HomeInsightsGovernment publishes response to its call for evidence on loot boxes in video games

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The call for evidence launched in September 2020 sought to understand the use and impact of loot boxes in video games in the UK. It consisted of a player survey, which received over 32,000 responses from players and parents of children and young people who play games, and 50 submissions from the games industry, researchers, third sector organisations, and other organisations and individuals. In addition, DCMS commissioned an independent rapid evidence assessment of literature and empirical studies on loot boxes, which was conducted by InGAME and has been published alongside the government response.

Whilst the response to the player survey was not representative of the UK gaming population, the Government says that it has provided a valuable insight into the perspectives of many players, and parents of children, who play video games. Nearly all players who responded to the survey said they had opened a loot box (98%).

The evidence that the Government has considered, including the InGAME rapid evidence assessment, has identified a range of potential harms associated with the purchase of loot boxes. This includes harms which have been associated with gambling, but also a range of other potential mental health, financial and problem gaming-related harms. The evidence suggests that the risks of harm are likely to be higher for children and young people.

In terms of gambling-related harm, the InGAME rapid evidence assessment found 15 peer reviewed empirical studies that identified a stable and consistent association between loot box use and problem gambling. The Government says that there is also emerging evidence of a dose-response relationship, where greater loot box spending is related to greater problem gambling severity. However, there are a range of plausible explanations that could underpin this association between loot box spending and problem gambling behaviours, and research has not established whether a causal relationship exists.

In terms of regulation, video games companies and platforms are subject to consumer protection obligations. Games companies and platforms have also introduced protections and measures for consumers with regards to loot boxes and in-game spending, which have continued to develop in recent years, such as parental controls and information.

In response to the findings, the Government wants to see improved protections with regards to loot boxes, and to support better longer-term research into the impacts of video games. To achieve this, the Government’s view is 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 gaming; and
  • 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.

The Government has considered three broad types of responses that could be pursued:

  1. improved industry-led protections by games companies and platforms: the Government says that there is more that can and should be done across games platforms and publishers to mitigate the risk of harm from loot boxes; the Government believes that games companies and platforms have the technical expertise and capability to develop and improve protections and 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 would be adaptable, and may be more able to keep pace with a fast-changing environment for in-game purchases in comparison to legislative options; the Government welcomes the commitment from Ukie to explore practical ways of ensuring that loot boxes are not available to all children and young people unless enabled by a parent or guarding and calls on the wider games industry to ensure that active and informed parental choice supports how children and young people engage with video games; games companies and platforms should take steps to strengthen age assurance and reduce reliance on self-declaration; all players should have access to and be aware of spending controls and transparent information to support safe and responsible gaming; the Government expects games companies and platforms to do this; they must also ensure that protections specifically support the minority of players who spend a disproportionately large amount of money on loot boxes, and may therefore be at greater risk of experiencing financial harm; DCMS will convene a technical working group to pursue enhanced industry-led measures to mitigate the risk of harms from loot boxes; the overall view is that it would be premature to pursue legislation without first pursuing enhanced industry-led protections; however, the Government says that if games companies and platforms do not improve protections, with results being seen in the near future, it will not hesitate to consider legislative options; it will provide an update on the output of the technical working group and progress made to strengthen industry-led measures, by the first quarter of 2023;
  2. regulation under the Gambling Act: the Government does not intend to amend or extend the scope of gambling regulation to cover loot boxes; it considered regulating loot boxes as “gambling” and concluded that it would come with significant limitations; while many loot boxes share some similarities with traditional gambling products, the ability to legitimately cash out rewards is an important distinction; in addition, changing the Gambling Act would have significant implementation challenges and risks of unintended consequences, e.g., it would require substantial changes to the gambling tax system, would dramatically increase the scope and costs of running the Gambling Commission, and it could risk capturing other unintended aspects of video games or activities outside of video games with a random reward mechanism; and
  3. other statutory consumer protections: the Government’s view is that the UK’s current consumer and data protection legislation and guidance provides a strong foundation for mitigating the risks of harms associated with loot boxes; further legislative change may risk unintended consequences, e.g., legislation to introduce an outright ban on children purchasing loot boxes could have the unintended effect of more children using adult accounts, and thus having more limited parental oversight of their play and spending; the Government will continue to keep this position under review and will not hesitate to consider legislative options, if it deems it necessary.

Finally, the call for evidence found limitations in the evidence base regarding loot boxes. Accordingly, the Government says that it will launch a Video Games Research Framework to support better research, enabled by improved access to data, on the positive and negative impacts of video games. To access the full consultation outcome, click here. To read the Government’s press release, click here.