Let’s talk FPB, Steam, online distribution and ratings
Who’s the FPB, and what are they doing?
Let’s get everyone on the same page before going into the nitty gritty details. The Films and Publications Board (often abbreviated to the “FPB”) is South Africa’s content ratings agency. Currently the FPB is mandated to rate all ‘games’, ‘films’ and other ‘publications’ that are distributed in the Republic. It is important when discussing what the FPB does, and what it is proposes to do, to understand that it is a creature of statute (it exists because a piece of legislation says it exists, in this case the Films and Publications Act 65 of 1996 as amended). Crucially the FPB only has the power to do things that its governing legislation allows it to do. So what are these powers? Well the ones important to this topic are:
- Classifying all films and games ‘distributed’ in South Africa;
- Requiring all ‘distributors’ of films and games to register with the FPB;
- Being able to charge ‘distributors’ a fee for registering;
- Being able to charge ‘distributors’ a fee for classifying their content; and
- Fining ‘distributors’ who fail to comply with the above.
Currently because of how the words “distribution” and “distributor” are defined in the Act it is questionable if the FPB has the power to classify games, films or other publications that are made available online. It was for this reason that the FPB has had to start a process to amend the Act to clarify and make certain that it does have the power to classify online content. These amendments are currently being debated in parliament by the communications committee. In the current draft of the amendment a distinction is made between offline and digital distributors, along with commercial and non-commercial distributors.
The source of the most recent outcry against the FPB has been because of them publishing new tariffs for distributors and classifying content. If the new tariff structure is implemented then online distributors such as Steam, the Android Play Store and Netflix would be looking to pay millions of Rands in registration fees (currently the registration fee for a distributor is only about R2000) on top of then having to pay further fees to have each item in their content library classified. This has had many in the games community concerned that major online distributors will choose to stop servicing the South African market.
How valid are these concerns?
A very important starting point is to know that the new tariff structure can only be legally enforced if the amendment bill is passed. If the amendment bill is not passed, then the FPB does not have the authority to charge different registration rates based on how you distribute. In terms of the current legislation, there is only one kind of distributor, and therefore there can only be one registration fee. Any foreign company that paid the proposed tariffs would very likely be in breach of global anti-bribery or corruption laws, so attempts by the FPB to bully foreign distributors into paying should be resisted. Currently the amendment bill is stuck in parliament, and it is not clear when or if it will ever become actual law. So, for now at least, the proposed tariffs and its implications for the South African gaming community is moot.
But what if it is passed?
If we assume that the bill and tariffs are passed and become law, then what? Well, along with the changes to how a distributor is defined, a ream of new sections have been added which allow for the possibility of self-classification and the use of other classification guidelines instead of the FPB’s. Online distributors would have three options:
- Register with the FPB and submit all their titles for classification.
- Register with the FPB and apply to self-regulate.
- Register with the FPB and apply to have another classification system used.
Option 1 will be unpalatable for nearly all online distributors and it is highly unlikely that they would be prepared to commit the dedicated resources to comply with option 2.
That leaves us with option 3, which is what I would predict most platforms would go for. If they elected to use something like the German’s USK, the EU’s PEGI or the American ESRB systems, they could be certain that most of their titles will have a classification.
You will notice though, that these options require the distributor to register, and therefor pay the annual fee. The proposed annual registration fee is based off the number of titles currently available on the distributors platform. Journalists have already used the available information to work out that Valve would need to pay about R3.17 million to be able to distribute game via Steam in South Africa. It is estimated that the consumer spend for PC digital games was R124 million in 2016. It is safe to assume that the majority, if not all, of this spend is going to Valve. However this value is reflective of the retail price. If we account for the fees paid to the developers, Valve would only be generating about R37.2 million in revenue from South Africa. The proposed fee is therefore nearly 10% of the earnings from South Africa, and that may be too much for Valve to stomach.
Which leads us to option 4) Ignore the changes and continue as is. If Valve elects to do this, then they would potentially face fines of up to R6 million, but the FPB would have great difficulty trying to enforce this against a foreign entity with no physical presence in South Africa. The FPB has explicitly stated that in cases where foreign entities refused to comply, and they would be unable to fine appropriately, they would move to block access to that entities platform from within the country.
While I believe that age classification is important consumer information, I do not believe that it is so important that it should lead to the complete banning of content or the walling off of sections of the internet.
How will this affect Developers?
If the amendment bill is passed, it won’t have a dramatic effect on local developers, apart from the rather sad eventuality that locally produced games may not be sold in South Africa. The only time a developer would need to register and have content rated is if they elected to sell their games through their own website. The bigger concern is that if the FPB does block platforms it may be difficult for developers to access the developer side of certain platforms (like Steam). It would also potentially lead to the blocking of much smaller distributors or platforms that deal with more experimental games (like Itch.io or the Global Game Jam site). I believe that if this did happen we would see an exodus of developers from the country.
How will this affect Consumers?
While it is not a crime for consumers to purchase or play unrated content, they stand to be the most effected as access to digital games may become very difficult, especially for laymen consumers who do not know about VPN’s or other methods of by-passing the FPB’s block. I think with a scarcity of digital platforms, we would almost certainly see an increase is piracy as consumers turn to easier and cheaper methods of getting their games.
What can I do?
While there is nothing that you can do now about the amendment bill, the proposed tariffs is open for public comment until October 29th to submit your comments to the FPB. You can submit your responses to the following email: email@example.com