The UK government’s mandate for technology companies to self-regulate gambling-style loot boxes in video games has come under scrutiny as some developers, who were involved in creating industry guidelines, failed to comply with their own rules.
In the last six months, three companies, including major developer Electronic Arts (EA), faced charges from the advertising regulator for not disclosing the presence of loot boxes in their games as stipulated in the guidelines they helped establish.
Experts who filed the complaint noted numerous other breaches but only reported a few to highlight the issue to the Advertising Standards Authority (ASA).
Loot boxes are game features that allow players to spend real or virtual currency to unlock digital envelopes with random rewards like character outfits or weapons.
Despite concerns about the gambling-like risks associated with loot boxes, the Department for Digital, Culture, Media, and Sport announced in July 2022 that loot boxes would not be classified as gambling products.
Nadine Dorries, the then culture secretary, expressed concerns about regulating loot boxes due to potential unintended consequences.
Instead of direct regulation, the government established a “technical working group” which included video game and tech companies and introduced 11 principles related to loot boxes in August 2023.
One of the guidelines requires clear disclosure of paid loot boxes in game promotions.
Leon Hsiao, an expert on loot box regulation, found that the majority of game ads he analyzed violated the group’s disclosure rules despite being members of the Loot Box Working Group.
Several games, including those from EA, Hutch, and Jagex, were subject to complaints upheld by the ASA for inadequate disclosure of loot boxes.
While EA and Jagex cited human error and lack of space for disclosures, Hatch claimed misunderstanding of the advertising guidelines.
Hsiao stressed that these incidents were not isolated and suggested the industry’s self-regulation efforts were not sufficient.
Don Foster, chairman of the House of Lords’ group for Gambling Reform, called out the failure of self-regulation and urged government intervention to protect children from loot box-related harm.
The Department for Culture, Media and Sport emphasized the need for video game companies to enhance efforts in safeguarding players from loot box risks.
The UK games industry body Ukey supported the implementation of new guidelines by July 2024 to ensure player protection and promote responsible gaming.
EA affirmed their commitment to loot box disclosures and providing players with information for safe gaming practices.
Jagex and Hatch were contacted for comments by The Guardian.
Source: www.theguardian.com
