Do I need a commercial license to use games for a VR arcade?

Thinking of opening a virtual reality (VR) arcade? Be prepared to learn about the exciting world of commercial licensing! In order to legally offer a physical location where others will access content like video games (whether they pay for them or not), you must purchase commercial licenses of games.

What is a commercial license?

When you buy a digital download of a game, you are almost always actually just “licensing” it. The normal license is a personal, noncommercial license subject to the ordinary EULA. A commercial license is a license that allows you to use, in this example, a game in a public or commercial setting. Typically, purchasing one commercial license for a game means that it is valid for one “seat.” If you have three VR headsets in your arcade and want to offer the same game on all three of those headsets, you will need to buy three commercial licenses.

Even if you’re running a VR arcade and you don’t charge people for playing the games, you must offer commercial licenses of games. This applies to arcades, amusement/theme parks, Internet cafes, dorms, museums, stores and more.

Developers can choose whether to offer a commercial license and what they will charge for the license. And you must receive the developer’s permission to offer a game commercially – a regular license to a game does not allow for commercial use.

How do I receive proper permission?

You’ll need a licensing agreement with a developer in order to compensate them for a commercial license and offer the game in your VR arcade. This might mean doing things like talking with a lawyer to establish the licensing agreement, granting you a commercial license that you and the developer both sign.

There are simple ways and more complex ways to go about doing this. Below are a few examples – but remember, you must receive permission from the developer in order to legally offer a game in your VR arcade. Again, I repeat: you must receive the developer’s explicit permission to offer a game commercially.

Proper permission example #1: Steam’s site licensing program

The Steam Site Licensing Program, previously the Cybercafe Program, makes things extremely simple for VR arcades now to offer games from Steam. Steam is currently the market leader in the PC digital distribution space, compared to other programs like Origin, Uplay, GOG, and WePlay.

In order to use this program, you need to sign up with a private account (for free) to view the site licensing program options. Per Steam’s words,

Commercial licenses can be found by visiting the game’s individual store page – the license will be displayed right under the regular end user price. You can also search for the commercial licenses by ticking the “Site Licenses” option under “Show selected types” or by clicking the link here. On the game’s store page, the commercial license price will be displayed right under the regular purchase option.

The current list of all VR games with commercial licenses is available here. Note that not all developers participate in this program. There are over 900 results at the time of this posting for VR games available commercial – compared to the thousands of VR games currently available on Steam.

The big advantage here is that you don’t have to contact the developer to use their game through this platform. It’s a nice gesture to message  a developer and still let them know so they know you’re using the game legally. However, you don’t have to provide your own licensing agreements or wait to settle terms with the developer as they’ve already set their price on Steam.

Proper permission example #2: direct licenses

For developers who aren’t offering their game through Steam or don’t currently offer a commercial license, your primary option is to contact them directly to negotiate a license. Typically, this requires a monthly payment to the developer. They may tell you that they’ll be offering a commercial license on Steam soon or that their game is unavailable for commercial use. It’s up to them as to what they want to do with the rights for their game.

This approach is a lot less efficient than Steam’s program and it can be unwieldy to manage different monthly licenses with different developers, however, it may be necessary. You’ll need a licensing agreement to solidify permission here.

Proper permission example #3: PPMPPM

A less common approach now that Steam’s program is taking off – PPMPPM stands for “Pay Per Minute Played Per Month.” This means that if you’re not getting the game through Steam (proper permission example #1) or you’re not agreeing to a monthly license (proper permission example #2), you may consider this route to track how long a title is played across your arcade’s seats in minutes then compensating the developer at a set rate per minute.

This approach can favor the arcade owner over the developer but it also means there must be tracking software in place to track all of this time. The arcade owner will typically monitor the time played and set terms in the licensing agreement.

 

TL;DR

You need a commercial license to use games for a VR arcade. Allowing people to access games through personal licenses is blatantly impermissible under the license and you could be liable for copyright infringement and breach of the license agreement. If you ask a developer to offer a game and they will not offer you a commercial license or you cannot come to an agreement on the price or structure for the agreement, you can’t offer the game. It’s as simple as that.