If you are designing, marketing, or selling games in New Zealand, it is important to know that, as commercial entities, you are subject to the same consumer protection laws as other businesses. The Commerce Commission (the Commission) has recently reviewed the gaming industry and identified several common risks under the Fair Trading Act 1986 (the Act). These risks can lead to serious penalties if not properly managed. 

On 10 June 2025, the Commission issued an open letter to the New Zealand Game Developers Association, highlighting key compliance risks under the Act. We see this as an opportunity to support the sector in strengthening its commercial practices and building consumer trust. The Commission’s guidance is not necessarily a critique of the industry – it is a call to ensure that game developers are equipped with the knowledge and tools to meet their legal obligations confidently and consistently.

Here’s an overview of what developers need to know

The Commission identified five areas where developers may be exposed to compliance risk. These are not uncommon in fast-paced, creative industries, and with the right advice, they can be addressed without disrupting innovation or player experience.

Discounts must be genuine

Discounting is a powerful marketing tool, but it must reflect a real saving. Advertising a “sale” price that is actually the usual price, inflating prices before a discount, or referencing a previous price that was never charged, can mislead consumers and risk breaching the Act. The Commission cited examples where cosmetic packs were advertised at steep discounts from prices that had never been used.

Sales practices must be transparent

Using countdown timers and urgency language (such as “limited time”, “rare”, “today only”) in relation to offers, is a common practice on mobile games. However, if these features are programmed to reset or misrepresent availability, they may give a false impression of scarcity. The Commission encourages developers to ensure these features reflect genuine offers and do not mislead players into making rushed purchases.

Claims must be substantiated

Promotional material - whether trailers, screenshots, or feature lists - must accurately reflect the product. Marketing incomplete alpha games as finished products, promoting features that do not yet exist, or making future claims without a reasonable basis can risk breaching the Act. The Commission referenced the case of Battlestate Games, where confusion over downloadable content access led to community backlash.

“Free” must mean free

It’s important to be upfront about what’s included – if players must pay to access core features, the game or app cannot be advertised as “free”. Transparency builds trust and avoids disappointment. A recent report involved a “free” companion app that required a $3.99 payment to unlock content.

Gamers’ rights must be respected

Players are entitled to refunds or remedies under the Consumer Guarantees Act 1993 for faulty games, and you cannot override these rights with your own terms. Game-breaking bugs, for example, can entitle players to a remedy. Developers should avoid blanket statements like “no refunds” or imposing arbitrary time limits on refund eligibility. These may misrepresent gamers’ rights and risk breaching the Act.

Unfair contract terms

While not called out by the Commission in its letter, this is a good opportunity to check your standard terms and conditions more generally. This is because the Unfair Contract Terms (UTC) regime under the Act is relevant to developers offering games, subscriptions, or content under standard form contracts. If your studio offers standard terms and conditions to its customers – like end-user licence agreements, subscription agreements, or in-app purchase terms – without negotiation (as will very likely be the case), those contracts may be considered standard form consumer contracts. This means, the UCT regime could apply, and the Commission can challenge terms that are unfair.

A term may be declared unfair if it:

• creates a significant imbalance in the parties’ rights and obligations;
• is not reasonably necessary to protect the legitimate interests of the advantaged party; and
• causes detriment (financial or otherwise) to the other party.
• A court may also consider whether the term is transparent (clear, accessible, and easy to understand), and will look at the contract as a whole, not just the individual term.

For example – common contract terms used by developers that could be at risk, include:

• No refunds under any circumstances, even for faulty games.
• Automatic renewal clauses without clear notice or opt-out options.
• Unilateral changes to game features, pricing, or access rights.
• Terms that limit liability for bugs or service outages.
• Penalties for early termination of subscriptions that are disproportionate.

Why this matters

The Commission’s goal is to ensure that developers can create and sell games with confidence. Penalties for breaches can be significant - up to $600,000 per offence for companies - but they are avoidable with good advice and proactive compliance.

How we can help

At MinterEllisonRuddWatts, we can help you understand your legal obligations. We understand that navigating compliance can be tricky – especially when the line between doing things right and getting it wrong is not always clear. Many studios may unknowingly be exposed to legal risk, as some common industry practices can actually fall foul of the law. 

We have experience working with creative businesses of all sizes, and we understand the unique challenges of the gaming sector. Our team can:

• Help you understand your obligations under the Fair Trading Act and Consumer Guarantees Act. 
• Review your pricing and promotional practices.
• Assess and help you substantiate marketing claims.
• Assist in navigating “free-to-play” models.
• Review your standard form contracts for compliance with the UCT regime.
• Help you draft transparent, fair, and compliant terms and conditions.
• Advise on enforcement risks, including potential fines of up to $600,000 per breach for businesses.

We’re here to support New Zealand’s creative industries and help you succeed. We can help you make sense of how these rules apply to your games and business model. If you have any questions in relation to the issues raised in the Commission's letter or are considering how these issues could affect your business, please contact one of our experts. 

This article was co-authored by Danielle Rayner (Law clerk) from our TMT team.