DCMS guidance calls on gaming industry to prevent loot box harm

The UK government’s regulatory stance on video game loot boxes has been clarified following an “update on industry-led improvements and protections” from the DCMS

The updated guidance falls in line with the Technical Working Group – formed by DCMS – following a call-for-evidence consultation response on the topic of loot boxes, issued in July 2022. 

From this consultation, the group was challenged with “improving protections for children and adults with regards to loot boxes”, as the common video game element is continuously compared to gambling. 

In December 2019, the government announced that a review of loot box regulations would form part of the Gambling Act review, yet the issue was later transferred to an ‘industry consultation’. 

Backed by input and feedback from some of the video game industry’s leading developers in Take2, EA, Ubisoft and Activision, the TWG was led by industry trade body UK Interactive Entertainment to analyse the impact of loot boxes. 

The group also took responses from giant tech companies such as Microsoft, Google, Apple, Nintendo and more. 

The DCMS’ “extensive call for evidence” on loot boxes has now been supported with new guidance and recommendations, building on the Video Games Research Framework published by the department in May. 

A statement from the DCMS explained: “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.”

Additionally, the DCMS acknowledged the need for an improved and updated interpretation of loot boxes, referring to the mechanisms such as “features in some video games that are part of a wider market for in-game purchases”. 

The summary 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.”

Public concerns that engaging with loot boxes can draw similarities to gambling, therefore making them a potential risk for children as well as vulnerable adults. 

With a focus to prevent the potential harm from loot boxes, the TWG has aimed to implement tech-led controls that prevent anyone under 18 from purchasing loot boxes without a guardian’s consent. 

Commenting on the proposed guidance, gambling harm consultancy EPIC Risk Management took to Twitter, stating: “Though we still call for no U18s to be able to access loot boxes, we welcome the step in the right direction with new restrictions and greater education proposed.”

Although this could suppress the damage caused by loot box mechanisms, the TWG suggested that parental controls are “only as effective as the underlying age verification process”. 

This led to video game developers and platform providers being urged to take on advanced age verification solutions to ensure a safer use of loot boxes across their products. 

In addition, developers and platforms have been probed to adopt “lenient refund policies” to allow for a safety net that could reduce potential financial harms. 

The guidance also encouraged the video game industry to provide better spending controls and transparency in disclosing probability information, as the group urged companies to ensure a “fair play principle, the guidance advocates for designing and presenting paid loot boxes in an easily understandable manner”. 

Moreover, the guidance meets the standards of the Children’s Code under the Information Commissioner’s Office around key obligations for loot boxes to uphold children’s best interest, protect their data and use a risk-based approach to age verification. 

As a trade body for the industry, the government expects UKIE to respond to the DCMS with feedback on the implementation of the guidance and any suggestions for further work. With this in mind, the initiative has been granted a 12-month implementation period to measure the effectiveness of the revised guidelines.

The DCMS is set to provide further updates on the implementation and progress of these measures once the 12-month implementation period comes to an end, aiming “to create a gaming environment where players can safely enjoy their gaming experiences”.