Gaming has gained immense popularity across all age groups and risen to become the second-most profitable entertainment industry in the UK, with the value estimated at £7.05bn in 2022. Although sources estimate a 5.6% decrease YOY due to many factors, 2022 is still reportedly 17% above pre pandemic levels.
However, with this growth comes increased scrutiny, especially concerning certain in-game mechanics known as “loot boxes”.
For those unfamiliar with the term, loot boxes are virtual items that players can purchase either with real-world money or in-game currency. These boxes contain random rewards, ranging from simple cosmetic items to game-changing equipment. The element of chance associated with these boxes has sparked a widespread debate, drawing attention from players, industry stakeholders, and the UK government1.
Loot boxes first emerged as a monetisation strategy in free-to-play games but have since found their way into many premium games. Their popularity among developers stems from the significant revenue they generate. However, the random nature of the rewards they offer has raised concerns. Some compare the act of purchasing a loot box to gambling, given the uncertainty about the outcome1.
The primary concern revolves around the potential harm these mechanics might inflict, especially on younger players. There’s a fear that loot boxes might encourage gambling tendencies or lead to excessive spending. The randomness of the rewards, combined with the often flashy and exciting presentation of opening a box, can be enticing, making players spend more than they initially intended2.
Moreover, there’s a lack of transparency in many games about the actual odds of obtaining specific items from these boxes. Players, especially those with limited experience, might be under the impression that they have a higher chance of receiving a rare item than they actually do2.
UK Government’s Stance
The UK government, recognising the potential risks, has taken a proactive approach. While they haven’t introduced legislation to regulate loot boxes directly, they’ve called on games companies to implement measures to protect players, particularly children1. The government’s primary objectives are twofold: restrict the ability for under 18s to purchase a loot box without parental consent and provide all players with transparent information and spending controls3.
In response to the government’s call and the broader public concern, the UK games industry, represented by bodies like Ukie, has introduced several principles and guidelines. These principles emphasise transparency, player protection, and responsible gameplay3.
For instance, there’s a push for clear probability disclosures for items in loot boxes. This means that games should clearly state the chances of obtaining specific items, ensuring players know what they’re getting into2. Additionally, there’s a move towards designing loot boxes in a manner that promotes fair and responsible play4.
Another significant initiative is the introduction of technological controls. These are tools that allow players and guardians to set spending limits, ensuring that players don’t spend beyond their means4.
Guidance on Advertising
The Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) have also weighed in, providing guidance on how in-game purchases, including loot boxes, should be advertised2. The emphasis is on preventing harm or consumer detriment. Advertisers are now required to be clear about the cost of virtual currency, especially when sold in bundles. They must also ensure that consumers are not misled about the chances of receiving a rare item, especially when multiple purchases are involved2.
The UK loot box debate is a testament to the challenges that arise when traditional regulatory frameworks, or lack thereof, meet modern digital innovations. While loot boxes offer a lucrative revenue stream for developers, they also present potential risks, especially for younger, impressionable players.
The collaborative approach taken by the UK government and the games industry is commendable. By working together, they aim to strike a balance between allowing innovation in the industry and ensuring player protection.
As players, parents, or stakeholders, it’s crucial to stay informed about these developments. The games industry is evolving, and understanding the mechanics at play, both in-game and in the broader industry context, is essential.
For those in the industry, it’s a reminder of the responsibility they hold. As the industry continues to grow, so does its impact on society. Ensuring that this impact is positive, by prioritising player welfare and promoting responsible gameplay, is not just good ethics – it’s good business.
New Principles and Guidance on Paid Loot Boxes (https://docs.google.com/document/d/1O-jQcabmO_KabLypOvsnfOQBgnJwdrGJqcPBqU_Sh1k/edit)