital content – are presented and explained. All of this is done in legal language and yet in a practical manner in order to provide founders and games developers with a comprehensible guide.

Business models for games as a service: subscription vs. one-off purchase

Live service games can be monetized using different business models. Essentially, two models have become established: the subscription model and the one-time purchase model with additional content. Both approaches have different legal characteristics and obligations, which we explain below.

Subscription models (ongoing memberships)

With the subscription model, the player pays a fee at regular intervals – such as monthly – to gain access to the game and its ongoing content. Examples of this are classic MMORPGs such as World of Warcraft, which are based on a monthly subscription, or modern services where seasonal memberships are purchased. Flat-rate offers such as Xbox Game Pass or PlayStation Plus can also be seen as subscriptions for a games library in a certain sense, although they usually include a large number of games.

Characteristics of the subscription model:

• It is legally a continuing obligation, as a continuous service (access to the game and regular updates/content) is provided in return for ongoing payment.

• As a rule, the user does not acquire an unlimited right to use the game, but only a time-limited right of use that is linked to ongoing payment. If the subscription ends, the right to continue using the game also expires (provided there is no free-to-play mode).

• Content and updates are often included in the subscription price. The provider implicitly undertakes to keep the game functional and accessible for the duration of the subscription and usually also to make it attractive with new content.

• For the provider, this means an ongoing contractual obligation to provide technical infrastructure (servers, etc.) and to make the contractually agreed game content continuously available.

In legal terms, such a subscription is now regarded by the law as the provision of a digital service over a period of time in the consumer relationship. Sections 327 et seq. BGB (implementation of the EU Digital Content and Services Directive), which have been in force since 2022, define such contracts as contracts for digital products. An online game that is made available for use over a certain period of time is considered a digital product, either in the form of digital content or a digital service. A subscription typically involves a digital service – namely the opportunity to play together online, to participate in a persistent virtual world and to access it.

Example: If a consumer takes out a 6-month subscription for an online game, the provider undertakes to grant access to the game for 6 months, including all planned updates and content during this period. In return, the user pays the subscription price (once in advance or monthly). Under the new law (Section 327 (1) BGB), this is a consumer contract for the provision of a digital product in return for payment of a price. The obligations of both parties run over time: the provider performs continuously, the customer pays continuously.

One-off purchase with additional content (DLCs, season passes, microtransactions)

The alternative basic model is a one-off purchase of the game, often combined with optional additional content that is subject to a charge. Here, the customer typically purchases a one-off license to use the basic version of the game. This business model in turn has various forms:

• Classic purchase + DLCs: The base game is purchased at a fixed price. Downloadable content (DLCs) – e.g. expansions, new levels, story packs – appear later and can be purchased separately. Each DLC purchase is a separate contract (usually another purchase contract for digital content). The player can therefore decide for themselves whether they want to invest additional money to unlock new content.

• Season Pass / Expansion Pass: This is a bundled offer: the user pays a certain amount in advance to acquire the right to a series of future DLCs or updates. A Season Pass often covers a season or a year and includes all expansions released during this period. In legal terms, the customer acquires several digital contents with a one-off contract, but these are delivered at different times. This is also a continuing obligation, but with a one-off payment – the provider owes various service components (the content) spread over a certain period of time without any further payments being made.

• Microtransactions and in-game purchases: In many modern games – especially free-to-play titles that are free in the basic version – small amounts of money are spent on virtual goods, cosmetic items, loot boxes or gameplay benefits. Each such transaction is in itself a purchase contract for digital content (e.g. a package of virtual currency or a cosmetic skin). Although the game runs continuously as a platform, there is no subscription; the player pays as required. In legal terms, this results in many individual contracts for digital products, not one large permanent contract. Nevertheless, the terms of use of the game must provide a framework for these microtransactions (e.g. rules for redeeming virtual currency, availability of purchased items, etc.).

Characteristics of the one-off purchase model:

• The initial purchase of the game is a purchase agreement for digital content (if distributed digitally). The buyer receives a permanent right to use the game in the version that exists at the time of purchase – in the form of a license, usually unlimited in time. However, use may be effectively limited to the lifetime of the servers if it is an online-only game.

• Additional content such as DLCs or items extend the right of use. Each purchase of DLC is in turn a separate contract (contract for digital content).

• With a Season Pass or similar models, a contract is created with partial services over time: here, the provider must deliver content over a defined period of time, similar to a subscription. The difference to a subscription is that there is no ongoing payment, but payment is made in advance. Nevertheless, the customer is entitled to subsequent delivery of future content as soon as it has been completed.

• With pure one-time purchase models, the provider is under no obligation to provide new content unless it is sold separately or promised. Although many single-player games receive free updates or patches, new content packages are only delivered if the customer purchases them or has previously acquired them via a season pass.

From a legal perspective, the following has also applied here since 2022: If the customer is a consumer, the special rules of Sections 327 et seq. BGB for digital products apply. Once a game or DLC has been purchased, it is subject to the regulations for digital content. It is worth noting that the legislator has introduced an update obligation for digital products (more on this later). Even a game that has been sold once must therefore be provided with any necessary updates in order to ensure conformity with the contract.

Comparison and legal classification of the models

The choice of business model has a significant influence on the legal classification of the contractual relationship:

• Continuing obligation vs. individual service: A subscription or season pass establishes a long-term service relationship. This entails, among other things, termination protection regulations and special warranty provisions. A one-off purchase with optional DLCs, on the other hand, consists of individual, self-contained service relationships.

• Types of contract: In the past, a one-off purchase would have been clearly qualified as a purchase contract (purchase of goods analogous to digital goods) and a subscription more as a service contract (ongoing service access to the game) or a rental contract (provision of a game for a limited period). Since the introduction of digital product law, these categories have become somewhat blurred in consumer law, as a uniform framework applies to all digital content/services. Nevertheless, these types are helpful for understanding the obligations: in the case of a purchase, the focus is on the one-off transfer of a usage option, whereas in the case of a subscription, the focus is on the continued granting of usage.

• License rights: In both models, the customer generally does not acquire title to an item, but rather a license to use the software (the game). In the case of a one-off purchase, this is usually a permanent license; in the case of a subscription, it is a temporary license. These license conditions are defined in the EULA/AGB. Here it must be clearly regulated which rights of use the player receives and which not (e.g. no right to edit the game, resell it, etc.).

• Additional purchases in the subscription model: Even subscriptions do not exclude microtransaction-type purchases – many MMOs also have item stores. In legal terms, a continuing obligation (the subscription) and individual purchase contracts (the microtransactions) run in parallel. The terms and conditions should make it clear that access to the game depends on the subscription, whereas purchased items can only be used in the active subscription and do not give rise to a claim for compensation in the event of termination (if the subscription ends, the player loses access to purchased virtual goods, which must be addressed accordingly in the contractual terms and conditions).

Developers and publishers should decide at an early stage which model (or combination of models) should be pursued, as this will serve as a framework for all further contractual arrangements. Both approaches must be carefully implemented contractually, particularly in light of current consumer protection laws.

Ongoing performance obligations: Updates, support and new content

A central feature of live service games is the ongoing support and further development of the game. Players expect a dynamic experience with regular improvements, bug fixes and new content. This results in legal obligations for the provider that go beyond the mere initial sale. In this section, we look at which performance obligations must be fulfilled on an ongoing basis and which legal requirements exist in this regard.

Legal obligation to update (§ 327f BGB)

Since January 1, 2022, German law expressly requires digital products to be updated. This change is particularly important for games as a service. § Section 327f BGB stipulates that the supplier (entrepreneur) must ensure that the consumer is provided with the updates required to maintain the contractual conformity of the digital product during the relevant period. This includes, in particular, security updates.

What does this mean in concrete terms? A digital game must be maintained for a certain period of time in such a way that it complies with the features agreed at the time the contract was concluded and has no defects that impair its use. Contractual conformity includes subjective requirements (everything that was individually agreed, e.g. certain features) and objective requirements (usual standard and expectations of such a game). This means that if a security-critical error or a serious bug occurs, the provider is legally obliged to provide an update to fix it. It must also provide compatibility updates if, for example, a new operating system update by the player within the relevant period would make the game unusable – at least to the extent that this can reasonably be expected of the game.

