Published: August 29, 2022

Virtual reality (VR) has taken the market by storm, dominating headlines with talks of online worlds, immersive simulations, and metaverse-centric technology. As we learned from WIT affiliate expert and noted technology analyst Scott Steinberg, this industry is also widely unchecked, prompting standard-setting entities to begin preparing for regulatory action. But what does this action specifically entail? And will the regulation or administration of these virtual worlds look like a virtual government?

The Virtual Reality Evolution

As this technology continues to evolve, these virtual social experiences will become much more complex, comprehensive, and sophisticated, making the interaction less about a game than an experience. On one hand, you have some challenges with virtual reality, augmented reality, or extended reality collectively becoming much more immersive. Today and increasingly in the future, it’s designed to put you in these 3D simulations and worlds so you can feel what it’s like to be rocketing down a mountain or riding a rollercoaster.

However, that will create its own challenges; you are going to start producing things that might trigger people or could put them in situations that are more intense or uncomfortable. On top of that, much of this is driven by user interactions- the content they’re sharing, the conversations they have- making regulation an issue of community management. Right now, the lack of regulation is prompting a big question about where responsibility for all the oversight is going to lie. But as these worlds become intricately designed, there’s an equally large question around how companies are going to cost-effectively manage this complexity.

Governing Virtually

As Steinberg highlighted, the technology giants with online and social platforms are some of the most lucrative and successful companies in the world. At the same time, though, we know that even they are coming under fire for their regulatory ability as they struggle to monitor the content that’s being shared on their platforms- let alone how they apply policies. On top of that, the industry is experiencing extensive growing pains; these are aside from the metaverse, the world of web 3.0, and simulated real-life interaction, it’s only going to get more complex from here.

Steinberg feels that we are currently struggling with content moderation because technology is outpacing our ability as humans to get a handle on it. He lamented, “I really would like to see social networks clean up their act when it comes to moderating content and getting more rapid about responding to users’ concerns before we then begin to dive into this entirely new horizon.” And as VR grows into one of the most profitable and innovative sectors of the entertainment industry, companies need to put plans in place that will allow them to regulate better, faster, and stronger. And this leads us to wonder: what type of self-regulation will we see in the gaming space as investments in the market soar?

The Reality of Self-Regulation

In other areas of the entertainment industry, self-regulation takes a significant role. For example, you rarely see someone casually smoking in a movie or TV show anymore unless it’s essential to the plot or character; over time, the industry evolved to regulate and remove this behavior on account of shifting consumer values, public pressure campaigns, and internal reasoning. The gaming industry has done a good job of being proactive on account of regulatory bodies like the Entertainment Software Rating Board (ESRB) rating and providing guidelines on their products to help people make more informed decisions about the content they’re consuming. This is important because as Steinberg explained, “Where I think things start to break down a little bit is the user experiences and the interactions. It’s one thing to say, on a game box ‘Hey, by the way, this has voice and video.’ It’s quite another when your kid is out there interacting with people who may be sharing inappropriate content, introducing influences, or putting people in uncomfortable situations. A lot of it comes back to this community management.”

To their credit, Steinberg said that gaming companies do actively employ community managers. But a lot of the issues at hand also operate in a viral fashion that can scale very quickly before other creators have a chance to get policies and procedures in place. At the moment, they can evaluate variable permutations and scenarios, but, like any complex simulation, it can go off in a multitude of directions that you didn’t predict and aren’t necessarily positive. And that’s even before you start to think about user-generated content and cross-platform integrations. Games are proliferating on so many different platforms; now, Microsoft is making it possible to play games on its cloud gaming service without having to own an Xbox console. Alongside this, you also have increased regulation being implemented around what information users can share, what data apps can access, and what’s appropriate to share with children.

All these issues and more prompt us to ask yet again: How do you manage this rapidly expanding industry, let alone do it cost-effectively? And how do you mitigate disputes along the way?

The Future of VR

The gaming business is one of the fastest-moving and most competitive in the world. The players in the space are struggling to keep up, attempting to create content on a running basis as customers have more choices than ever. You got to keep people engaged as a business, but at the same time, you’re being asked to manage this whole other social aspect and regulatory aspect that game makers in the past didn’t have to consider. And this lack of consideration from present-day game makers and VR purveyors is already causing waves of litigation to flood in.

We have already seen disputes arise in regard to virtual currency, downloadable content, deceptive advertising, minors’ use of specific platforms, and even sexual assault in the metaverse. Luckily, WIT’s expert teams were created to address what we expect to be the key areas of litigation in emerging virtual reality technologies. If your company needs help preparing for these challenges, reach out for the best experts who can advise you on your strategy

Stay tuned for more insights from our conversation with WIT affiliate expert Scott Steinberg. Mr. Steinberg is hailed as one of the world’s most celebrated futurists and strategic innovation consultants. He has been featured in hundreds of media outlets from CNN to TIME to The Wall St. Journal, with the Fortune 500 calling him a “defining figure in business and technology” and “top trendsetter to follow.”

Next in this series, we’ll cover innovations in fintech and the implications of its ongoing evolution.

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