In 2020, Defence simulation software firm BiSim won a £1m contract with the British Army to pilot virtual reality for training exercises. Credit: BiSim.

Given the maturity level of virtual reality, any vigorous attempt to regulate runs the risk of stifling the evolution of the technology. As a result, most regulators are taking a wait-and-see approach.

Listed below are the key regulatory trends impacting the virtual reality industry, as identified by GlobalData.

China

Around the world, regulators are concerned about the societal harm that can result from addiction to video games, especially amongst children. Chinese regulators – who oversee the world’s biggest gaming market – froze the approval of new domestic online game licenses in late March 2018. Subsequently, in 2019, China imposed a ban on games that feature blood or corpses. Although the impact of this new rule on the Chinese VR industry is yet unknown, the developers of popular first-person shooter VR games, like The Brookhaven Experiment, Serious Sam VR, and Resident Evil 7 VR, risk losing ground in China. Game developers will need to reintroduce censored versions of the titles to avoid legal risks.

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However, China’s desire to dominate the global VR market leads us to believe that regulators will not attempt to stifle the industry with heavy-handed regulation. Age restrictions to access VR games are likely to emerge in the coming years. HTC, which dominates the Chinese arcades market, will likely revamp its Viveport Arcade portal to comply with regulations.

Virtual reality self-regulation

US-based VR companies have created their own ethical guidelines to protect businesses from outside interference. The XR Association, previously known as the Global Virtual Reality Association (GVRA), which includes Google, HTC, Oculus, Samsung, Sony, and Acer, promotes the growth of immersive technologies through the development and sharing of best practices for the immersive tech industry.

Data privacy

In a survey of industry professionals by Perkins Coie and the XR Association, 61% identified consumer privacy and data security as a legal risk when developing immersive technologies. The survey also highlighted how companies are addressing data privacy issues, with 47% of respondents stating that they had updated privacy policies and disclosures regarding consumer data, while 42% had improved data security measures to mitigate the risks of a breach, and 40% said they had limited the amount of data collected from users. The growing awareness of the need to protect user data can be seen as an impact of regulations such as Europe’s General Data Protection Regulation (GDPR), Japan’s Act on the Protection of Personal Information (APPI), and California’s Consumer Privacy Act (CPA).

Adopting an extraterritorial approach, GDPR and APPI necessitate companies to process locally generated data, especially biometrics, within the region itself, irrespective of their base stations. The regulations also mandate companies to have transparent privacy policies in place. As a result, new privacy policies from Facebook and HTC make it clear that user data is stored on the devices themselves and that they do not share information such as credit card details with affiliate third parties for security reasons.

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As guided by regulators, the companies must also equip users with features to request, access, correct, and suspend their personal data from privacy centres. Facebook has also updated the Oculus code of conduct, which prevents users from promoting or accessing illegal, abusive, and explicit content.

This is an edited extract from the Virtual Reality in Aerospace and Defense – Thematic Research report produced by GlobalData Thematic Research.