The “relevant period” for the update obligation is not fixed by law, but depends on the circumstances: In the case of a permanent contract (e.g. subscription), it is the entire contract term. In the case of a one-off purchase of a digital product without a limited period of use, the legitimate expectation of the consumer plays a role. Section 327f (1) sentence 3 BGB states that, unless otherwise contractually agreed, the trader must provide updates for the period that the consumer can expect based on the type and nature of the digital product and taking into account the circumstances. In many cases, one can assume at least the statutory warranty period (2 years). In practice, this means that if someone has purchased an online game, it is expected that relevant updates (including patches and security fixes) will be provided for at least a typical period – e.g. two years from release – even if there is no subscription. This period is often determined by the usual product lifespan or by information provided by the manufacturer (e.g. “we will support the game at least until…”).

Important: The obligation to update does not include the obligation to constantly provide new content or features (“upgrades”) that go beyond the original state. It serves to maintain the contractually owed condition. For example, a provider must close security gaps and fix game balance problems, but does not have to add new levels free of charge if this was not part of the service commitment. A paid DLC with new content does not fall under the legal obligation to update – this would be a voluntary additional offer. However, the boundary can be blurred if new content is necessary to fix bugs or maintain playability (for example, if a certain game mode is removed and the contractually agreed multiplayer function would be practically useless without new content).

It should also be noted that the provider must inform the consumer that updates are available. In practice, this is usually done automatically via the game launcher or the platform (e.g. Steam update notifications). For his part, the consumer is obliged to install the updates provided, as otherwise he may lose his warranty rights with regard to any resulting defects (Section 327f (2) BGB). This means that if the player ignores an important update offered and problems arise as a result, he cannot hold the provider responsible.

Example: A developer sells an online action game as a one-off purchase. After eight months, a serious security vulnerability becomes known that could allow attackers to take over accounts. Although the game is not a subscription, the developer must provide a patch (update) to close this gap and inform the players accordingly. Failure to do so constitutes a legal defect or security flaw that may trigger warranty claims. The developer must also ensure that, for example, server-side adjustments are made within the usual period of use if the game would otherwise become unplayable.

Ongoing content support and enhancements

Beyond the minimum legal requirements, users of live service games regularly expect new content, events and expansions. This raises the question: To what extent is a provider contractually obliged to provide such content updates?

As a general rule, there is no obligation to provide new content without an express agreement. So if a game is sold “as is” or provided as a subscription, the provider primarily owes the maintenance of the agreed functions, but not constant expansions. However, many live service games advertise with statements such as “constant new adventures”, “new items every month” or publish roadmaps with planned expansions. Such announcements can become relevant under contract law: They shape consumer expectations and can be considered a quality agreement in individual cases. For example, if a season pass promises “four expansions within a year”, this becomes part of the contractual obligation to perform.

With subscription models, it is often implicit that something is offered continuously. Although not all content may be guaranteed in advance, basic further development is part of the nature of the contract with ongoing fees. A complete standstill in development could be seen as a bad fulfillment of the contract if the subscription was advertised with ongoing development. In extreme cases – for example, if a provider continues to make the game available for a fee but no longer provides any maintenance or new content, although this was expected – the user could be entitled to extraordinary termination or a reduction in payment, depending on the circumstances. Providers should therefore provide clarity here:

• Transparency in communication: It is advisable not to make exaggerated promises that cannot be kept. Content that is firmly planned can be named, but always with reservations in case there are changes to the development plan.

• Contractual reservations: The terms and conditions or terms of use may state that no specific number or frequency of content updates is owed and that further development is at the discretion of the provider. Nevertheless, a provider offering a subscription should be aware that complete passivity is commercially and legally risky.

• Season Pass as a contract for future services: Here you have clear promises and should then also fulfill them. If a promised extension does not materialize, there is a breach of performance obligation (non-delivery of a partial service owed), which can lead to a claim for supplementary performance, possibly compensation or (partial) repayment. Contracts for future digital content should therefore always be planned realistically – for example with clauses for delays (“release may be postponed for development reasons”) and how to deal with failures (“if an announced expansion is not released, the customer will receive a replacement, e.g. another DLC or a pro rata refund”).

To summarize: Although ongoing content is essential for business in GaaS models, it is only legally binding if it has become part of the contract. The legal obligation to update only requires the maintenance of the target status and security; everything else is a matter of contract design and product strategy.

Technical support and customer service

In addition to software updates and new game content, users often also expect support services: Help with technical problems, account support, moderation in the event of conflicts between players, etc. Legally, the question arises as to the extent to which a provider owes such support.

The consumer contract for digital products does not explicitly stipulate that support must be provided. However, a lack of support can result in a defective product if a problem prevents use and the provider does not help to solve it. Example: A bug deletes inventory items; the provider patches them at some point, but refuses to restore lost items or compensate the customer. In this case, the user could argue that the owed usage option was not guaranteed.

It is customary – and advisable from a business perspective – to make certain support commitments in the terms of use, but also to set limits: For example, that support is only offered via certain channels (ticket system, email), not necessarily 24/7 and with no guarantee of a specific response time. This allows you to retain control over the effort and avoid excessive expectations.

It is important that providers define clear processes for dealing with support-relevant cases, for example:

• Account problems: e.g. recovery of a hacked account – the update obligation/security obligation also applies here, e.g. if many accounts are hacked, security updates must follow. The contract should stipulate that the user is jointly responsible for the security of their access data, but that the provider will take certain measures if unauthorized access is suspected (blocking, notifying the user).

• Refunds/in-game purchases problems: Users could complain that a purchase has not been credited. A support process must be in place here. In terms of contract law, the GTC should state how such errors are corrected (crediting of the item or refund) and that the user must report such cases promptly.

• Player behavior and moderation: In online games, there is also the ongoing maintenance of a community. Although this is more a question of the terms of use (keyword: community guidelines, chat moderation), it is part of the ongoing service. If a game promises “moderation” or a non-violent gaming experience, for example, the provider would have to intervene appropriately in the event of violations. However, there is usually no absolute obligation to moderate, only the right to take action in the event of reports. More on this later under Termination (topic: Blocking in the event of violations).

To summarize: Adequate technical support is de facto standard and expected for live service games. Legally, however, the scope can be freely defined as long as the use of the game remains guaranteed. Clear regulations in the terms and conditions can define which support services are included and in what form. In any case, nowhere in the contract should the impression be created that the user is left completely alone – depending on the case, this could be considered a breach of secondary obligations. In addition, reliable support contributes significantly to customer satisfaction and therefore to the success of the service.

Service level and availability: SLA-like agreements

Live service games typically run on central servers or in the cloud. The availability of these services is crucial for players – a server outage or lengthy maintenance work can lead to frustration and, in the worst case, legal disputes (for example, if paying customers are unable to play for months). In traditional B2B contracts for IT services, detailed service level agreements (SLAs) that regulate availability quotas, response times and compensation are common. In the B2C sector (contracts with consumers), such formal SLAs are rarely found in end-user T&Cs, but some SLA elements should still be taken into account.

Availability guarantees and uptime commitments

With online games, it is in the nature of things that 100% availability cannot be guaranteed. Technical maintenance, updates or unforeseen server problems inevitably lead to downtimes. From a legal perspective, the question arises: does the provider have to guarantee a certain level of availability? And what happens if this is not met?

Contractually, it makes sense to clearly regulate availability. Many general terms and conditions for online games contain a clause with the following content: “The provider endeavors to ensure high server availability, but does not guarantee continuous availability. In particular, there may be interruptions due to maintenance work, updates or force majeure.” Such a clause should prevent every default from automatically being considered a breach of contract. Important: In the B2C sector, such a clause must be appropriate – a complete exclusion of liability for outages could be problematic if it undermines the legitimate expectations of the players. But most players do not realistically expect 24/7 uptime without any interruption as long as outages remain within normal limits.

