Critical Hit to Innovation: Why Competition Law Must Embrace Creativity in Gaming

This paper critically examines competition law’s current approach to innovation in the video gaming industry, arguing that its prevailing one-dimensional, outcome-focused framework – typically measured through R&D expenditure, patent activity, and content output – fails to capture the dynamics that genuinely promote competition and deliver value to gamers. It contends that the diversity, quality, and direction of innovation are equally important, and that these are best understood by accounting for the creativity and processes that underpin the sector. This is achieved by distinguishing between ‘innovation’ as the commercial implementation of novel products or methods, and ‘creativity’ as the original, often smaller, collaborative, and iterative processes that give rise to them, frequently driven by smaller competitors and users. This paper advances a ‘creativity lens’, incorporating creativity as a parameter of competition alongside traditional innovation metrics. This framework emphasises the openness, autonomy, and diversity of the creative processes through which games are made, modified, and distributed, prioritising the meaningful participation of users and indie studios. Applying a creativity lens to the Microsoft/Activision Blizzard merger demonstrates how an outcome-based focus overlooked harms to user creativity and indie studio innovation, particularly in the context of cloud gaming. This paper concludes that recognising creativity as a competitive factor better safeguards gamer welfare and fosters more meaningful, long-term innovation in the industry.

This working paper is a part of the "Outstanding LLM Dissertations 2025".