CAP and BCAP launch consultation on advertising in-game purchases against a back drop of regulatory scrutiny

The Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) have launched a consultation on new proposed guidance to regulate the way that in-game purchases in apps and video games are advertised (the Proposed Guidance), with the aim of reducing their potentially harmful and misleading effect on consumers.

Whilst the Proposed Guidance helps provide a better understanding of how to market in-game purchases to comply with the Advertising Codes, it remains to be seen whether the guidance presents a proportionate impact on the video game industry.

What are in-game purchases?

The video game industry continues to thrive despite the economic disruption caused by the coronavirus, unimpeded by social distancing and reduced consumer and business activity. The industry focus on “increasing engagement per user” continues to give rise to in-game monetisation.

In-game purchases enable players to acquire a variety of virtual items for use within an app or game. They include so-called ‘loot boxes’ (a mechanism whereby players spend real or virtual in-game currency to receive a randomised selection of virtual items of varying in-game value and rarity), cosmetic upgrades often referred to as ‘skins’, and the ability to unlock additions to the gameplay, for example new characters or storylines.

Recent scrutiny of elements of in-game purchases

The Proposed Guidance comes at a time of increasing regulatory scrutiny of elements of in-game purchasing, particularly loot boxes. CAP and BCAP are among a number of regulatory bodies and institutions, as well as the public and the video game press, expressing concern over certain related industry practices.

On 23 September 2020, the UK government launched a call for evidence on loot boxes. This formed part of the government’s response to the Department for Digital, Culture, Media and Sport report on Immersive and Addictive Technologies, which called for loot boxes to be regulated as a ‘game of chance’ under the Gambling Act 2005. For more information see UK Government responds to DCMS Select Committee Report on Immersive and Addictive Technologies.

CAP and BCAP Proposed Guidance

CAP and BCAP are not proposing changes to the Advertising Codes as they consider that the existing rules, with the help of additional guidance, can adequately mitigate some of the potential harm to consumers in respect of in-game purchasing.

The Proposed Guidance covers three areas:

(i) pricing information, which should allow players clear oversight over the amount of real money which is spent on in-game purchases;

(ii) the presentation of in-game purchases, which should not unduly pressure consumers into a purchase; and

(iii) advertising games with in-game purchases, which should make clear that some elements of the game are only available at an additional cost.

Pricing information

CAP and BCAP consider that the use of in-game currency, combined with measures such as price bundling and odd-pricing, (where currency and purchasable items are sold in increments that do not match up), currently causes confusion among consumers (particularly children or vulnerable people) as to how much real money in-game purchases cost. The Proposed Guidance calls for greater transparency on the part of gaming providers, such as by providing clearer explanations to consumers of how bundling affects price and displaying ‘exchange rates’ to enable players to calculate the price of an item.

Presentation of in-game purchases

Players are presented with in-game purchases in a variety of ways, such as through pop-up messages offering performance boosting items or the offer to buy additional lives after a player loses. Whilst certain approaches are unlikely be harmful, the Proposed Guidance identifies some types of messaging, such as time-dependent offers and the marketing of loot boxes encouraging the player to ‘try one more time!’, as having the potential to harm vulnerable players by unduly pressurising them to complete a purchase and therefore unlikely to comply with the social responsibility requirements of the Advertising Codes. The Proposed Guidance therefore seeks to ensure appropriate messaging around the purchase of in-game items (particularly random-item purchasing) reduces the risk of harm to vulnerable people.

Advertising games with in-game purchases

CAP and BCAP also recognise the need to strike the right balance between gaming providers’ ability to include optional extras in marketing materials, and their duty to avoid falsely implying that paid game features are included in the basic game. The Proposed Guidance states that advertising should make clear where games contain in-game purchases (and direct references should be made to random-item purchasing where present) in a format easily accessible by consumers. In addition, trailers should include content which is representative of actual gameplay, and where paid-for content is displayed it should be clearly identified as such.

 Next steps

As an industry that has continued to become more prominent and moved to digital and online models, the regulatory compliance burden has increased. Concerns around elements of in-game purchasing are not new and the Proposed Guidance, and clarity it seeks to provide, may well be unsurprising to the video games industry.

The CAP and BCAP consultation was launched on 5 November 2020 and stakeholders with an interest or expertise in games, apps and digital purchasing have until  28 January 2021 to respond.  It will be interesting to see whether the Proposed Guidance sufficiently addresses consumer protection concerns without significantly impacting the industry. Watch this space.