A new California law mandates digital game stores, like Steam and Epic Games, to inform consumers whether a purchased game grants them ownership.

California Law Ensures Clarity on Game OwnershipImplementation Next Year

A new California law mandates digital storefronts to be transparent about purchases. The new law compels online stores to inform consumers whether transactions grant a license—not ownership—of the purchased product.

California Governor Gavin Newsom recently signed AB 2426 to better protect consumers and counter deceptive digital goods advertising. This law encompasses video games and any digital application used with them. The bill defines "game" as "any application or game accessed and manipulated using a specialized electronic gaming device, computer, mobile device, tablet, or other device with a display screen, including any add-ons or additional content."

Accordingly, the law mandates digital storefronts to use clear and prominent wording in sales provisions, such as "larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks," to inform consumers.

Those who are found guilty of deceptive advertising may face civil penalties or a misdemeanor charge, depending on the circumstances. "Existing law makes a person who violates specified deceptive advertising provisions liable for a civil penalty, as specified," the act reads, "and provides that a person who violates those deceptive advertising provisions is guilty of a misdemeanor."

Additionally, it prohibits a seller from advertising or selling digital products that claim "unrestricted ownership" of the digital good. "As we move toward an increasingly digital marketplace, it is crucial that consumers clearly understand the nature of their transactions," the legislators wrote in the bill comment in relation to the importance of informing consumers. "This includes the reality that they may not have true ownership of their purchase. Unless the digital good has been offered for download so it can be viewed offline, the seller can remove consumer access at any point in time."

The California law takes effect next year, and will also forbid online vendors from using certain phrases that might imply unlimited possession of the digital assets, such as terms like "buy" or "purchase," unless shoppers are clearly and explicitly told that the "purchase" doesn't signify unrestricted access or possession of the product.

"As retailers increasingly transition away from selling physical media, the need for consumer protections on the acquisition of digital media has become increasingly vital," California Assembly member Jacqui Irwin said in a statement. "I thank the Governor for signing AB 2426, ensuring the misleading and deceptive advertising from sellers of digital media wrongly telling consumers they own their acquisitions becomes a thing of the past."

Provisions on Subscription-Based Services Remain Unclear

In recent years, several gaming firms, such as Sony and Ubisoft, have deactivated some titles, rendering them inaccessible to players who previously purchased them. This has sparked debate within the gaming community concerning consumer rights. One example was Ubisoft's April shutdown of The Crew racing game series following its removal from sale. Ubisoft cited "licensing limitations" as a reason, resulting in player access loss. Such actions often occur without prior notice.

However, the new legislation omits subscription services like Game Pass, or companies' "rental" digital offerings, and lacks specifics on offline game copies—leaving these areas unclear.

In January, a Ubisoft executive suggested players should accept not technically "owning" games, referencing the rise of subscription models. Discussing Ubisoft's new subscriptions, Philippe Tremblay, the company's subscription director, told GamesIndustry.biz that a shift towards subscriptions is needed as player acceptance grows.

"One of the things we observed is that gamers are accustomed to, somewhat like DVDs, possessing and owning their games. That's the consumer shift that needs to occur. They became accustomed to not owning their CD or DVD collections. That's a transformation that's been somewhat slower to occur [in games]," he said. "As gamers become accustomed to that aspect… you don't lose your progress. If you resume your game later, your progress file remains. That's not been erased. You don't lose what you've achieved in the game or your involvement with the game. So it's about feeling comfortable with not possessing your game."

In addition to his remarks, Assemblymember Jacqui Irwin further stated that the new law is intended to assist consumers in having a more complete understanding of what they are purchasing. "When a consumer purchases an online digital good such as a movie or TV show, they receive the ability to view the media at their convenience. Often, the consumer believes that their purchase has granted them permanent possession of that digital good, similar to how the purchase of a movie on a DVD or a paperback book provides access indefinitely," Irwin said. "In reality, however, the consumer has only purchased a license, which, according to the seller's terms and conditions, the seller can withdraw at any time."