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UK Govt. Rules Out Loot Box Ban, But Calls for Industry Vigilance
By Jeff Osienya Jul 30, 2022 IndustryFollowing a two-year inquiry, the UK government has steered clear of an outright ban of video game loot boxes as a direct intervention on its part risks unintended consequences. The government has instead asked the industry to self-regulate.Findings from a 22-month call for evidence by the UK Department for Digital, Culture, Media, and Sport (DCMS) have linked loot boxes in video games to financial, mental health, and gambling-related harm. However, the UK government has taken a stand not to ban loot boxes but strongly urges industry players to self-regulate so that they can protect children and young people.
The DCMS decided against a blanket ban as it realized that such a move could end up doing more harm than good. According to the DCMS, if children were prohibited from purchasing loot boxes, there’s a higher risk for them to start using adult accounts with limited oversight on their playtime and spending. In a report published on the UK government’s official website, Nadine Dorries, the UK Culture Minister, said:
Quote“It is particularly important that children and young people are protected. In response to our findings, our view is that children and young people should not be able to purchase loot boxes without parental approval. In addition, all players should have access to spending controls and transparent information to support their gaming.”
The investigation began in September 2020 and featured more than 32,000 players and parents with children who play video games and 50 proposals from researchers, the games industry, third sector organizations, and other parties.
Andrew Rhodes, UK Gambling Commission CEO, pointed out that players in the gambling industry have their eyes on an entertainment-focused business model, which has seen the boundaries between gambling and non-gambling products blur. Though the move has enabled gambling operators to collect some bucks from lower-spending customers, loot boxes are not covered under the 2005 Gambling Act.
What is The Relationship Between Traditional Gambling Products and Loot Boxes?
A loot box is a feature in video games that appears as virtual crates, chests, or card packs. To get your hands on a loot box, you can either earn by playing a video game or make in-game purchases using real money without knowing what you will get. When the box is opened, it reveals items such as weapon upgrades, outfits, and a range of other gameplay enhancement items.
For example, when playing FIFA 22 Ultimate Team (FUT), getting a rare player piece highly depends on the loot box a player opens. A recent study suggested players spend around £11,500 on card packs to unlock the ‘Team of the Year’ Mbappe card.
DCMS also notes that even though there is a similarity between gambling products and loot boxes, the fact that you cannot cash out rewards from loot boxes is a clear distinction. Unlike gambling, where wins are cashed out as real money, the primary utility of a loot box is to boost your game play.
Action Plans Proposed by the UK Government
From the decision, the UK government has maintained that it is focused on ensuring the video gaming industry continues to thrive and players can enjoy games safely and responsibly. To that end, it has encouraged video gaming publishers to introduce safety measures to protect vulnerable adults and fully divulge information on the odds of getting particular items in the loot boxes.
In addition, the government is urging video gaming companies to provide transparency and spending controls to all their users. The government further calls for a focus on minority users who buy loot boxes because they are at a greater risk of experiencing signs similar to problem gambling.
Likewise, parents and guardians have also been called upon to be more watchful of how much money their children spend on purchasing loot boxes. The DCMS insists that such expenditures shouldn’t be made available to youngsters unless it is under supervision.
Support and Pushback in Equal Measure
In a statement, Dr. Jo Twist, the CEO of UK Interactive Entertainment, welcomed the proposal by DCMS, stating:
Quote“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.”
Richard Wilson, the chief executive of the Independent Game developers Association (TIGA), a non-profit organization representing the interest of video game developers in Europe and the UK, sent a statement showing support for the proposals. Through their Five Principles for Safeguarding Players approach, TIGA believes video gaming businesses should provide a safe environment for all their users.
On the other side of the coin, Dr. David Zendle, a University of New York video games expert, was not happy with the decision by DCMS. He iterated that the findings are a clear indication that bad actors in the video gaming industry cannot be left to self-regulate. He said in part:
Quote“By making those same industry bodies the ones that are responsible for regulating loot boxes, DCMS is essentially guaranteeing that foxes are the ones guarding the hen house.”
Dr James Close, a lecturer at the University of Plymouth who has published research on the connection between loot boxes and problem gambling, was disappointed by the report. He also called out the DCMS, saying:
Quote“They cited those things, but then they equally said there’s no evidence of causation here. They might not be able to support causation, but if people at serious risk of harm are engaging heavily in this form of monetisation, then it doesn’t matter whether loot boxes cause problem gambling.”
Additionally, he countered the government’s argument that the items collected at the loot boxes had no real-world monetary value because there are secondary markets that allowed players to sell their items.
Tighter Controls are Already in Progress
GambleAware, UK’s leading independent charitable organization promoting safer gambling, has recently published a statement appealing to the government for more substantive legislative action on the loot boxes. Previous research by the charitable organization has linked loot boxes to gambling-like responses in youngsters. As such, GambleAware proposes that the new UK government should consider introducing laws that will limit how children and youngsters access the said in-game products.
With that in mind, some game developers and platforms have already adhered to the recommendations of DCMS. For example, to safeguard children, Xbox has included options in their video games that require permission from a guardian for children under 18 years before spending cash on the games.
At the same time, unlike the UK, countries like Spain and Netherlands are already drafting laws that would either introduce an outright ban or stricter measures to regulate access to loot boxes.
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