No express guarantee: If the provider has not expressly given a guarantee of e.g. “99% uptime”, availability is measured in case of doubt according to the objective requirements to be placed on such a service. The law (Section 327e BGB) requires that a digital product meets the objective requirements, which includes, among other things, that it has the same durability and performance characteristics as usual. In the case of an online game, it can be objectively expected that it will be available for the majority of the time on a monthly average. A permanently unstable service (e.g. daily outages of several hours) would probably be considered defective, even without special clauses.

It is therefore in the provider’s interest to give at least an indicative assurance of availability in order to set a benchmark, but to provide this with sufficient exceptions. Example: “We are aiming for an availability of 98% on a monthly average. This does not include announced maintenance windows. Otherwise, there is no claim to constant availability.” Such a passage creates transparency and expectation management.

Maintenance windows and updates

Regular maintenance periods are common for online games, e.g. to install server updates, maintain databases or install new patches. From a legal perspective, maintenance windows should be reserved in the terms of use.

Typically, there is a sentence such as: “The provider is entitled to interrupt the service at reasonable intervals for maintenance purposes. As a rule, maintenance work is carried out during periods of low usage and, where possible, announced in advance.” This is important to clarify that such interruptions are in accordance with the contract and not a defect.

In practice, many game providers announce major updates or planned downtimes via their platform, by email or on the official website/forums. Although prior notification is not legally mandatory, it is good practice and can be seen as a secondary obligation arising from the contractual relationship (keyword: duty of consideration). Players should have the opportunity to prepare for this.

Emergency maintenance (e.g. hotfixes) will naturally not be able to be announced well in advance. The contract should leave some leeway here, e.g. that an immediate interruption can take place in urgent cases in order to ensure functionality or security. As this is ultimately also in the interests of the users (security, rapid troubleshooting), this is generally unproblematic.

A special feature of GaaS is that updates themselves can be part of the contract – they are included in the subscription, while individual purchases include at least the mandatory updates. The provider is therefore not only entitled, but sometimes obliged, to interrupt the service in order to install updates. The user must accept this, but should be informed.

Dealing with malfunctions and failures

Despite all caution, unforeseen disruptions can occur: Server crashes, DDos attacks, software errors that make the game unplayable, etc. What is legally relevant here is how such malfunctions are classified and what rights the user has.

In principle, the following applies: If the user cannot use the game at times because the servers are down or other problems occur on the provider’s side, there is a breach of performance obligation – the provider does not provide the service owed (access to the game). However, the law will grant the provider certain tolerances, especially if the provider is not at fault. A short-term downtime due to technical problems is likely to be considered an insignificant defect or temporary impossibility without liability for damages, provided it is rectified within a reasonable period of time.

However, if a significant part of the playing time is lost – for example, an online game is unavailable for weeks – the user may be able to assert warranty rights. In the case of a subscription, the user could, for example, reduce the subscription payment (reduction of the fee for the period of downtime) or, in the event of recurrence, terminate the contract without notice. In the case of a one-off purchase that relies on online functionality, you could even consider withdrawing from the purchase if the game does not work as promised on a permanent basis. The general rules apply here: First of all, the right to subsequent performance (i.e. repair of the servers, which the provider will of course try to do anyway), and if this is not successful within a reasonable period of time, further rights such as withdrawal or reduction.

Contract drafting: To deal with such cases, GTCs should address the following points:

• Reference to force majeure: Many GTCs contain a clause stating that the provider is not liable for failures caused by force majeure or circumstances beyond its control (e.g. natural disasters, external attacks).

• No liability for loss of data: With online games, there is always a risk that progress or items may be lost in the event of server problems. A clause can stipulate that the provider makes every effort to ensure data security, but assumes no liability for lost game saves, unless there is intent or gross negligence. (Caution: In the case of consumers, liability limitations must be formulated carefully – more on this in the section on liability and general terms and conditions for consumers).

• Compensation as a gesture of goodwill: Instead of contractually promising fixed compensation (which would be risky because any minor outage could lead to claims), many providers handle this in an accommodating manner, e.g. by crediting subscribers with part of the month free of charge in the event of longer outages or distributing an in-game bonus as compensation. This strengthens customer loyalty without any legal obligation to do so. In terms of contract law, it is better not to establish a rigid compensation rule, as this can quickly lead to a dispute as to when exactly a claim arises.

Service level in the B2B context

Although the focus of this article is on contracts with end users, it should be mentioned that service level agreements in the true sense are primarily relevant in B2B contracts (between companies). This is conceivable, for example, if a development studio outsources the server infrastructure to a service provider – in this case, an availability of 99.5%, for example, is agreed internally in the contract with the server hoster. Or if a company licenses a game for internal purposes (e.g. gamification software), specific performance parameters could be defined in the contract.

For end customers, a detailed SLA breakdown (with percentages, ticket priorities, penalties for non-compliance) would be overwhelming and is also legally unusual in mass business. Nevertheless, partial aspects of an SLA, as described above, can be usefully incorporated into the GTC in order to create clarity and make your own obligations manageable.

Term and termination of continuing obligations

A key issue with games as a service is the term of the contract and the conditions under which both parties can terminate the contract. Subscriptions in particular (typical continuing obligations) are subject to numerous consumer protection rules that have been tightened in recent years. However, other contracts (e.g. season passes or even the continued operation of an online game once purchased) also raise the question of termination rights and contract termination. This section explains the most important aspects of notice periods, forms of termination, extraordinary termination and special new requirements such as the termination button. We also examine the situation if the provider itself discontinues the service or excludes players from the game for good cause.

Ordinary termination and contract terms

Legislation now sets clear limits for subscription contracts with consumers. Since March 1, 2022, the Fair Consumer Contracts Act has been in force, which regulates automatic contract renewal and notice periods in particular. Game subscriptions must also meet these requirements:

• A minimum contract term of up to 24 months is permitted (Section 309 No. 9 BGB). However, many games rely on more flexible models (can be terminated monthly) in order not to deter customers. However, it is legally permissible to offer a discounted annual subscription, for example.

• After the initial term has expired, a contract may not simply be tacitly renewed for the same term without the option to terminate. It used to be common practice, e.g. 1 year + automatic renewal for a further year if no notice of termination was given 3 months in advance. This is no longer permitted for consumers. Instead, the customer must be granted the right to terminate the contract at any time after the minimum term with a maximum of one month’s notice. In practice, this means that after a term of 12 months, for example, the contract is converted into an open-ended contractual relationship that the customer can terminate at any time with one month’s notice (Section 309 No. 9 BGB new version).

• Automatic renewal is only permitted in the form of an extension for an indefinite period, not as a rigid fixed renewal period. And the notice period may not exceed 1 month (both for termination at the end of the initial term and thereafter).

Example: A game offers a 12-month subscription. In the past, the terms and conditions would have stated: “Renewed for a further 12 months if not canceled 3 months before expiry.” Under the new law, it must read: “Renewed indefinitely after the minimum term has expired. After the 12 months have expired, the contract can be terminated by the customer at any time with one month’s notice.” As a rule, the provider itself will also have to observe a notice period if it wishes to terminate the contract properly (which rarely happens with current subscriptions – the provider is more likely to terminate the contract if it discontinues the service or for good cause).

In the case of monthly subscriptions (without a fixed term), there is in fact an open-ended contract anyway, which must be terminable at any time for the next payment period – which is also provided for in most general terms and conditions (e.g. termination at the end of the current month). Here, the legal requirements are usually fulfilled automatically as long as no impermissible termination hurdles are built in.

It is important to implement these provisions properly in the contract. A clause that does not grant the consumer a sufficient right of termination after the initial term would be invalid. In case of doubt, the law would then apply directly, which would mean that the customer can terminate the contract at any time – which must be granted anyway.

Cancellation button in online sales (Section 312k BGB)

In online business with consumers, the so-called cancel button has been mandatory since July 2022. This applies to all ongoing contracts that were concluded online and where the trader is obliged to provide a permanent service in return for payment – i.e. precisely the scenario of game subscriptions that are concluded via a website or platform.

