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DCMS has published an “update on industry-led improvements and protections” related to loot box interactions/exchanges on video games.
The guidance corresponds to the Technical Working Group (TWG) formed by DCMS, following a call-for-evidence consultation response issued in July 2022. The group was tasked with the primary focus of “improving protections for children and adults with regards to loot boxes”.
Prior to the formation of the TWG, the government had outlined that a review of loot box rules would form part of the Gambling Review announced in December 2019. However, the mandate was later transferred to an ‘industry consultation’.
The work and research of the TWG was led by industry trade body UK Interactive Entertainment (Ukie) and featured the input and feedback of leading video games developers Take2, EA, Ubisoft and Activision. Furthermore, the group took further responses from tech giants Microsoft, Google, Apple and Nintendo, amongst others.
New guidance and recommendations form part of DCMS’ ‘extensive call for evidence’ on loot boxes, which began with its publishing of the ‘Video Games Research Framework’ in May.
A DCMS statement read: “The government welcomes this guidance which, if fully implemented, has the potential to enhance player protections in line with the objectives set out in the government response.
“We are now calling on the games industry to work closely with players, parents, academics, consumer groups and government bodies to adopt and implement the guidance in full and continue to improve protections for players.”
In its summary, DCMS acknowledged the requirement for an improved interpretation of Loot Box mechanisms as “features in some video games that are part of a wider market for in-game purchases”.
It added: “They contain apparently randomised (sic) items in which the player does not know what they are going to get until they have opened the loot box. They may be purchased with money (including via virtual currencies) or accessed via gameplay.”
DCMS also acknowledged public concerns that loot box interactions can draw similar comparisons with gambling products/play and, as such, can become a risk to children and vulnerable adults.
From a technical standpoint, the TWG’s focus has been on implementing tech-led controls that prevent individuals under 18 from acquiring a paid loot box without parental or guardian consent or knowledge.
However, the group highlighted the limitations of parental controls in video games “as only as effective as the underlying age verification process”. Game developers and platform providers have been urged, therefore, to adopt enhanced age-verification solutions to ensure the use of loot boxes for all users.
Video developers and platforms have been encouraged to adopt ‘lenient refund policies’ on loot boxes to provide a safety net to mitigate potential financial harms.
The updated guidance encourages better spending controls and by providing transparent information for all players. As such, video games need to ensure a “fair play principle, the guidance advocates for designing and presenting paid loot boxes in an easily understandable manner”.
The industry is also urged to disclose probability information transparently, allowing players to make informed decisions about their purchases.
Additionally, the new guidance aligns with the Children’s Code requirements under the Information Commissioner’s Office (ICO). This alignment includes key obligations related to loot boxes.
Children’s best interests must be a primary consideration during the development of online services, while children’s data should not be used in a way that is detrimental to their wellbeing. A risk-based approach should also be applied to recognise the age of individual users.
As the industry coordinator, the government expects Ukie to report back to the DCMS about the implementation of this guidance and any developments in areas identified for further work. This initiative is underpinned by the industry’s commitment to measure the effectiveness of these new guidelines, granting a 12-month implementation period.
DCMS recognised that some “factions may argue for legislative intervention”. However, it believes that an industry-led approach is better suited for now, as it is more adaptable and can keep pace with the dynamic environment of loot boxes and in-game purchases.
The effectiveness of these industry-led measures and independent scrutiny of risks and protections will guide any future decision on possible legislative options. DCMS and government recognise the importance of and economic contribution of the multi-billion-pound video games sector, with many developers based in the UK.
The DCMS will provide further updates on the progress of these industry-led measures after the 12-month implementation period and following independent scrutiny of its efficacy in which “the ultimate goal is to create a gaming environment where players can safely enjoy their gaming experiences”.
