UK Government demands games companies protect children from loot boxes, but stops short of legislation

The UK Government has today told the games industry it must take action on loot boxes, or risk future legislation.

In particular, it says children and young people should not be able to buy loot boxes without parental consent. However, it's allowing the games industry to regulate itself for now.

The Department for Digital, Culture, Media and Sport (DCMS) launched a call for evidence on loot boxes in 2020, and found that players who purchase loot boxes are "more likely to experience gambling, mental health, financial and problem gaming-related harms". But it did not explicitly conclude that loot boxes are the same as gambling.

As a result, it will not be making changes to the Gambling Act. It said in the report: “Changing the Gambling Act with regards to loot boxes would have significant implementation challenges and risks of unintended consequences”. It also stated that the costs of doing so would be high.

Loot boxes are a type of in-game item that features a randomised set of items and power ups that players can use in their game. These loot boxes are typically obtained by in-game currency, which can either be unlocked during the game or bought with real money.

The most popular loot box game in the UK is the football title FIFA, which features a mode called Ultimate Team where players can buy 'packs' of players and other items in order to build their dream football team.

The UK Government says these loot boxes should not be available to children and young people unless they are approved by a parent or guardian. In a release, the DCMS cited Xbox's measures that allow parents to prevent under-18s from spending money within games. It says the Government wants stronger protections from across the entire industry and "will not hesitate to consider legislation if companies do not bring in sufficient measures to keep players safe".

In addition, the DCMS has called for measures that support those players who spend a disproportionate amount of money on loot boxes. A new working group will be formed featuring games companies and regulatory bodies to develop 'industry-led measures', that could include additional parental controls and making sure transparent information is available to players.

An extensive 90-page report on loot boxes issues other recommendations, such as letting players know that loot boxes are not essential and do not guarantee success. It also recommended the inclusion of messages when players have exceeded a set number of purchases, and advises them to pause spending. It also suggested 'generous refund policies', allowing players to track and view their spending, and having trained staff to deal with players suffering loot box-related issues.

Finally, the Government said that there is a need for better evidence to understand the positive and negative impacts of video games and has launched the Video Games Research Framework to enable this.

The DCMS' own call for evidence showed that research is still in its early stages. Meanwhile, its own consumer research was 'self-selecting' and therefore not truly representative of the player base. However, there were some key statistics from the research. Including that 32% of gamers were not aware of probability rates for games (with 38% 'sometimes aware'), while 34% of gamers said they were unaware of PEGI in-game purchase and 'paid random items' labels. 57% of gamers said they had breached their personal restrictions on loot box spend. Finally, 63% of 16+ gamers, and 70% of adults responsible for a child or young person, expressed negative sentiment towards loot boxes.

“We want to stop children going on spending sprees online without parental consent, spurred on by in-game purchases like loot boxes," said Culture Secretary Nadine Dorries.

“Games companies and platforms need to do more to ensure that controls and age-restrictions are applied so that players are protected from the risk of gambling harms. Children should be free to enjoy gaming safely, whilst giving parents and guardians the peace of mind they need.”

"Games companies and platforms need to do more to ensure that controls and age-restrictions are applied so that players are protected from the risk of gambling harms. Children should be free to enjoy gaming safely, whilst giving parents and guardians the peace of mind they need."

UKIE CEO Dr Jo Twist OBE added: "As a responsible industry, we have committed to exploring additional ways to support players and parents to build on our existing work developing and raising awareness of parental controls.

"We look forward to engaging closely with the Government and other organisations in the working group and on the Video Games Research Framework."

And TIGA CEO Dr Richard Wilson continued: "TIGA believes that games businesses should aim to ensure that games are safe to use for all players. In 2020, TIGA formally adopted its 5 Principles for Safeguarding Players, designed to embody the spirit of the approach that games companies should adopt in operating their businesses within the UK. Children and young people should not be able to buy loot boxes in video games without parental consent. TIGA also believes that vulnerable adults need to be protected against potential harms arising from loot boxes. TIGA looks forward to contributing to the DCMS's planned working group to advance measures to protect players from potential harms.”

More to follow as the full call for evidence is made available.