Ukraine InvasionCybersecurityEnergyTravel IndustryAutos

In-game loot boxes come under fire from European consumer groups, who are calling for ‘serious regulatory oversight’

May 31, 2022, 3:04 PM UTC

European consumer groups have launched a major push for regulation of “loot box” mechanics in games, which they say are exploitative and predatory.

Loot boxes offer players the chance to get in-game items, such as weapons or power-ups, using in-game virtual currencies that can typically be obtained in two ways: hours and hours of gameplay; or paying real money to speed things up.

The contents of these crates remain a mystery until they are purchased and opened, making them a little bit like lottery scratch cards. Still, loot boxes generated more than $15 billion in 2020.

According to the Norwegian Consumer Council, which is spearheading the push for regulation, the gaming industry is using “problematic” practices to encourage people to spend cash on items that could turn out to be literally game-changing or fairly insignificant—with the odds heavily favoring the latter.

“Although the video games industry is amongst the largest entertainment industries, it has often eluded serious regulatory oversight. Therefore, we call for stronger regulatory action against video game companies that fail to respect consumer rights and that prey on consumer vulnerabilities,” the council said in a report published Monday.

Twenty European consumer groups are backing the push, from 18 European countries including Germany, France, Italy, and Spain.

One of the practices they’re targeting is the use of deceptive designs (also known as “dark patterns”) to steer people toward making purchases—buttons that are shaped in a particular way, and notifications of what other players have scored in their loot boxes, which can exert social pressure to spend money to catch up.

Another big issue is the use of in-game currencies to buy the loot boxes, which “masks the actual value that you pay to get these rewards,” said Finn Myrstad, the Norwegian Consumer Council’s director of digital policy.

“We would like the virtual currencies to always be denominated in real monetary value. That would help people understand how much they’re spending,” Myrstad told Fortune.

The consumer advocates want to see a sweeping ban on loot boxes in games that are typically used by minors. They also want game marketing to be clearer about the odds of winning something—a move that Google and Apple have mandated in their app stores for a few years now.

The groups want the European Union to come up with new rules based on consumer-protection law, because gambling law is tricky—that’s one of the few areas where each EU country is exclusively responsible for its own laws, and the bloc cannot set uniform rules.

“A consumer law is enforced at the European level so it makes sense for us, as we think this is in breach of the basic freedom to choose,” said Myrstad.

Indeed, a couple of European countries have already tackled the loot-box issue under gambling rules: Belgium in 2018, then the Netherlands in 2019.

The Dutch position was partly reversed earlier this year when a court overturned a ruling in EA’s FIFA game, saying that loot boxes did not constitute unlicensed gambling unless their contents could be exchanged for real money.

Activision Blizzard is due to release the new Diablo Immortal title this week, but won’t be doing so in Belgium nor the Netherlands, reportedly because of “the current operating conditions for games in those countries.”

However, EA in 2019 responded to the Belgian crackdown by simply ending the practice of selling virtual currencies there that can be used to buy loot boxes.

According to Myrstad, the disparity of these game-studio responses “shows there’s a range of options” for being less exploitative.

Lawmakers in the European Parliament are currently drawing up a report on the issue, which could help shape future legislation. One of them, the Dutch Green politician Kim van Sparrentak, told Fortune her party wanted to see a “ban for the usage by children, because it is clear this is a form of gambling, and that should be prohibited.”

“Legally, this is something that EU member states need to regulate individually, but we will make that call in the report,” van Sparrentak continued.

“Furthermore for adult users, much greater transparency is needed. In particular, it needs to be clearly displayed what the chances are of winning a certain item before the purchase is made, and it needs to be clear how much money you need to spend before you can get a certain item,” she said, adding that “transparency should be required regarding the average consumer spend on ostensibly ‘free’ games.”

EA’s FIFA 22 is, along with Raid: Shadow Legends from Plarium (which had not responded to a request for comment at the time of publication), one of the games whose loot-box mechanics are specifically highlighted and criticized in the Norwegian report.

According to the report, a player looking to get the Team of the Year (TOTY) card for a specific player such as Paris Saint-Germain’s Kylian Mbappé would on average need to buy 847 “jumbo rare player packs” to find it. That could cost around €13,500 worth of “FIFA points.”

Alternatively, the player could just earn that amount of in-game currency by playing the game for around a decade, Myrstad said, describing the situation as “absurd.”

“In FIFA, spending is always optional, and most players choose not to spend at all,” an EA spokesperson said in an emailed statement. “We want all players to have a positive experience in our games and strive to empower players and parents with as much information and control as possible to make informed choices for themselves and their children.”

This article was updated on May 31 to add Kim van Sparrentak’s comments, and again to add EA’s statement.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.