Last year, the UK Government called upon the games industry to regulate itself on loot boxes. The games industry trade body, the Association for UK Interactive Entertainment (“Ukie”) has since published 11 Industry Principles related to loot boxes in video games (“Principles”). These principles were recommended by the Technical Working Group (“TWG”), convened by the Department for Culture, Media and Sport, to enhance player protection and promote safe and responsible gameplay. The full guidance is available here.

A loot box is a video game mechanic that provides random in-game virtual items to players in exchange for real-world money or in-game virtual currency. A “paid” loot box means a loot box that is either purchased using real-world money or acquired using virtual currency that itself has been purchased – which broadly puts the definition in-line with other in-game monetisation guidance, such as the CAP’s Guidance on advertising in-game purchases. The Ukie principles do not apply to a loot box that is purely earned through gameplay.

The Principles recommend that the games industry acts to restrict loot box purchases by under-18s without parental consent. Other recommendations include the implementation of easy-to-use spending controls for all players, clear disclosure of presence of loot boxes and probability of receiving virtual items, and lenient refund policies for purchases made without parental consent.

The Principles are not exhaustive, nor are they prescriptive (in order for the industry to continue to innovate in this space). Some critics have flagged that many of the Principles should have already been adopted by games companies (e.g. in relation to PEGI disclosures), but noting that enforcement has historically been an issue.

Ukie highlights the following best practices to promote safe and responsible play:

1. Using the PEGI ‘in-game purchases (includes random items)’ descriptor to disclose paid loot boxes;
2. Implementing a default spending limit of £0 for child accounts on major consoles and popular PC/mobile platforms;
3. Prompting users to activate technological controls during console and mobile setup; and
4. Running the “Get Smart about P.L.A.Y” campaign to encourage parents/guardians to manage in-game purchases and screen time.

• A public information campaign, starting in July 2023, will raise awareness of player controls and parental guidance on in-game purchases, including loot boxes.
• The TWG will also work with the UK Government and stakeholders to assess the effectiveness of these Principles after a 12-month implementation period.
• An expert panel on age assurance will conduct evidence gathering and consultations, and produce a progress report in summer 2024 aligned with regulatory guidance.

• Whist compliance with these Principles remains voluntary at present, if the industry does not act to regulate loot boxes, then the Government may revisit the voluntary nature of the code and take further action (e.g. by making mandatory principles).
• The Principles have also fed into the upcoming updated PEGI Code of Conduct, so although fines are not yet envisaged by the UK Government under the Principles, it is possible we may however see more fines from PEGI (such as those against Activision-Blizzard and PLAION earlier this year). The Principles also infer that platforms could have their own remedial actions against non-abiding publishers, such as delisting and in some cases, fines.
• The age assurance piece is likely to continue to be a particularly sticky topic; whether or not the UK Government’s expectations align with the ICO (under the Children’s Code) and Ofcom (under the Online Safety Bill) remains to be seen.
• Businesses operating in the games industry should consider if their practices align with these principles – either to the letter or in spirit. Working collaboratively with other industry stakeholders and engaging with the UK Government to measure the effectiveness of these principles is recommended, particularly if the industry wishes to avoid further regulation in this space.

Please contact us if you would like any further information. We also maintain a heat map on the status of loot box regulations globally.