What is the cancellation button?
In accordance with Section 312k of the German Civil Code (BGB), a trader offering such a contract online must provide a button on their website that the consumer can use to cancel the contract. The labeling should be clear and unambiguous, e.g. “Cancel contract now”. If the customer clicks on this button, they must be taken to a confirmation page where they can declare the termination (usually using a form with details such as name, email and contract number, if applicable). After sending the form, the provider must immediately confirm the termination to the customer electronically (e.g. by e-mail).

For game providers, this means that anyone who sells subscriptions on their own website cannot avoid implementing a cancel button. If they fail to do so, they risk warnings from competitors or consumer protection associations. The first court decisions (e.g. Cologne Regional Court) have already made it clear that infringements have serious consequences.

Exceptions: The cancel button is not required, for example, for contracts that can only be canceled in writing anyway (rarely relevant in the games sector) or for financial services. A games subscription does not fall under such exceptions. If the subscription is processed via an app store or a platform that itself provides the cancellation function (e.g. Apple App Store subscriptions can be canceled in the Apple account), the individual provider is not obliged to also offer the button on its own homepage – but it is obliged to do so on its own website where the subscription was concluded. It is advisable to clearly indicate in the FAQ or help pages how to cancel and to place the button in a clearly visible location (legally “easily accessible”).

Extraordinary termination (good cause)

In addition to ordinary termination, both the user and the provider always have the right to extraordinary termination for good cause. This is enshrined in the German Civil Code (Section 314 BGB for continuing obligations in general) and can also be specified in the contract.

Good cause exists if the terminating party cannot reasonably be expected to adhere to the contract until its regular end. In the context of online games, typical important reasons are

• For the player (customer):

  • Prolonged downtime or significant deterioration of the game without improvement. For example, if the game cannot be used for weeks or the provider discontinues essential functions that were part of the promised scope of services (e.g. discontinuation of the multiplayer mode, which was the core of the game).

  • Serious breaches of contract by the provider, such as data protection scandals that destroy trust, or sudden unilateral changes to the GTC to the detriment of the user without a legal basis. (Note: Unilateral changes to digital products are regulated in Section 327r BGB – more on this later).

• For the provider:

  • Violation of the terms of use by the player, especially in the case of significant or repeated violations. The best-known example is cheating (interference in the game that violates fair play rules) or toxic behavior (serious insults, hate speech despite warnings). In such cases, the provider effectively terminates the user contract and blocks the account.

  • Default of payment for subscriptions: If the user does not pay despite a reminder, the provider can terminate the contract for cause or block access. In most cases, the contract will stipulate that the account is temporarily frozen in the event of late payment and can be terminated after a period of notice.

The GTC should list the most important reasons for termination by way of example, at least on the provider’s side, as the provider will typically initiate extraordinary termination (players can always terminate or let their subscription expire if necessary, they rarely need to do so). A common clause is: “The provider is entitled to terminate the user relationship without notice for good cause. Good cause shall be deemed to exist in particular if the user breaches material contractual obligations or rules of conduct – such as… [list: unauthorized hacks, circumvention of copy protection, multiple insults to others, etc.]. – and does not cease despite a warning (or is so serious that a warning is unnecessary).”

In the event of a justified extraordinary termination by the provider (e.g. permanent ban of a cheater), the user is not entitled to a refund of any fees already paid, unless otherwise contractually agreed. Most general terms and conditions stipulate that in this case any remaining credit expires and the user also loses their account, including any virtual goods. However, these harsh consequences must be proportionate to the severity of the violation – which is why a prior warning is often required, except in serious cases.

Conversely, if the user terminates the contract for cause because the provider does not provide the service, they can also demand compensation or reimbursement (e.g. pro rata payment back for the remaining term), depending on the case. This arises from the general law on the disruption of services: If the customer justifiably terminates the contract due to poor performance, he is treated as if he had terminated the contract at the time of termination – no further payment is due, amounts paid in advance for the future would have to be refunded, and possibly compensation for damages if he has suffered damage as a result of the defect (e.g. costs to procure a replacement game).

Contract amendments and discontinuation of the service

One particular aspect of live service games is the possibility that the provider may change the game concept or cease operations altogether. There can be many reasons for this: economic failure, successor games, technical changes or strategic realignment. From the user’s point of view, this is dramatic – you may have invested money (purchase price, subscription, microtransactions) and are now no longer able to use the game.

Unilateral changes to the current service:
The new law in Section 327r of the German Civil Code (BGB) contains provisions on when and how a provider may make changes to digital products. The following applies to a contract for permanent provision (i.e. subscriptions, season pass, etc.):

• The contract must provide that changes are possible at all and there must be a valid reason for this (Section 327r (1) No. 1 BGB). Valid reasons can be, for example: technical necessities, adaptation to a changed environment (such as new legal requirements, safety-relevant changes) or – to a certain extent – further development to improve the product.

• The change must not result in additional costs for the consumer (Section 327r (1) No. 2). This means that you cannot suddenly charge money for content that was previously free (without the customer’s consent).

• The consumer must be informed clearly and comprehensibly (Section 327r (1) No. 3) about the change.

Particularly critical are changes that have a negative impact on the user, be it on the accessibility or usability of the game (Section 327r (2) and (3) BGB). Example: The provider removes a popular game mode or reduces the graphics settings so that the game is significantly less attractive. In such cases, the consumer has a special right of termination: they can terminate the contract free of charge within 30 days of the change (Section 327r (3) BGB), provided the impairment is not insignificant. This right can only be excluded in a few cases, for example if the change is made due to a legal obligation (e.g. legal prohibition of certain content – Section 327r (4)).

In practice, this means: If you reserve the right to make substantial changes to the game (which many online games do, e.g. major gameplay revisions), you should
a) clearly formulate this reservation in the contract (including reasons such as “improvement of the game experience, adaptation to the number of players, balancing…”),
b) announce changes in good time,
c) grant customers the special right of termination or point this out to them.

Although it is rare for customers to actually cancel in order to escape an unpopular change – they have often already paid – this option must be legally available. In the case of a subscription, they could then cancel at the time of the change, for example, and claim back any overpayments if they had paid in advance.

Discontinuation of the game (server shutdown):
There comes a point when an online game is discontinued. Legally, this is tricky, especially with free-to-play or paid games without a subscription, as players may have invested money in in-game purchases that become worthless overnight. Contractually, you should reserve the right to discontinue the service, but with reasonable advance notice. No special law applies here apart from the general fiduciary duties in the contractual relationship and the termination rules. In the case of subscriptions, the provider can of course terminate all contracts with due notice. The situation is more difficult for players who have purchased permanent access (e.g. lifetime access or single player with compulsory online access) – they do not have a recurring contract, but a permanent right of use.

Some general terms and conditions of online games contain clauses such as: “We reserve the right to discontinue the online operation of the game at our own discretion. We will inform you of this at least X weeks/months in advance. Any subscriptions still running at this time will be refunded on a pro rata basis from the date of discontinuation.” Such clauses are permissible as long as they comply with reasonable deadlines. The consumer must be given the opportunity, for example, to use up their credit balance or simply to mentally adjust.

In the case of online-only games (without a subscription), it is legally disputed whether a deactivation without replacement shortly after purchase constitutes a defect. With the introduction of the Digital Content Directive, it could be argued that the product then no longer corresponds to the objective quality (because access is no longer possible) and therefore constitutes a warranty case. At least within the first 12-24 months after purchase, switching off without replacement is likely to be problematic. Therefore, a provider who sells a game that is completely server-dependent should clearly state in the terms and conditions that unlimited availability is not guaranteed. Nevertheless, the provider must comply with the update obligation and maintain the service for a reasonable period of time so that there is no defect of title. Ultimately, however, it can be assumed that the service can be discontinued after a few years – ideally by contractually limiting the service or at least through transparent communication.

Right of withdrawal vs. termination

A brief digression on the right of withdrawal, as it is often confused with termination: The right of withdrawal according to Sections 312g, 355 BGB gives consumers the opportunity to cancel a contract concluded online within 14 days without giving reasons. This right also applies to digital content and services, such as the purchase of a game via download or the conclusion of a subscription , unless the consumer has effectively waived this right.

