The time spent on video games soared by 40% during the pandemic, as a similar percentage of the world’s population is now reported to play them. Since many new players were attracted to gaming as something to do during the crisis, gaming hours are expected to stay at 21% above pre-crisis levels in future years.
For millions of people, gaming provides hours of harmless fun, and much of it is educational. However, they also face numerous risks, such as online abuse, exposure to violent content, and gaming addiction. Within the industry itself, employees of gaming companies face sustainability issues that include excessive overtime and a lack of diversity among the workforce.
In 2021, Robeco’s Active Ownership team started an engagement program focused on the social risks for companies operating in the video game industry. Six topics were identified: four are linked to risks associated with the use of gaming products, especially by children who are the most vulnerable group of users. Two engagement objectives will focus on the gaming companies’ human capital management and stakeholder management.
“In-game harassment may harm people’s well-being and put individual gamers off,” says Engagement Specialist Daniëlle Essink. “Therefore, gaming companies should minimize the risks of misbehavior.”
“Gamers should also be able to take action against toxicity, such as by using a private profile, or having the ability to block, ignore, or mute someone in the game. They should also be able to make a complaint or flag misbehavior through a system of user reporting.”
“Beyond gamer intervention, companies should have human or automated content moderation, including a text chat filter. Lastly, it is important to share knowledge and cooperate via platforms such as the Fair Play Alliance, an initiative to create healthy online gaming communities.”
Becoming addicted to the games is an age-old problem that many parents will understand when trying to get their children to stop playing them for hours on end. It can also lead to people getting into debt from repeatedly buying in-game features, some of which must be purchased in order for the game to continue.
“It is undesirable that gamers become exclusively interested in gaming at the cost of other aspects of their lives,” says Essink. “Gaming addiction can lead to both health and financial risks.”
“These risks can be minimized if players are able to manage both their online spending and gaming time. When it comes to time management, this can be done for instance by showing warning messages about risk of overuse (as occurs in World of Warcraft), or by inserting reminders for breaks or ‘cooling off’ periods.”
“Similarly, gamers should be prevented getting into debt due to excessive purchases of in-game features by being made aware of how much they are spending. Gaming companies should find a balance in this part of their business model. From the outset, they are encouraged to disclose in their policies what in-game monetization mechanisms are not acceptable.”
The diversity of in-game characters – many of whom follow the ‘white male warrior’ stereotype – is another issue. “Games should ideally represent a cross-section of society,” says Essink. “Gaming companies have the ability to implement strategies that embed diversity in the gaming environments they create.”
“Game narratives can be made inclusive through representation of different groups, with representative characteristics and non-stereotypical characters. It also helps if feedback loops are integrated into the development process. The development of specific tools for analyzing characters' diversity is also a good way to look at such issues.”
“Besides using published industry ratings and age verification, we ask companies to commit to a higher-level reflection during the game development process,” she says. “Questions might relate to the proportionality of violence, the targets of violence, good versus bad militaries, and the type of weapons used.”
Within the companies, two sustainability issues are excessive amounts of overtime, known as ‘crunch’, and a lack of diversity among game company employees. “Excessive overtime work for longer periods is a practice endemic in the gaming industry and commonly observed around the release of a new game or feature,” says Essink.
“We ask companies to carefully reflect on their product expectations, such as over-specification, their approach to design, under-staffing and planning, and the working culture in the firm. We encourage companies to take a public stance on the question of work life balance, and to have that supported and verified through, for example, employee engagement surveys.”
“We note that involvement in initiatives and programs towards diversity and an inclusive culture are increasing in the gaming sector. We expect companies to adopt a clear diversity and inclusion policy laying out their position on the topic.”
Finally, gaming companies are expected to report at least annually on their progress around sustainability issues. “We are also interested in the way ESG issues and reporting are being managed and overseen within the company, and how responsibility for ESG is embedded in the board structure,” says Essink.
“In addition, we welcome transparency about the dialogue that is being conducted with stakeholders and the board’s receptivity to external input – by way of initiatives, cooperation or partnerships. In our review, stakeholder management also includes the consideration of company activity related to lobbying and regulation.”
The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).
This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor. Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States.
This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.