Tiga say the EU proposal could make developers 'overly cautious'
The future of games development has been called into question after the EU Commission suggested developers provide a two year guarantee.
Commissioners Viviane Reding and Meglena Kuneva want to expand the EU Sales and Guarantees Directive.
Dr Richard Wilson, head of the video games developers' association Tiga, said a balance between consumers and developers was needed.
"They have to be careful not to stifle new ideas," he told the BBC.
"Consumers need good quality products - that is only reasonable - but if the legislation is too heavy-handed it could make publishers and developers very cautious.
At present, licensed software is exempt from EU legislation that forces firms to offer "a minimum 2-year guarantee on tangible movable consumer goods".
"Games takes years to develop and software teams often have to predict what new technology will be in place when the game is actually finished," said Dr Wilson.
"If there is an onus on developers to have software that is 'near perfect' then it could stifle new ideas as people could end up just playing it safe," he said.
Meglena Kuneva is the European commissioner for consumer protection
Helen Kearns, spokesperson for Meglena Kuneva, said the commissioners wanted to kick start a dialogue with the software industry.
"The current status quo, where licensed products are exempt from EU law, is unsatisfactory," she said.
At present, retailers are not obliged to give a refund on a video game that has a bug or glitch that prevents a user completing a game. If the proposals become law, this could change as users would have the right "to get a product that works with fair commercial conditions".
Ms Kearns accepted that this assumes honesty on the part of users and that the system could be abused by people playing the game for a few weeks and then taking it back with a fraudulent fault.
"On the one hand there is the risk of abuse, but on the other it's not a good enough reason to say basic consumer protection should not apply."
The Business Software Alliance, which represents many software firms, including Apple and Microsoft, said the proposals - in their current form - would not work.
In a written statement for the BBC, the BSA's director of public policy - Francisco Mingorance, said:
"Digital content is not a tangible good and should not be subject to the same liability rules as toasters. It is contractually licensed to consumers and not sold.
"These contracts are governed by civil law that provide consumers with multitude of remedies for breach of contract. We are not aware of any shortcomings of the legal frameworks with respect to digital content."
The proposals would also see an end to regional license agreements for software sold within the EU and "end the fragmentation of laws on 'private copying'".