Research reveals “non-existent” enforcement of industry-led standards on loot boxes
New findings reinforce longstanding concerns from 5Rights about the inadequacy of industry self-regulation in protecting children from exploitative in-game purchases.
New research published by the Royal Society has found “widespread” non-compliance and “non-existent” enforcement of the UK’s industry-led, self-regulatory principles on in-game loot boxes. The industry principles – introduced in 2023 by the games industry body UK Interactive Entertainment (UKie) – followed the Government’s decision not to regulate the use of loot boxes, despite their known risk to children.
These principles included commitments to restrict children’s access to loot boxes, offer lenient refunds to parents where loot boxes had been purchased without their knowledge, and to disclose whether games contained loot boxes at point of download. However, this new research exposes critical gaps in how the principles are being implemented.
Loot boxes are purchasable features containing an unknown mix of lower and higher value rewards or prizes (e.g. weapons in a combat game or players in a team sports game). 5Rights’ Risky by Design research has long highlighted that services with in-app purchases such as loot boxes often deploy dark patterns to nudge children into paying, provide limited or hard-to-use safeguards, and are deliberately designed to extract as much money from players as possible.
Researchers Leon Y. Xiao and Mie Lange Lund analysed the top 100 highest-grossing games for iPhone in the UK between January and July 2024 (prior to the principles coming into effect) and then again between July and December 2024 (after the principles came into effect). They found:
- Lack of effective age verification: None of the games analysed use effective age verification before permitting gameplay and in-game purchases. This is in direct contradiction with Principle 1, which states that providers should “effectively restrict anyone under the age of 18 from acquiring a loot box, without the consent or knowledge of a parent, carer or guardian.” Further, no effective intervention requiring explicit parental consent was observed.
- Lack of transparency: Only 19 (23.5%) of the 81 games offering loot boxes disclosed their presence in the App Store, despite Principle 4 requiring providers to “disclose the presence of loot boxes prior to purchase and download of a game.”
- Obscure probability rates: Just 7 (8.6%) of the 81 games disclosed loot boxes’ probability rates, despite Principle 5 stating services should “give clear probability disclosures.”
These findings reaffirm the need to go beyond industry-led initiatives when it comes to protecting children.
“This research is a stark reminder that the tech industry cannot be left to mark its own homework, especially when the wellbeing of children is concerned.
Ministers must urgently address the risk of loot boxes to children and introduce robust, legal and enforceable regulation bringing them into scope of gambling laws and creating certainty for the industry.”
Colette Collins-Walsh, Head of UK Affairs at 5Rights
The time for industry promises has passed. As a clear contract/commercial harm within the 4Cs framework for classifying risks to children in the digital world, the Government must intervene urgently with adequate and enforceable regulation so that loot boxes are treated as a form of gambling. This intervention will help keep children safe, give parents and carers peace of mind, and bring services concerned only with their business model to tow.