Guidance

Loot boxes in video games: update on improvements to industry-led protections

An update from the government on industry-led measures to improve player protections with regards to loot boxes in video games.

From:
Department for Culture, Media and Sport
Published
18 July 2023

Summary

1. Since the publication of the government response to the call for evidence on loot boxes in video games in July 2022, the Department for Culture, Media and Sport (DCMS) has convened a Technical Working Group of games industry representatives, tasked with improving protections for children and adults with regards to loot boxes.

2. As the output of this work, following engagement with players, parents, government departments, independent bodies, regulators, academics and external organisations, the games industry trade body UK Interactive Entertainment (Ukie) has developed and published UK games industry guidance on loot boxes. 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.

3. To meet the objective of improving the evidence base on loot boxes and video games more broadly, DCMS has collaborated with academics, industry, other government departments and Research Councils to develop a Video Games Research Framework which was published in May 2023. The government welcomes independent academic scrutiny, facilitated by the Research Framework, to assess:

  • the effectiveness of the implementation of industry-led protections

  • how widely these protections are being adopted across the sector; and

  • more broadly, how best to ensure player safety with regards to loot boxes

Government response on loot boxes in video games

4. Loot boxes are features in some video games that are part of a wider market for in-game purchases. They contain apparently randomised 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 concern on loot boxes has drawn comparisons with gambling products, and the risk of harm for children and adults.

5. The government undertook an extensive call for evidence on loot boxes, and published its response in July 2022. This found an association between loot box purchases and problem gambling, but evidence has not established whether a causal relationship exists. In response the government set out its view that:

  • purchases of loot boxes should be unavailable to all children and young people unless and until they are enabled by a parent or guardian

  • all players should have access to, and be aware of, spending controls and transparent information to support safe and responsible gameplay

  • better evidence and research, enabled by improved access to data, should be developed to inform future policy making on loot boxes and video games more broadly

6. Since then, the government has facilitated engagement between the games industry and players, parents, government departments, independent bodies, regulators, academics and other external organisations to pursue these objectives. The output of this work is:

  • new industry-led guidance on loot boxes which has been published by the industry trade body Ukie

  • a Video Games Research Framework which has been published by DCMS

Industry guidance on loot boxes

7. To address the issues set out in the government response on loot boxes, DCMS convened a Technical Working Group with representatives of games companies and platforms, tasked with improving protections for children and adults. Its output is industry-led guidance on paid loot boxes, coordinated by the trade body Ukie which was published on 18 July 2023.

8. The Technical Working Group met eight times between September 2022 and June 2023, including a meeting chaired by the DCMS Secretary of State in June 2023. Academics, the Games Ratings Authority (GRA) (formerly known as the Video Standards Council), the Information Commissioner’s Office (ICO) and the Competition and Markets Authority (CMA) participated in the Technical Working Group. To support this work, DCMS and the GRA convened a Players and Parents Panel which met three times between December 2022 and March 2023 to facilitate feedback on the industry-led proposals with regards to loot boxes. In addition, DCMS facilitated engagement with academics and consumer groups to provide feedback to Ukie on its draft guidance.

9. We are grateful for the range of companies, platforms and trade bodies who participated in the Technical Working Group (see Annex A), but note that its reach does not cover the entire games sector operating in the UK. We also note that when referring to the ‘games industry’ there are different views and approaches with regards to loot boxes. This includes many companies operating in the UK who do not deploy loot boxes in their games, and platforms and games that already adopt many of the measures set out in the new industry guidance.

10. The government is providing its view of the new industry guidance on loot boxes, in light of the conclusions and next steps set out in the government response (paragraph 5), and the engagement set out above (paragraph 8) which has included feedback to Ukie on the draft guidance.

11. We appreciate the complexity, dynamism and fast changing nature of the games sector which is one of the reasons why we have pursued an industry-led approach to improve protections for players. However, we are also of the view that this plurality should not result in a ‘lowest common denominator’ approach that does not lead to meaningful improvements across the sector.

12. We welcome the clear commitment in the new industry guidance to use technological controls to restrict anyone under the age of 18 from acquiring a paid loot box without the consent or knowledge of a parent or guardian. As part of implementing its guidance, we call on industry to increase and monitor the uptake of parental controls, and to ensure widespread adoption of current best practice of default £0 spending limits on child accounts (applying both to loot boxes and other in-game purchases).

13. Effective parental controls need to be underpinned by improved age assurance, which reduces the reliance on self-declaration. We welcome the commitment to improve age assurance, and our view is that games companies and platforms have the opportunity to be at the forefront of adopting and implementing age assurance technologies. This includes voluntarily adopting technologies that will be driven by the implementation of the Online Safety Bill. As part of implementing the new industry guidance, we want to see how the outputs of a new industry panel on age assurance translate into improved industry practice.

