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Advertising in-game purchases - CAP and BCAP propose draft guidance

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United Kingdom

According to the Global Games Market Report 2020, the European games market will generate revenues of $29.6 billion, a +7.8% year-on-year increase, with in-game purchases providing an often highly lucrative additional revenue stream for games developers and making games highly profitable even when they are technically free to play.

However, from a consumer protection perspective, concerns have been raised by the public, the video game press, campaign and research organisations, and by Government Select Committees about elements of in-game purchasing. Primary concerns relate to features of the in-game purchases, including the random nature of some in-game purchases, the similarity to games of chance and whether they act as a gateway to gambling. In light of these concerns, the UK Government seems to be under increasing pressure to consider the regulation of gaming and other products with gambling like elements[i] and to put particular protections in place for children, young persons and vulnerable persons. As a result, it has confirmed that it will review the Gambling Act 2005 and launch a call for evidence in relation to the impact of loot boxes to be reviewed at the end of this year.

Other concerns relate the presentation and promotion of in-game purchases and whether they have the potential to cause harm to or mislead consumers. In response to such concerns, the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP), the organisations respectively responsible for writing the UK's non-broadcast and broadcast advertising codes of practice (Codes of Practice) have launched a consultation on draft formal guidance for advertising in-game purchases in apps and video games (the Draft Guidance). In the Draft Guidance, CAP and BCAP aim to mitigate the risk of the potential harm of in-game purchases by clarifying the ways they should be marketed.

What are in-game purchases?

Many apps and video games contain mechanisms whereby items can be obtained through game-play, ad views and purchases made directly or through external platforms in exchange for real currency or for in-game currency (which is itself usually purchased with real money). Examples include rewards such as: new characters, skins, bonus lives, virtual money, time and power boosts to progress further in a game. The key difference between loot boxes and other in-game purchases is the element of chance involved in loot boxes. The contents and value of a loot box are random and not clear prior to purchase and may exceed or be lower than the sum paid for the loot box.

Key issues covered under the  consultation

Many of the concerns raised in relation to in-game purchases fall outside the scope of advertising regulation. However, CAP and BCAP have recognised that as in-game purchases relate to transactional decisions involving real-world money, the presentation and promotion of these offerings are marketing communications that fall within their remit and therefore, they are able to provide some guidance which will help to mitigate potential harms on those involved in making purchases.

The Codes of Practice already prohibit misleading and harmful advertising and contain extensive rules for recognising the same and encouraging responsible and truthful advertising. Therefore, rather than add new rules to the Codes of Practice, CAP and BCAP  have stated that the issues associated with in-game purchases can be better addressed through specific guidance on the existing rules. It is this Draft Guidance that is currently under consultation. In particular, CAP and BCAP have focused on the following areas:

1.  Clarity of information at point of purchase

The first concern is that the use of proprietary currency, bundling, and odd-pricing make it difficult for consumers (particularly children, young people and vulnerable groups) to understand what they are spending in real-money terms. Therefore, guidance is necessary to ensure that information is clearly presented to consumers at the store-front, including real-money pricing and factors affecting the price, without omitting or obscuring material information.

2.  Responsibility of advertising messages

The second concern is that some types of messaging have the potential to have a harmful effect on vulnerable groups because it takes place within immersive gameplay (and is time-pressured) or has gambling like characteristics. Therefore, guidance is necessary to limit this potential for harm by ensuring that messaging around the proposed item for purchase does not apply undue pressure on players into making a purchase. Advertising messages relating to random purchases should also avoid explicit or implicit links to real-world gambling and encouragements or suggestions that could lead to problem gambling behaviours.

3.  Truthfulness in advertising of games containing purchasing

The third concern is that advertisements for games with in-game purchasing do not always make it clear that the features shown in the ad are subject to additional costs. This could be a key factor in purchasing or downloading the game. Therefore, guidance is necessary to ensure that there is greater transparency about the inclusion of in-game purchases and that consumers are not misled into believing that such features are available for free, easily or through basic play.

The primary aim of the Draft Guidance is to provide clarity on what constitutes responsible advertising in relation to in-game purchases. It cites the relevant rules in the Codes of Practice relating to responsibility and the obligation not to mislead consumers and goes on to address the key issues highlighted above, providing guidance on the application of these general rules to in-game purchases and suggestions for demonstrating compliance.

In many ways this provides a useful insight into the areas to be aware of where marketing in-game purchases. Therefore, it may serve as welcome guidance to those who want clarity on what to do to ensure compliance and avoid complaints against them. However, some may consider that the Draft Guidance goes too far and could have a disproportionate impact of the gaming industry.

Invitation to respond

CAP and BCAP are inviting respondents to comment on the Draft Guidance and in particular are requesting comments on to what extent the guidance effectively addresses general concerns around in-game purchases and whether the effect of the guidance would have a disproportionate effect on the video games industry.

If you would like to contribute to the discussion, you have until 5pm on 28 January 2021.

If you require any further information in relation to this area, please don’t hesitate to get in touch with our Advertising & Consumer protection practice.

 
[i] In-game purchases and loot boxes acquired ‘via a game of chance’ do not currently fall within the scope of gambling laws in the UK, provided that they are confined for use within the game and cannot be cashed out. Note: The use of skins as a currency to gamble online is considered gambling, and is regulated by the Gambling Commission under the Gambling Act 2005.

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