How paying for content ratings is hurting devs who release in Europe

A few months back I was Skyping with Matthew Burns and Zach Barth about Zachtronics’ TIS-100 when Barth mentioned his frustration with PEGI, Europe’s self-regulating video game content ratings agency.

“We have to work with them, and they have some crazy policies that are not cool for indies,” he told me. “You can't put your game on an Xbox or PlayStation without a PEGI rating, and they charge thousands of dollars.”

PEGI designed its licensing fee scheme for digital games based on how it's been rating physical video game releases since 2003: with the expectation that publishers would foot the bill. But the rise of self-publishing has created situations where the biggest line item on a small developer’s budget may well be ratings board licensing fees.

Is that, in turn, putting pressure on indies not to release their games in Europe on platforms that require PEGI ratings, i.e. Xbox Games Store, Sony's PSN and Nintendo's eShop?

Indies are paying roughly $300-$1,000 per platform for a PEGI rating

Happion Labs, for example, released Sixty Second Shooter Prime on Xbox One last year through the ID@XBox program and reported the biggest expense was paying just over $2k in PEGI and USK fees so the game could release on the Xbox Games Store in Europe and Germany.

By comparison, getting the game ESRB-rated so the game could be sold in the U.S. cost nothing; the ESRB rolled out a free, streamlined voluntary rating service to digital platforms years ago.

This week studio frontman Jamie Fristrom told me via email that paying for ratings ultimately proved worthwhile (“SSSP on Xbox One has been the most I've earned for time invested of anything I've done as an indie”) but that it does seem like PEGI’s fee scheme has a chilling effect on indies releasing games in Europe.

“It used to be that localization would have been the big expense to release in Europe, but the costs of loc. keep dropping and often indies can get it done for free by tapping their communities, so that PEGI license becomes the big cost of shipping in Europe,” wrote Fristrom.

PEGI knows this. It’s been taking fire on this front from members of the European game industry for some time (UK game industry trade body TIGA called on PEGI last year to reform what it called “unreasonably high and repetitious fees”) and when I sat down with agency communications manager Dirk Bosmans at Gamescom last month, he tried to offer both an explanation and the promise of a near future where no indie will have to pay for a rating on a Microsoft, Sony or Nintendo platform ever again.

But first, he acknowledged PEGI’s fees are an outdated relic of the way the video game industry used to operate. They're also the primary thing keeping PEGI in business.

PEGI knows this is a problem, but it wants to maintain income

“Our money comes from fees that publishers pay to get a ratings license...that’s basically our only source of income,” Bosmans told me, estimating that PEGI has less than five full-time staffers. “When we were at the height of the console cycle, there were lots of games. That’s come down in the past few years, so obviously our income is shrinking.”

“A couple of years ago, if you’d asked me [whether PEGI fees have a chilling effect on European game releases], the answer probably would have been no, because in order to release a game in a box on a shelf you’d need a lot of funds,” said Bosman. “But because digital is so much more accessible, it’s much easier to release a game, but we still charge the same.”

The developers I spoke to typically paid (depending on exchange rates) between $300-$400 per platform for a PEGI rating if their game took up 450 megabytes or less when fully installed; rise above that size limit, and the fee rises to around $1,000 per platform.

Barth brought Infinifactory out of Early Access earlier this year, and plans to bring it to PlayStation 4 next

“So yeah, because Infinifactory is 3D it cost us three times as much to rate it,” Barth tells me. “That doesn’t make any sense! Our budget is not three times higher because the game is 3D. We totally cheaped out; the assets just happen to be kind of big on the disk.”

In Barth’s eyes, the whole thing is arbitrary. PEGI sets fees based on your total development budget and the size of your game install, but it recently raised that size limit from 250 MB to 450 MB -- so why not raise it a bit higher, or just do away with the fee structure entirely and offer voluntary free ratings for digital games, like the ESRB does?

“A few years ago, yes, they suddenly decided to make everything digital, free. If we would do that, we'd basically destroy our income; we wouldn't be able to continue our operations,” said Bosmans. “I understand that it's difficult for the developers at the bottom, but at the same time, making exceptions for them is not fair to other developers either. So we can do low-budget fees, we can do casual fees, but if you are above that, we have to charge the same fee. We have to be straightforward in that.”

I should note here that PEGI uses the term “casual” to refer to digitally-distributed games that fall under its 450 size limit. The content doesn't really matter, just the file size, so you can save a chunk of change by keeping your game small. However, even developers who squeak in under the limit are a bit frustrated with the process of getting PEGI-rated.

