The Advertising Standards Authority (ASA) has upheld two complaints against Hutch Games, a mobile games developer, regarding the use of loot boxes in the company’s products.
Loot boxes – in-game bundles of assets that are purchased for cash, with the contents being unknown until the transaction is completed – are not illegal in UK gaming.
However, game developers are required to inform customers if loot boxes are a feature of game releases in marketing prior to purchase or download.
In Hutch Games’s case, two of the developer’s games on the app store, ‘Rebel Racing’ and “F1 Clash – Car Racing Manager’, had taglines which read ‘“in-app purchases’ and “Free – Offers In-App Purchases”.
The complaints against the pre-purchase marketing were brought forward by an academic researcher into game regulation, who challenged whether the game descriptions breached the CAP Code.
Although making it clear that in-game purchases were a feature of the apps, the exact nature of what assets could be purchased, and whether or not these were loot boxes, was not disclosed in the description.
The presence of loot boxes in video games has become a topic of debate in the UK in recent years particularly in relation to the Gambling Act review, with many reform advocates asserting that the features could normalise gambling behaviour among young consumers.
As loot boxes are purchased for cash with no idea as to what assets may be included in them, they are often assessed as a form of gambling by some campaigners.
Concerns around the products have led to regulatory and governmental assessment. In 2021, the DCMS initiated a consultation on loot boxes, receiving 30,000 responses, and in July 2023 introduced new guidelines.
Developed by DCMS’ Technical Working Group (TWG) and UK Interactive Entertainment (Ukie). the UK video game industry trade body, the guidelines encourage enhanced age-verification, spending limits and more lenient refund policies on loot boxes, among other measures.
Returning to the case of Hutch Gaming, the ASA concluded that by not disclosing the existence of loot boxes in its games, the company breached the CAP Code.
The developer has been told by the advertising watchdog that its ads must not appear again in the current form, and to ensure that future game description and marketing make it clear whether or not a game includes loot boxes.