UK Government launches consultation on loot boxes

The Department of Digital Culture Media and Sport (“DCMS”) has launched a call for evidence on the impact of loot boxes in video games to help it determine whether they should be classified as gambling products. The consultation was announced in June as part of its ongoing investigation of loot boxes and comes after recommendations made in the Immersive and Addictive Technologies Report published last year (which you can read more about here).

A loot box is a blind box of assorted virtual items that can either be earned by naturally playing through a videogame, purchased using in-game currency or purchased with real-world currency. The items contained in these boxes are random and range in rarity, with the odds of receiving extremely rare items being correspondingly low. Presently, in the Gambling Commission’s view, loot boxes do not fall within the legal definition of gambling and therefore cannot be regulated as such.

The Consultation

The consultation aims to provide the government with a better understanding of the loot box and in-game purchases (also known as microtransactions) market in the UK, how it operates and the suitability of current protections such as consumer regulations and, in the case of children, parental controls.

The call for evidence is split into two sets of questions targeting two different groups. The first targets video game players and adults responsible for children that play video games. The second targets video games businesses, researchers and organisations interested or affected by loot boxes in video games and invites them to share “rigorous, high-quality data and research” on the subject.

Minister for Digital and Culture, Caroline Dinenage said:

“Our valued video game industry is making good progress developing safer environments for our children to play in, such as parental controls that can be set to schedule and limit playtime But we’ve listened to parents’ concerns about loot boxes and it’s right that we fully examine and understand any evidence of the harm or links to problem gambling they can cause, so we can decide if action is needed.”

The deadline for submissions is 22 November 2020 and more information, including links to the two submission forms can be found here.

Comment

The regulation of loot boxes has been a contentious issue ever since their increasing presence in video games as an additional form of monetisation. The evidence gathered from this consultation will be pivotal in guiding loot box regulation in the UK. Loot boxes are also set to come under further scrutiny during the Government’s review of the Gambling Act 2005 later this year. In the event that loot boxes become classified as a form of gambling, video game companies will likely need to rethink both how their games are designed and marketed, particularly to children or other vulnerable groups, and how their business model for monetising their video games will need to adapt. There have already been examples of companies removing loot boxes from their titles in countries such as Belgium and the Netherlands where loot boxes do fall within the ambit of gambling legislation.