There are special features for digital products:

• Digital content (download games, DLCs): Here, the right of withdrawal expires if the trader has started to execute the contract after the consumer has expressly agreed that the execution will start immediately and has confirmed that he loses his right of withdrawal (Section 356 (5) BGB). In practice, this means that when purchasing a download, the customer must, for example, check the box “I expressly request the immediate provision of the content and know that I thereby lose my 14-day right of withdrawal” before downloading. If this is not done, the customer could theoretically download the game and cancel it within 14 days – which would be open to abuse, as digital goods cannot be “returned” in the traditional sense.

• Digital services (online subscription): The situation here is similar, but not identical: In the case of services, the right of withdrawal expires if the service has been provided in full and the consumer’s consent and knowledge of the loss of the right of withdrawal has been obtained beforehand (Section 356 (4) BGB). However, a subscription is not yet “fully provided” within 14 days of the conclusion of the contract. Theoretically, a consumer could therefore take out a subscription, use it for 10 days and cancel it. However, they would then have to pay compensation for the service already provided if they had requested that it start immediately (Section 357 (8) BGB). In practice, many providers play it safe and treat subscriptions similarly to digital content with regard to revocation: in other words, they obtain consent during the ordering process for the service to be activated immediately and the customer loses their right of revocation. From a legal point of view, you are moving into special territory, as a subscription is not provided in full immediately. It would be more consumer-friendly not to exclude the right of withdrawal, but to charge the customer pro rata in the event of withdrawal – but this is organizationally complex. Many platforms (Steam, Playstation Store, etc.) have their own refund policies, which are usually more accommodating or at least regulated (e.g. Steam: return within 14 days for <2 hours of playtime, regardless of the right of withdrawal, which you had to waive when purchasing a download).

For the provider, this means that correct information about the right of withdrawal must be provided in sales (website or launcher) and, if necessary, the waiver must be obtained in order to ensure legal certainty. However, the right of withdrawal is a matter of the conclusion of the contract, not the ongoing termination. After the 14 days have expired, only the normal contract termination rules apply.

Conclusion on this point: Termination is the termination of an ongoing contract (for the future), while revocation enables the rescission of a contract shortly after its conclusion. Both must be observed. When drafting terms of use, our law firm always ensures that the cancellation policy is correctly integrated and – if desired – that the waiver of the right of cancellation is properly implemented if the service is provided immediately.

Differences in contract design: consumer vs. entrepreneur

When planning the contractual documents – be it general terms and conditions, license agreements or terms of use – it is essential to differentiate whether the offer is aimed at consumers (Section 13 BGB) or entrepreneurs (Section 14 BGB), or possibly both. Consumers enjoy far-reaching legal protection, which may not be deviated from to their disadvantage in contracts. In B2B business (business-to-business), there is much more freedom in the drafting of contracts. Here we summarize the most important differences and obligations when drafting contracts with consumers on the one hand and entrepreneurs on the other.

Contractual clauses and GTC control

The so-called AGB control according to §§ 305 ff. BGB (German Civil Code) applies in a strict form, especially to consumer contracts. Many clauses that would still be permissible in B2B contracts are invalid for consumers. Examples:

• Limitations of liability: Liability towards consumers for bodily injury or gross negligence and intent may not be excluded or limited. Liability must also be accepted for slight negligence, at least in the event of a breach of material obligations. In the B2B sector, liability can be limited much more comprehensively (e.g. exclusion of liability for indirect damage, for slight negligence in general, capping to a certain amount, etc.), although extremely far-reaching exclusions could also fail under certain circumstances due to Section 307 BGB (general clause), but courts are much more reluctant to invalidate clauses in the case of two entrepreneurs.

• Warranty exclusion: In the case of consumer goods purchases (or the provision of digital products to consumers), it is prohibited to exclude or shorten the statutory warranty rights. The warranty period for consumers for digital products is generally 2 years (in the case of permanent provision: for the entire provision period, see Section 327j BGB). Any attempt to shorten this period or exclude liability for defects in the GTC is invalid. In B2B business, on the other hand, the warranty period can be contractually shortened to 1 year or certain types of defects can be excluded from liability. For example, the following is often agreed in license agreements between entrepreneurs: “The software is provided as is, warranty for material defects is excluded, unless the defect was fraudulently concealed.” Such clauses are generally permissible between entrepreneurs, but unthinkable in relation to consumers.

• Notice periods and contract term: As explained above, rigid renewal clauses and long commitment periods are only considered invalid in the consumer sector in accordance with Section 309 BGB. In B2B contracts, for example, a 36-month contract with an automatic 12-month extension and 3-month notice period could be agreed without Section 309 BGB directly applying. However, there is a residual risk that, in extreme cases, courts may classify such clauses as unreasonably disadvantageous to companies (Section 307 BGB), but the hurdles for this are high. In general, the B2B sector has more freedom to create planning security through longer terms.

• Fictitious consent and communication: Some GTC clauses attempt to force or assume behavior from the user (e.g. “If the user remains silent in response to a change, this shall be deemed consent”). Such fictitious clauses are often inadmissible vis-à-vis consumers, unless the law permits it (example: Section 308 No. 5 BGB prohibits fictitious declarations by the contractual partner). In business-to-business transactions, such constructions are more likely to be possible if the other party accepts them – here the law places greater reliance on the contracting parties’ own responsibility.

Tip: If your game could be used by both consumers and entrepreneurs (e.g. an educational game that is licensed to both private customers and schools/learning institutions), you should consider creating separate contractual terms for both groups or clearly differentiating between them within a set of GTC. For example, by using clauses such as:“The following provisions apply additionally/exceptively to consumers…; the following provisions apply instead to entrepreneurs…“. In this way, for example, a shortening of the warranty can only be ordered for entrepreneurs, while consumers receive the statutory regulation.

Information obligations and transparency

There are a large number of statutory information obligations when dealing with consumers. Some important ones are

• Imprint obligation: A commercial online offer (website, app) must have an imprint with the mandatory information (name, address, contact, authorized representative, registration number, etc.), Section 5 TMG. This would also make sense for business customers, but is not legally mandatory as it is a consumer protection standard (and general business transactions). In practice, of course, every reputable company has an imprint, regardless of whether it is B2C or B2B.

• Provider identification in the contract: In the case of consumer contracts, the customer must be clearly informed of the identity of the contractual partner, contact options, etc. before the contract is concluded (Section 312d BGB in conjunction with Art. 246a EGBGB). This is the same as the legal notice, but it should also be clear in the ordering process, for example, with whom the contract is being concluded.

• Product information and contract content: For digital content in particular, Art. 246b EGBGB (information requirements for consumer contracts for digital products) requires detailed information before conclusion: Description of the product, functionality, interoperability, duration of provision, if applicable, the conditions for updates, duration of the contract, termination conditions, payment modalities, and also – if relevant – that the consumer has a right of withdrawal or under what circumstances it expires. These are extensive, legally prescribed information obligations, which in practice are often covered by so-called “pre-contractual information” pages or in the general terms and conditions. These legal obligations do not apply to pure B2B sales, but for reasons of transparency, it is also advisable to provide clear information.

• Linguistic comprehensibility: T&Cs must be formulated clearly and comprehensibly to consumers (Section 307 (1) sentence 2 BGB). Unclear or surprising clauses may be invalid. In the B2B sector, the standard of comprehensibility must also be observed, but somewhat more technical or legally formulated texts are more likely to be tolerated there, as it is assumed that an entrepreneur has a certain level of understanding or at least the opportunity to seek legal advice. For consumers, legal terms should be avoided or explained, and sentences should not be convoluted or misleading.

Especially for start-ups and developers who are new to the market, it is often a challenge to fully comply with legal information obligations. Our experience shows that, for example, withdrawal instructions, information in accordance with the ODR Regulation (Online Dispute Resolution Platform) and data protection information are often incomplete or incorrectly included. Here, legal support can ensure that everything necessary is in place to avoid warnings.

