UK Ad Watchdog Halts Microtransaction Ads

The microtransactions and loot box market of gaming has grown exponentially in the last five years, prompting some governments in more recent years to take steps to avoid possible predatory issues. It was earlier this year that I reported on a new German law that gives games with Loot boxes an 18+ rating. Moreover, it was last year I was reporting that the top mental health nurse of the NHS was saying loot boxes are addicting, meanwhile, this April a leaked EA doc suggested: “sell more loot boxes.”

Well, according to Eurogamer on Friday, the UK’s Advertising Standards Authority (ASA) will be tightening its guidelines on how you can advertise in-game purchases from now on. Don’t get too excited just yet, as this doesn’t ban microtransactions or even loot boxes. The new guidelines that the ASA has set out (more or less) are tightening how items or purchases in storefronts are shown to affect your in-game experience. This is with the aim to reduce the number of in-game prompts telling you how much you require X item right now.

Furthermore, there is a number of concerns over any workarounds that the industry may already have, such as in-game currency that is only available through purchase. With that in mind, the ASA says it will view in-game currency used to correlate for real-world money spent and will be looked upon with a dimmer view. All currency that is only available through these purchases will now have to make clear on the storefront the equivalent amount. The example Eurogamer uses is a skin that is worth 2000 gems in-game will now have to feature a pound of dollar equivalent next to those gems. Similarly, with any amount of gems connected with your account, you should get the equivalent shown to you to see how much it costs to complete the purchase.

This is all aimed to reduce purchases of currency or in-game items that will leave you with excess balance. That tends to be a practice aimed to keep you spending. Though the ASA’s goal is to reduce (as an example) an item that costs a couple of dollars to purchase in-game, while you can only buy currency in increments of $5, $9.99, and so on. Now, the stores will have to display if this will be the case. Gone are the “Best offer” stickers and other fear-of-missing-out timers based on deals, as the ASA cracks down on pressures to purchase.

When it comes to the ASA’s power to halt loot boxes, that was a non-starter. When speaking on the reference to gambling, the ASA said, “the organization responsible for determining whether random-item purchasing is a form of gambling is the Gambling Commission, and changes to the law surrounding this definition are subject to work by DCMS.” They went on to say that it and fellow committees are “not entitled to make a determination about whether random-item purchasing constitutes gambling or should be treated as such.” However, the least the ASA could do with its power was make sure it is advertised on storefronts that there are loot boxes within.

In consultation with those within the industry, it has been highlighted that there is still the risk of gambling-like practices, and the ASA will take this into account in cases it oversees. When it comes to complaints filed with the ASA, they have stated they will deal with them “on an informal footing” for six months as the new guidelines come into effect. This is entirely something that some may not wish to hear.

As Eurogamer notes, senior associate at the UK-based law firm Wiggin (which deals with media law) Peter Lewin made a lengthy post on Linkedin on this topic. Saying, “This is huge and will require significant shifts in current industry practice.” He mentions that while the watchdog can’t impose fines or effect greater change, it can name, shame, and direct further regulators to impose the necessary actions to be taken.

While it is true that the ASA’s power is limited and even within that its limited power is only within the UK, it could lead to further changes worldwide. A number of European countries such as Belgium have taken similar or further steps to limit the gambling influence in gaming through microtransactions and loot boxes. Meanwhile, down under laws are being proposed. Though, in the US things have fallen a little stagnant since (of all people) Senator Josh Hawley attempted to introduce S.1629 and regulate pay-to-win and the sale of loot boxes. These guidelines from the ASA could provide precedent to move forward with further regulations or be used as mold elsewhere to set out similar guidelines.