The UK’s Department for Digital, Culture, Media & Sport (DCMS) announced that the government would not regulate game loot boxes. The regulator reached this decision despite a recent study linking loot boxes to problem gambling. The DCMS instead recommended that the industry should take measures to self-regulate. The regulator warned that failure to do so could result in legislative action.
A Controversial Topic
Video game loot boxes are virtual items that can award players a randomized selection of in-game loot, such as cosmetic options for the player’s character or equipment like weapons or armor. Many games allow players to purchase these with real-life money and the random element quickly drew comparisons to gambling.
A 2021 research by Plymouth and Wolverhampton universities compiled 13 previous studies on the topic. They found that nearly 40% of children who played games had opened loot boxes. All but one of the studies had established an unambiguous connection to problem gaming in a largely unregulated and unsupervised environment easily accessible to kids. In 2018, Belgium deemed loot boxes gambling products and effectively banned them. However, the UK will not follow suit.
Video Game Publishers Expected to Self-Regulate
Nadine Dorries, UK Secretary of State for Digital, Culture, Media, and Sport, stated that the government would first encourage the £7 billion UK video game industry to self-regulate. A specialized working group will report on the situation during Q1 2023.
Dorries defended the decision with fear of “unintended consequences” from a complete loot box ban. There is a possibility that game developers could instead refuse to comply and leave the UK market. The government report also expressed concern that children would instead use adult accounts and would not be so well protected. Finally, the consultation concluded that there was no direct connection between loot boxes and gambling.
The call for evidence has found an association between loot boxes and harms, but we have not found whether there is a causative link.
DCMS call for evidence on loot boxes in video games
The DCMS Issued Stern Recommendations
While the regulator did not take any legislative action, it issued some stern warnings. The DCMS cautioned that youth should not be able to purchase loot boxes without parental approval. Additionally, all players should be able to access spending controls and transparent information. The regulators warned that if the industry did not demonstrate tangible results, it could pursue legislative measures.
The government’s decision drew a focused response from regulation proponents. According to University of York video games expert Dr. David Zendle, the video game industry was unable and unwilling to regulate itself.
“Prior… inquiries have unambiguously shown that certain bad actors within the video game industry cannot be trusted to self-regulate when it comes to player protection.”
Dr David Zendle, University of York
Zendle concluded that expecting industry bodies infamous for their previous loot box controversies to self-regulate was akin to letting the foxes guard the hen house.