Warranty and liability in the B2B context

While consumers, as mentioned above, have comprehensive warranty rights, these can largely be controlled contractually in B2B relationships. For example:

• Duty to inspect and give notice of defects: Section 377 of the German Commercial Code (HGB) applies between merchants. If an entrepreneur purchases a digital product (such as a software license) from another entrepreneur, he must inspect it immediately after delivery and report any defects. If he fails to do so, the product is deemed to be approved and obvious defects can no longer be claimed. This principle can also apply to digital content, at least analogously. In general terms and conditions with entrepreneurs, this obligation to give notice of defects can be specified or extended (e.g. that regular inspections are also required for continuing obligations). There is nothing similar for consumers – there is no obligation to give early notice of defects (however, under the new law, the reversal of the burden of proof for defects is reduced to 12 months, but that is a different matter).

• Exclusions of liability: In purely commercial contracts, you often see clauses such as: “Liability for loss of profit is excluded. Liability is limited to the amount of the fees paid by the customer within 12 months.” Such limitations are usually effective in B2B contracts, provided they do not undermine core obligations. In the case of consumers, such a limitation would be ineffective, at least in cases of slightly negligent breach, when it comes to core obligations.

• Shortening the limitation period: By law, the limitation period for warranty claims in sales contracts between entrepreneurs is also 2 years, but this period can be shortened in general terms and conditions with entrepreneurs, e.g. to 1 year from delivery of the software. This is common in software license agreements. In the case of consumers, however, any shortening of the warranty period is not permitted – they have at least 2 years, and even longer in the case of ongoing performance (the period only begins after the end of provision and runs for at least 12 months, see Section 327j BGB).

Data protection and user accounts

There are also differences in the handling of personal data and user accounts, depending on whether consumers or companies are involved:

• Data protection consents: If data is collected in or around the game (tracking, marketing consents, newsletters), consumers are particularly protected by the GDPR and the TTDSG (for cookies etc.). For example, informed consent, opt-ins, etc. are required. These laws also apply to employees of a company who use software, but data is often processed in a B2B context on a different legal basis (fulfillment of a contract with the company). From the perspective of the game provider, however, the GDPR must be complied with in both cases – the difference lies more in the nature of the relationship. In the case of the end consumer, there is a direct obligation to fulfill all information rights (GDPR Art. 13 etc.), whereas in the case of a company contract, the information often goes to the company, which then informs its users if necessary. Overall, however, gaming companies should always have data protection declarations ready that are aimed at all users, whether private or business.

• User account registration: For consumers, the registration process must be designed in such a way that the inclusion of terms and conditions, revocation information, etc. is appropriate. For companies, there could be separate admin accounts. Not so much a legal distinction, but practical: B2B customers often have different account structures (e.g. a main account under which several employees can play). These differences must be taken into account in the terms of use (for example: “The customer may assign user accounts to its employees to the agreed extent, but remains responsible for ensuring that they comply with the terms of use” – a typical clause in a B2B software contract).

Summary of the differences

Contracts with consumers are heavily regulated: Many clauses are only possible to a limited extent, statutory rights may not be undermined and there are numerous mandatory information and protection mechanisms (revocation, termination button, update obligation, warranty provisions, etc.). Contracts with entrepreneurs can be negotiated on a more individual basis and can sometimes turn out to the disadvantage of one side, as the assumption here is that both parties can negotiate on an equal footing.

For a games startup, this means that if you intend to serve both private individuals and corporate customers, you should draw up two sets of T&Cs. In most cases, however, an entertainment game is aimed at consumers – in which case the T&Cs must be formulated in a consumer-friendly way and comply with the mandatory rules. If the game is aimed solely at companies (which is rare in this area, perhaps in the case of gamification software or B2B training platforms), the wording can be formulated more freely, but you should always bear in mind that clear rules avoid misunderstandings and strengthen the business relationship.

Our law firm always checks the GTC to ensure that the target group addressed is correctly taken into account and adapts the wording so that you are prepared for both scenarios.

Integration into license agreements, terms of use and platform guidelines

The points described above – from the business model to update obligations and termination rules – must ultimately be incorporated into specific contractual documents. Several levels of contractual terms are typically relevant for games as a service:

1. End User License Agreement (EULA) or general terms of use for the game.

2. Platform conditions if the game is distributed or operated via third-party platforms (Steam, Epic, app stores, console networks).

3. Possible license agreements with partners (publisher-developer, or between developer and engine provider, etc.), which only play a marginal role here, but can influence the obligations in the background (e.g. if a publisher demands certain service commitments from the developer).

The focus here is on the T&Cs/EULA for players and how to incorporate the content points explained above, as well as coordination with platform guidelines.

Design of the end user license and terms of use

An EULA (End User License Agreement) is basically the contract that grants the end user the rights to use the game and defines the rules of use. In the case of online games, the EULA and online terms of use are often combined in one document, as it concerns both the software license and the use of the service (account, online world).

We have already addressed important content that must be regulated in such terms and conditions in the course of this article. Here we summarize what should be included from a licensing and contractual perspective:

• Scope of license: It must be clearly defined what the user is allowed to do. E.g.: “The provider grants the user the simple, non-transferable right to download and install the client software for the game and to use the game for personal use.” In the case of a subscription, the license is granted for a limited period (“for the duration of the subscription”). In the case of a purchase, the license is unlimited, but often with restrictions (“as long as we offer the online service” or unlimited for offline games). Duplications (e.g. copy for back-up) or modifications must also be addressed – as a rule, mods are either prohibited or only permitted to a limited extent.

• Account and obligations of the user: As live service games generally require an account, it should be regulated how registration works, that the user must provide truthful information, that account data should be kept secret, no multiple accounts if undesirable, minimum age (protection of minors, often from 13 or with parental consent). In addition, behavioral obligations: Code of conduct, netiquette, ban on cheats/bots, no commercial use without permission (keyword: gold selling, account sales – usually prohibited in terms and conditions).

• Provider’s services: Here you briefly describe which services are provided – access to the game, forums if applicable, support – and what is not guaranteed (e.g. success in the game, permanent availability, certain player numbers, etc.). This is where the SLA aspects come into play: subject to maintenance, efforts to ensure security, but no guaranteed feature level except as agreed. If there are paid packages (subscription vs. free tier), it must be clear which services are included in the free tier and what paying customers get in addition.

• Terms of payment: Subscriptions must regulate how payment is made, when it is due, what happens if the user does not pay (default, blocking). For microtransactions: how billing works, whether virtual currencies are used (and that these have no real monetary value, are not redeemable, etc.). This also includes whether prices include VAT (always show gross prices in B2C!). Any refund exclusions (no refunds for subscriptions already used except for statutory revocation) can also be placed here.

• Term and termination: Important, as previously discussed: the ordinary notice periods, the form (in the online area via the termination button or in writing/by email – whereby the button must be included thanks to Section 312k), and extraordinary grounds for termination. In particular, it should state that the provider can block or terminate the account if the user violates the rules. Ideally, the process should also be described: e.g. first a warning, then a temporary ban, then a permanent ban. This can act as a deterrent and shows fairness by not banning immediately, except in the case of very serious offenses.

• Consequences of contract termination: The user loses access and can no longer use the game. For subscriptions: Remaining terms expire from the date of termination, amounts already paid will not be refunded (if termination is initiated by the user or termination by the provider for good cause due to user behavior). If the provider terminates without the user being at fault (e.g. discontinuation of the service), it should be mentioned that any fees paid in advance will be refunded on a pro rata basis. In addition: virtual goods, progress, etc. are lost when the account is deleted. No compensation claims for this – this should be clearly stated in the T&Cs to avoid later claims.