“Fortunately Axiom Verge is under 450 megabytes, so it arbitrarily classified as a 'casual game' with a cost of 260 euros for each platform...but that's basically just due to my choice of pixel art, which compresses well; the same game with HD art would go over 450 megabytes and cost 2,100 euro plus 1,050 for each platform,” Axiom Verge developer Thomas Happ recently told me via email.

Axiom Verge was released on PlayStation 4 back in March, and is not my idea of "casual"

“Mainly for me it is just time-consuming and frustrating," he added. "You also have to create a highlight reel showing all the most egregious blood/language/sexual content in the game, and it takes them a while to process the whole thing. Since I'm a solo dev it means all development stops as I'm doing it.”

Barth echoes these complaints about PEGI’s video reel submission requirements (“It takes forever, and it’s a pain in the ass”) and asks a question that has, in turn, been echoed by other developers I’ve corresponded with: Why can’t the process of age-rating your game for release in Europe be straightforward and free, like it is in the U.S. under the aegis of the ESRB?

“Simplifying this process would be extremely beneficial to small teams that would rather focus their time on developing and marketing their game,” Sportsfriends developer Ramiro Corbetta (maker of Hokra) tells me via email. “Removing the PEGI charge would obviously be great for developers, especially those operating at a smaller scale who might be worried about not making enough money in Europe.”

But is paying for PEGI ratings inhibiting indies from releasing games in Europe? Corbetta says no, not really -- it's just a painful but necessary reality of game development.

"Dealing with ratings boards is never glamorous and it comes up at a point in development when you are least excited about filling out paperwork, but we always knew that it would be a necessary step to finish the game," he told me. "While any costs can be painful for a small development team, we always assumed that European sales would be much, much larger than the cost of PEGI ratings, and now that we have sales numbers in front of us we know we were right."

In the face of Infinifactory's impending PlayStation 4 release, Barth isn't so sanguine about the price.

"I'm always optimistic going into a new title. I really hope that Infinifactory sells a ton of copies," he says. "But in all honesty, it's probably not going to, and the PEGI cost is probably going to eat up a substantial amount of what we make in Europe. It's not enough to not do it, but it hurts."

IARC might (eventually) be the answer

Again, PEGI knows this, and Bosmans promises that things will change -- soon.

“IARC should solve these issues," he tells me. "If Nintendo, Microsoft and Sony are joining IARC, getting your game rated for ESRB, PEGI, USK and all the other ratings boards will be free. That’s our goal.”

Here’s the pitch: IARC (International Age Ratings Coalition) is a process whereby you fill out a questionnaire and receive an auto-generated content rating for all ratings boards participating in IARC (notably the ESRB, USK, and PEGI) every time you submit a game to a participating digital storefront.

It doesn’t take very long, and it’s completely free -- IARC draws revenue from royalties paid by participating storefronts, and Bosmans says PEGI's cut will allow it to stay in business in the absence of revenue from licensing digital games to use its ratings.

Earlier this year IARC was implemented in the Google Play Store, and Bosman expects it to come to Sony, Microsoft and Nintendo’s digital platforms at some point in the near future.

“I’ve just come out of two days of IARC meetings [we were speaking at Gamescom, remember] and it seems we’re in very, very good shape,” he told me. “I don’t have timeframes for you, but I do know that Nintendo, Microsoft and Sony are working on the implementation. So at some point in the future, I can say, those four will be using IARC.”

When that will happen, exactly, depends on how quickly the three companies integrate IARC into their platforms. When I press him about timelines -- are we talking weeks, months, years? -- Bosmans says any estimate would be misleading, because this is the biggest IARC rollout yet.

“It’s a gigantic operation. We thought when we knew that we could make an adoption by Google possible, that was going to be the biggest undertaking ever -- it was very difficult,” he tells me. “But now, with three different platforms joining at the same time and possibly new ratings boards joining too [Japan’s CERO board recently expressed interest in joining IARC] it’s become a massive undertaking.”

“I'd love to see a timeline for that; it's one thing for them to say that they've ‘committed’ but having it actually be a reality is the only thing that matters,” Barth responds.“We used IARC to rate a few of our Android games and it was exactly the amount of work (very little) and cost (free) that I'd expect. I still don't think they have an excuse for charging us over $3,000 for what the ESRB can, right now in the exact same industry climate, do for free.”