Games News

Call to regulate video game loot boxes under gambling law and ban their sale to children among measures needed to protect players, say MPs. Lack of honesty and transparency reported among representatives of some games and social media companies in giving evidence.

The wide-ranging report calls upon games companies to accept responsibility for addictive gaming disorders, protect their players from potential harms due to excessive play-time and spending, and along with social media companies introduce more effective age verification tools for users.

The immersive and addictive technologies inquiry investigated how games companies operate across a range of social media platforms and other technologies, generating vast amounts of user data and operating business models that maximise player engagement in a lucrative and growing global industry.

Sale of loot boxes to children should be banned Government should regulate loot boxes under the Gambling Act Games industry must face up to responsibilities to protect players from potential harms Industry levy to support independent research on long-term effects of gaming Serious concern at lack of effective system to keep children off age-restricted platforms and games

MPs on the Committee have previously called for a new Online Harms regulator to hold social media platforms accountable for content or activity that harms individual users. They say the new regulator should also be empowered to gather data and take action regarding addictive games design from companies and behaviour from consumers. E-sports, competitive games played to an online audience, should adopt and enforce the same duty of care practices enshrined in physical sports. Finally, the MPs say social media platforms must have clear procedures to take down misleading deep-fake videos 203 an obligation they want to be enforced by a new Online Harms regulator.

In a first for Parliament, representatives of major games including Fortnite maker Epic Games and social media platforms Snapchat and Instagram gave evidence on the design of their games and platforms.

DCMS Committee Chair Damian Collins MP said:

Social media platforms and online games makers are locked in a relentless battle to capture ever more of people's attention, time and money. Their business models are built on this, but it's time for them to be more responsible in dealing with the harms these technologies can cause for some users.

Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the Government to explain why loot boxes should be exempt from the Gambling Act.

Gaming contributes to a global industry that generates billions in revenue. It is unacceptable that some companies with millions of users and children among them should be so ill-equipped to talk to us about the potential harm of their products.

Gaming disorder based on excessive and addictive game play has been recognised by the World Health Organisation. It's time for games companies to use the huge quantities of data they gather about their players, to do more to proactively identify vulnerable gamers.

Both games companies and the social media platforms need to establish effective age verification tools. They currently do not exist on any of the major platforms which rely on self-certification from children and adults.

Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of the Speaker of the US House of Representatives, Nancy Pelosi.

Regulate 'loot boxes' under the Gambling Act:

Loot box mechanics were found to be integral to major games companies' revenues, with further evidence that they facilitated profits from problem gamblers. The Report found current gambling legislation that excludes loot boxes because they do not meet the regulatory definition failed to adequately reflect people's real-world experiences of spending in games. Loot boxes that can be bought with real-world money and do not reveal their contents in advance should be considered games of chance played for money's worth and regulated by the Gambling Act.

Evidence from gamers highlighted the loot box mechanics in Electronic Arts's FIFA series with one gamer disclosing spending of up to £1000 a year.

The Report calls for loot boxes that contain the element of chance not to be sold to children playing games and instead be earned through in-game credits. In the absence of research on potential harms caused by exposing children to gambling, it calls for the precautionary principle to apply. In addition, better labelling should ensure that games containing loot boxes carry parental advisories or descriptors outlining that they feature gambling content.

• The Government should bring forward regulations under section 6 of the Gambling Act 2005 in the next parliamentary session to specify that loot boxes are a game of chance. If it determines not to regulate loot boxes under the Act at this time, the Government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money's worth.

• UK Government should advise PEGI to apply the existing 'gambling' content labelling, and corresponding age limits, to games containing loot boxes that can be purchased for real-world money and do not reveal their contents before purchase.

Safeguarding younger players:

With three-quarters of those aged 5 to 15 playing online games, MPs express serious concern at the lack of an effective system to keep children off age-restricted platforms and games. Evidence received highlighted challenges with age verification and suggested that some companies are not enforcing age restrictions effectively.

Legislation may be needed to protect children from playing games that are not appropriate for their age. The Report identifies inconsistencies in age-ratings stemming from the games industry's self-regulation around the distribution of games. For example, online games are not subject to a legally enforceable age-rating system and voluntary ratings are used instead. Games companies should not assume that the responsibility to enforce age-ratings applies exclusively to the main delivery platforms: all companies and platforms that are making games available online should uphold the highest standards of enforcing age-ratings.

Loot boxes in video games have come under fire as method of monetising games. Complainers have attacked them as if they were casino gambling, surely an unjust accusation but nevertheless loot boxes can be a rather ruthless way to extract money.

Now the films censors of New Zealand's OFLC are reporting on an evolution towards fairer monetisation methods. The OFLC  speaks about developments in a blog post:

You don't know what you are paying for and if you don't get the item you want then you can end of buying a bunch of them.

People have been getting pretty annoyed about this for a while and pressure built up . In early August, a group of companies that make game consoles announced a policy where they will only allow games that show players their chances of getting items from loot boxes . This chance is commonly called a drop rate by those who talk about video games, as it is the rate at which items will drop. The announcement means that, all things going to plan, games that are published on the PlayStation, Xbox, and Switch will show drop rates from 2020 onwards.

Since the announcement last week, a few game developers have begun removing loot boxes from their games entirely . Their solution is to replace loot boxes with boxes where players can see what is in them. Last week, popular game Apex Legends removed loot boxes less than a week after adding them in.

Players generally view the policy announcement as a positive step forward, although some commentators have pointed out that showing the drop rate doesn't change the dodgy nature of loot boxes, as they are still based entirely on random chance.

The policy appears to be based off regulations that were in place in China until recently, which also required games to show drop rates. Since then, Chinese regulations have intensified, placing limits on how many loot boxes players can open in a day and making games increase the drop rate with each box opened. These regulations have proven effective in giving developers pause. Insiders now recommend moving away from loot box mechanics altogether in the Chinese market .

The fact that China felt the need to strengthen its regulations lends credence to the fact that simply showing players drop rates may not fully manage concerns around loot boxes.

More troubling is the revelation that game publishers previously offered to increase drop rates for people whom they paid to open loot boxes on video. By changing the drop rates, viewers are given an inflated idea of what they are likely to get from loot boxes. This suggestion of false advertising taps into why a lot of players dislike loot boxes and think that they are exploitative and anti-consumer.

These changes show that the industry is starting to solidify a focused strategy in order to deal with the potential harms from loot boxes. The space remains fast-moving. I will do my best to keep on top of it and let you know about more developments as they arise.