• Reservation of the right to amend the T&Cs or the game: Especially with live service games, you want to be able to adapt the rules (e.g. new features require new provisions) and also further develop the game. A GTC amendment clause must be very carefully formulated for consumers in order to be effective. In most cases, an announcement by e-mail and an opt-out option are used: the user can object within a certain period of time, otherwise the change is deemed to have been approved. In the event of an objection, providers often reserve the right to terminate the contract. This is common practice, but always involves a certain legal risk, as Section 308 No. 5 of the German Civil Code (BGB) sets strict limits. Alternatively, changes can only be made with express consent (which is impractical with thousands of players). It is important to limit changes to really necessary cases and to communicate them transparently. In addition, as discussed above, changes to the digital product (game updates, changes to game content) are only permitted under certain circumstances in accordance with Section 327r of the German Civil Code (BGB) – these should also be reflected in the terms of use, for example: “The game is constantly being improved and changed. We will give you at least 30 days’ notice of any significant changes that have a negative impact on usability. In the event of a significant deterioration, you have the right to terminate the contract extraordinarily at the time of the change.” – Such a clause fulfills the legal obligation to provide information and gives the user his right.

• Warranty and liability: Careful wording is required here for consumers. It should be noted that statutory warranty law applies. Attempts to restrict this are ineffective anyway, but can cost trust. On the other hand, you can make it clear that you do not guarantee that the game will run on every hardware configuration (if minimum requirements are not met, it is of course up to the user). For online-only games, you can also mention that gameplay decisions (e.g. changing the game balance) are not defects, but part of the ongoing operation – to manage expectations.
  In terms of liability, a standard clause should be included that states, for example: “The provider is liable without limitation for intent and gross negligence as well as for personal injury. In the event of slight negligence, the provider shall only be liable in the event of a breach of material contractual obligations (cardinal obligations), and the amount shall be limited to the foreseeable damage typical for the contract. Liability for loss of data shall be limited, to the extent permitted by law, to the cost of restoration using existing backup copies. Any further liability is excluded.” – Or something similar. This wording is common and effective for consumers, as it excludes core obligations and only limits liability for the rest. In the B2B sector, you could be even stricter, but as I said: you often have mixed users.

• Final provisions: Applicable law (usually German law, for consumers with the addition that mandatory consumer protection regulations of the country of residence remain unaffected), place of jurisdiction (for B2C you may not specify an exclusive place of jurisdiction elsewhere, for B2B you can agree on the registered office of the provider), severability clause, etc. There is also a reference to dispute resolution: according to Section 36 VSBG, you must state whether or not you participate in consumer arbitration, and a link to the EU online dispute resolution platform (ODR) should be included in the legal notice and ideally also in the terms and conditions. Many forget this obligation – but it is necessary even if you do not participate (in which case you must explicitly state: “We do not participate in dispute resolution proceedings before this dispute resolution body.”).

As you can see, such a GTC/EULA catalog covers all the essential legal points that we have discussed in this article. It is crucial that these documents are individually tailored to the game. Simply copying from another game is dangerous – as the game.de Start-up-Guide correctly warns, otherwise you will end up with clauses from US terms and conditions or legally outdated texts that are invalid in Germany. For example, US EULAs often contain a complete warranty disclaimer (“AS IS, no warranty”) – which has no effect on consumers in Germany. Or they violate data protection and other local regulations.

Our law firm develops general terms and conditions for games in close consultation with the developer to ensure that the clauses are legally sound and at the same time suitable for the game and monetization strategy.

Coordination with platform guidelines

Many developers do not distribute their games solely via their own website, but use distribution platforms such as Steam, Epic Games Store, GOG, console marketplaces(Sony PlayStation Network, Xbox Live, Nintendo eShop), or mobile app stores (Apple App Store, Google Play). Each of these platforms has its own guidelines and contractual conditions that influence the design of the end user conditions:

• Inclusion of own terms and conditions on platforms: Some platforms allow publishers/developers to include their own EULAs (Steam, for example: a separate EULA may be displayed when a game is first launched). Others have more restrictive rules – on consoles, for example, the entire contract is concluded in the ecosystem and the platform T&Cs take precedence. When using the platform, the user often has to agree to its terms of use, which contain certain basic rules (e.g. PSN Terms, which also regulate behavior). Developers should adapt their own terms to ensure that there is no contradiction. Example: If Sony stipulates that certain liabilities towards the end user may not be excluded, the EULA must comply with this.

• In-app purchase guidelines: On Apple iOS and Google Play in particular, it is regulated that digital purchases within an app must be processed via the respective payment system. Although this primarily affects the technical and economic aspects (commissions, etc.), it also has legal implications: In the App Store, for example, Apple (which informs the user that there is no right of withdrawal after purchase, but its own refund rules) takes over the withdrawal policy. Developers are not allowed to independently communicate different refund or subscription termination rules that conflict with the App Store. Apple also requires that subscriptions can be managed and canceled by the user via the App Store; a separate cancel button on the developer website is not necessary there (and would be of no use, as Apple manages the subscriptions). It should therefore be made clear in the terms of use for mobile apps that purchases are processed via the platform and that the terms of use of the App Store take precedence as far as the payment/cancellation procedure is concerned.

• Age ratings and content: Platforms often have requirements for the protection of minors and content classification. This is less a matter of contractual clauses and more a compliance issue. Nevertheless, terms of use can become relevant here, for example when it comes to the obligation of users to provide correct age information or that certain content may not be uploaded by users (community content, chat). There should be consistency between the platform policy and your own policy.

• Online service ecosystem: Especially on consoles, the developer enters an existing ecosystem. The network operator (Sony, Microsoft, Nintendo), for example, has its own rules of conduct and sanctions. A player who violates PSN guidelines can be excluded from the entire network by Sony – they would then no longer have access to your game, even if you as the provider have not terminated the contract yourself. You could include a note in your own terms and conditions: “The use of our online game requires a valid PlayStation™Network account. If this account is blocked by Sony, their terms and conditions apply; we accept no responsibility for this.” Something like this to make it clear that in the event of such platform-side measures, your liability does not apply.

As a provider, you should carefully study the developer agreements and guidelines of the platform partners. In some cases, they even stipulate certain formulations in end user agreements or prohibit certain clauses. For example, Steam prohibits limiting the liability of Steam itself in the EULA – which is logical, as a third-party provider only has to regulate its own liability. Some platforms have model EULAs or recommended clauses that you can use. Nevertheless, it does not hurt to have your own set of rules adapted to the platform – especially to cover aspects that the platform does not cover (such as specific game rules, cheating bans, Season Pass benefits, etc.).

Contracts with publishers or service providers

Finally, a quick note: end users don’t see any of this, but in the background of a live service game there are often contracts between the developer studio and other companies – such as a publisher that distributes the game or technical service providers (server hosting, payment providers). These contracts should mirror the obligations owed to the end user. For example, a hosting contract should ensure that the agreed uptime is achieved so that you can keep your promises to gamers. Or the contract with a payment service should clarify how refunds are handled in the event of withdrawal/chargeback, so that you can correctly refer to this in the terms and conditions vis-à-vis players.

Especially in a publisher-developer relationship (publishing contract), topics such as the monetization model, update obligations and support distribution must be contractually defined. A publisher will require the developer to comply with certain update obligations so that no legal infringements occur. The contract can also specify who draws up the terms and conditions (often the publisher) and how liability risks are distributed in the event of a warning due to incorrect terms and conditions.

For founders, it is important that all levels – end user T&Cs, platform conditions, B2B contracts – are consistent. In the worst-case scenario, a contradiction can lead to you being caught between two stools contractually (e.g. the publisher demands that you do something that is not permitted for end users or vice versa). It is therefore advisable to plan legally from the outset who assumes which responsibilities and how the contracts interact.

Relevant legal provisions at a glance

Numerous laws that are relevant to live service games have already been mentioned in the course of this article. At this point, we will summarize the most important standards and legal bases once again. This “mini-compendium” can serve as a checklist for founders and developers so that they do not overlook anything important:

• §§ 312 ff. BGB – Consumer contracts and distance selling: These sections regulate when a contract is a consumer contract and which special rights apply. Particularly relevant:

  • § Section 312a BGB: General obligations for consumer contracts (e.g. no overpriced hotlines for customer service etc.).

