Bad ads

Despite video game companies being allowed to self-regulate in the UK when it comes to the implementation of loot box mechanics, many of them have violated the rules regarding these gambling-style in-game features.

failing to provide warnings on Facebook ads that their games contained loot boxes

The Advertising Standards Authority (ASA) has issued warnings to three companies for failing to provide warnings on Facebook ads that their games contained paid loot boxes.

Electronic Arts (EA), Jagex, and Hutch Games breached the rules, with EA attributing the issue to human error and claiming that these failings did not reflect the company’s general compliance. Jagex said that it didn’t have sufficient room on its Facebook ads to include a warning and that it included the message on other types of ads, while Hutch admitted it misinterpreted the guidance and subsequently made the necessary changes.

Calling for change

Leon Xiao, a loot box regulation expert, found breaches in over 90% of ads that he looked at. He only presented a few of the violations to the ASA as a way to bring the issue to light and suggests that self-regulation is not the best way to protect children. Speaking to The Guardian about video game companies, he said they are “supposed to be role models, rather than rule-breakers themselves.”

Xiao intends to submit further complaints this year if the authorities don’t resolve the non-compliance issues. He also called for heavier punishment for any repeat offenders and to hold ad platforms somewhat responsible for the content that they host.

The chairperson for the Peers for Gambling Reform group in the House of Lords is now calling on the government to step in to properly regulate loot boxes. A Department for Culture, Media, and Sports spokesperson said the government is monitoring the impact of the recent guidelines and has been clear that video game publishers have to do more when it comes to protecting people.

Reigning in loot boxes

Loot boxes allow players to use in-game currency or real money to open up packages that contain virtual items. Said items typically have a probability assigned to them depending on their rarity which dictates the frequency in which they appear. Many people have likened loot boxes to slot machine spins.

can be a gateway for underage people to get into more serious gambling

Numerous countries introduced blanket bans on these types of in-game features, including the Netherlands and Belgium, over concerns that they can be a gateway for underage people to get into more serious gambling.

The UK government decided against defining loot boxes as gambling products and instead created a working group that was tasked with drafting industry regulations. This led to the publication of 11 principles in August, including a requirement that companies show a message in ads that they offer paid loot boxes.