14. We recognise that, even with these improvements, parental controls and age assurance technologies may not always prevent children from purchasing loot boxes without prior parental consent. Refunds are therefore an important ‘backstop’ to further mitigate the risk of financial harms which may be associated with loot boxes. We welcome the commitment to fair and lenient refund policies, and importantly, that these policies are communicated to players and parents. As part of implementing the industry guidance, we want parents and guardians to be reassured that where parental controls and age assurance technologies do not prevent children from purchasing loot boxes without parental / guardian consent, lenient refunds are available and will be applied.

Spending controls and transparent information for all players

15. Consumer law requires that businesses do not act unfairly when dealing with consumers. A key concept across several pieces of consumer law is that individuals can make informed choices about their purchases, which requires that traders are meaningfully transparent about what they are offering. These requirements apply both to the purchase and / or use of games but also to economic decisions taken in-game, for example the purchase and use of in-game currency which can be purchased with real-world money.

16. In light of requirements of consumer law, and informed by engagement with the CMA, the government welcomes industry commitments to ‘design and present paid loot boxes in a manner that is easily understandable to players, and which promotes fair and responsible play’ and ‘give clear probability disclosures’. As part of implementing the guidance, the government wants industry to make sure that adult players and parents / guardians are able to make informed choices with regards to the purchases of loot boxes. This should include communicating to players in a clear and transparent way how their data is being used to inform loot box probabilities. Building on measures set out in the guidance, we want industry to strengthen and develop more specificity on what ‘good’ looks like to better support the minority of adult players who spend a disproportionately high amount of money on loot boxes.

17. The ICO is responsible for upholding data protection law, and its Children’s code explains the specific obligations for games companies and platforms whose games are likely to be accessed by children. We welcome that the new industry guidance sets out key obligations with regards to loot boxes such as: the best interests of the child should be the primary consideration of the development of online services; not using children’s data in a way that is detrimental to their wellbeing; taking a risk based approach to recognising the age of individual users. As part of implementing the guidance, industry must ensure conformance with ICO guidance on the Children’s code.

18. Spending controls and transparent information need to be underpinned by effective games industry communications with all players. We welcome that Ukie is ready to launch its £1 million public information campaign on safe and responsible play. In delivering this campaign, the government wants industry to work with players, parents and external partners to ensure that information is balanced, and includes recognition of the risk of harms associated with loot boxes. In other words, if parents and players don’t understand the ‘problem’ and risks associated with loot boxes, it will be harder to have meaningful and informed engagement on solutions and protections.

Implementation and next steps

19. 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 authorities to adopt and implement the guidance in full, and continue to improve protections for players. We want industry, coordinated by Ukie, to report back to DCMS on the extent to which this guidance has been implemented, and on steps that have been taken in areas identified for further work, such as the outputs of the panel on age assurance.

20. The government recognises the technical capability and creativity of the games sector and its capacity to make brilliant games that are enjoyed by players of all ages. We want to see this technical ability and creativity channelled into ensuring robust protections for players and parents. Ultimately, it is the experience of players and parents that matters the most to ensure that games can be enjoyed safely. In that context, we welcome the industry commitment to work with the government and other relevant stakeholders to measure the effectiveness of this guidance, with a 12-month implementation period.

21. The government response to the call for evidence identified limitations in the evidence base with regards to video games and loot boxes specifically. That is why DCMS has collaborated with academics, industry, other government departments and Research Councils to develop a Video Games Research Framework which was published in May 2023, and launched at an academic conference at the University of York in June 2023. We are thankful for the extensive input from academics in particular on the development of the Framework, and we welcome the industry commitment to support the implementation of the Framework. We want to see independent research and academic scrutiny of the implementation of these industry-led measures in line with the principles of inclusivity, openness and transparency that are set out in the Framework.

22. The government understands there are a wide range of views on what an appropriate and proportionate response should be to mitigate the risk of harms associated with loot boxes. We appreciate that some players, parents, organisations and parliamentarians will be disappointed that we are not taking forward legislation at this time to restrict children’s access to loot boxes. As set out in the government response, our view is that an industry-led approach, at least in the first instance, avoids the risk of unintended consequences that may be associated with legislation. Industry-led measures remain more adaptable and able to keep pace with a dynamic environment for loot boxes and in-game purchases.

23. We will continue to keep our position on possible future legislative options under review, informed by the effectiveness of the implementation of industry-led measures, and independent scrutiny of risks and protections with regards to loot boxes and video games. We will also continue to monitor developments in legislative and industry-led measures in other international jurisdictions.

24. The government will provide further updates on industry-led protections in due course, following the 12-month implementation period for this new industry guidance, and independent scrutiny of its efficacy.

Department for Culture, Media and Sport

July 2023

Annex A: Technical Working Group membership

  • DCMS
  • Ukie
  • The Independent Games Developers’ Association (TIGA)
  • Games Rating Authority
  • Take-Two Interactive
  • Electronic Arts
  • Mobile Games Intelligence
  • Jagex
  • Microsoft
  • Sony
  • Ubisoft
  • Nintendo
  • Activision Blizzard King
  • Apple
  • Google
  • Hutch Games
  • Lego
Published 18 July 2023
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