  • § 312b ff. BGB: Definition of distance contracts (typical for online contracts for game subscriptions or downloads) and off-premises contracts.

  • § 312d BGB in conjunction with. Art. 246a EGBGB: Information obligations for distance selling (as explained above: price, features, duration, right of withdrawal, etc.).

  • § 312g BGB: Right of withdrawal for consumers in the case of distance selling. The exceptions are important here: No right of withdrawal for fully delivered digital content after appropriate instruction (Section 312f in conjunction with Section 356 BGB), and the right of withdrawal for services expires under certain conditions (see above).

  • § Section 312k BGB: Termination of consumer contracts in electronic commerce – the aforementioned termination button.

• §§ 327 ff. BGB – contracts for digital products: This section is new and highly relevant for games:

  • § SECTION 327 BGB: Scope of application – only to consumer contracts, payment of a price (including in the form of data) for digital content or services. Digital games are explicitly mentioned as an example of digital content.

  • § Section 327a BGB: Exceptions to the scope of application (e.g. merely providing telecommunications lines is not digital content, etc.).

  • § Section 327b BGB: Obligation of the contractor to provide. Important: What does “make available” mean? (Provide access, offer download, etc.)

  • § Section 327c BGB: Rights of the consumer if provision does not take place (e.g. if a purchased download does not work or server access is not granted – then the consumer can demand fulfillment or, if necessary, withdraw from the contract).

  • § Section 327d BGB: Conformity with the contract – the entrepreneur must provide the digital product free of defects.

  • § Section 327e BGB: Material defect concept for digital products. In particular: A distinction is made between subjective and objective requirements, plus integration requirements. For games, this means that they must firstly have the promised properties (subjectively agreed, e.g. fulfill certain system requirements, contain promised features) and secondly objectively provide what an average user may expect (e.g. in the case of a multiplayer game, one expects at least a fundamentally stable online experience, in the case of a download, one expects it to run on standard hardware, etc.).

  • § Section 327f BGB: Duty to update – as discussed in detail: Duty to provide updates to maintain conformity with the contract, including security updates, during the relevant period.

  • § Section 327g BGB: Defects of title – e.g. the game must not infringe any third-party copyrights, otherwise it would be defective (the user should be able to use it without infringing third-party rights – the provider’s task is to ensure this).

  • §§ 327h-327m BGB: Warranty rights in the event of defects. These essentially reflect the general warranty rights: subsequent performance (Section 327l BGB – the consumer can choose between rectification or new delivery, as far as possible for digital products; usually it will be rectification/patch), withdrawal or reduction (Section 327m), compensation (Section 327m (3) refers to the normal compensation rules). A special feature: In the case of continuing obligations, withdrawal corresponds to termination ex nunc (for the future) – you can therefore withdraw from the contract, but only with regard to the future; services already rendered (past subscription months) can at best be reduced.

  • § Section 327j BGB: Statute of limitations and burden of proof. Among other things, the reversal of the burden of proof for consumers has been newly regulated here: If a defect becomes apparent within one year of provision (or within the duration if it is an ongoing product), it is assumed that it was present from the beginning – the provider would therefore have to prove that the problem was caused by something at the user’s end. And warranty claims expire at the earliest 12 months after the end of the update obligation period. This means that if the update obligation runs for 2 years, for example (typically the warranty period), you still have 1 year to assert claims if a defect occurs within the 2 years. For ongoing contracts, this could be a very long time – in any case, it prevents providers from evading responsibility by sitting out the term.

  • § Section 327k-327p BGB: Further details, e.g. the consumer’s duty to cooperate (e.g. installation of updates), consequences if consumer does not cooperate (loss of claims if update not installed, Section 327l (2)).

  • § Section 327q BGB: Relationship to data protection – the provider may not impose any contractual disadvantages on the consumer because the consumer exercises data protection rights. Example: If a player requests that their personal data be deleted (under GDPR), the provider may not simply terminate the contract unless further performance of the contract is impossible because the data was absolutely necessary (Section 327q (2) allows termination if the data was necessary for performance and performance is not possible without the data). Otherwise, consumers should not be afraid to exercise their data protection rights.

  • § Section 327r BGB: Changes to the digital product – as discussed, requirements for permissible changes during an ongoing contract, information obligations, consumer’s special right of termination in the event of significant changes.

  • § 327t-327u BGB: Recourse of the entrepreneur in the supply chain – relevant if, for example, the developer delivers to the publisher and the publisher delivers to the end customer, then the publisher can take recourse if the developer is actually responsible for the defect. This is not relevant for end user T&Cs, but it is for contracts between companies.

• Youth protection law: Although not perceptible to the user as a contract, as a provider you should be aware of the provisions of the Interstate Treaty on the Protection of Minors in the Media (JMStV) and the Youth Protection Act. This includes age ratings (USK) for the game, labeling of online offers with age levels or technical means to ensure that children do not access 18+ content. For GaaS with online elements, features such as chat or user-generated content, which must be moderated to prevent content that is harmful to minors, are also relevant. Also new in DE since 2021: Potentially gambling-like mechanisms (e.g. loot boxes) may have to be taken into account in the age rating. This is a separate topic, but should at least be mentioned, as founders often have to implement solutions for this (age verification systems, filters), which in turn can be included in terms of use (e.g. “Account holder confirms that he/she meets the required age according to USK rating”).

• Data protection (GDPR, BDSG): Every online service must be data protection compliant. A privacy policy is mandatory, but is not part of the general terms and conditions (but is separate). Nevertheless, data protection is included in the contracts: If personal data is processed for a subscription, for example, this must be permitted in the contract. The T&Cs can contain information that certain data is stored (e.g. player data, chat logs for abuse control, etc.), but the actual legal basis is the GDPR. Important for GaaS: often international players – if you offer outside the EU, terms and privacy must be globally coordinated.

• Competition and consumer protection laws: Failure to provide mandatory information (e.g. imprint, revocation) or unfair practices (misleading advertising, e.g. about in-game purchases) can result in warnings under the UWG (Unfair Competition Act). Since 28.5.2022 (implementation of the Modernization Directive), for example, certain practices in games have been expressly declared as consumer deception, such as the manipulation of ratings or opaque personalization of prices. Although these topics only touch on contract law peripherally, it is good to have them on your radar.

This is not an exhaustive catalog of all conceivable legal norms, but covers those that experience has shown to be most important in connection with live service games and their contracts. The innovations of 2022 in particular (digital products, fair consumer contracts) have changed the terrain. Accordingly, existing GTCs and contracts that were created before these changes should be urgently updated in order to be up to date.

Conclusion

Live service games (games as a service) offer enormous potential for long-term player loyalty and continuous revenue. At the same time, however, they place high demands on a clean contractual structure. From the right business model (subscription or sales with DLC) to update and support obligations, availability commitments, termination rules and consumer protection-compliant design, numerous legal aspects need to be considered. The latest legislative changes – particularly in digital contract law – bring with them additional obligations that should definitely be taken into account in contracts and general terms and conditions (keywords: update obligation, termination button, right of withdrawal for digital goods, special rules for changes).

For founders and developers who may be launching a live service game on the market for the first time, this tangle of regulations can be overwhelming. This makes it all the more important to seek legal advice at an early stage. A specialist games law firm – like ours – knows the pitfalls and industry standards. I can help you draft trustworthy and legally compliant terms of use that both protect your business interests and comply with legal requirements.

Well-drafted contracts are not just an annoying formality, but also a means of shaping the relationship with your players: Clear rules create trust and reduce the potential for conflict. If players know where they stand (how they can cancel, what happens if the server is down, what rights they have in the event of problems), this increases long-term satisfaction. At the same time, you protect yourself from unjustified claims and have a solid contractual basis to fall back on in the event of a dispute.

In conclusion, it can be said that games as a service combine technology, community and law in an exciting way. If you have the legal framework under control, you can concentrate on continuously improving your game – and making both players and investors happy. If you have any questions on these topics or need support with contractual implementation, I will be happy to provide you with my expertise. After all, your success in the live service game sector should not be hindered by legal hurdles – we can help you pave the way.