UK Releases New Regulations Regarding In-Game Transactions

Advertising Standards Authority (ASA) is the self-regulatory organisation of the advertising industry in the United Kingdom. Recently, the organisation has released new regulations regarding transactions and advertisements in video games. Previously, the organisation had been monitoring misleading advertisements and online scams in the country. However, its course has now come to in-game transactions and advertisements.

Earlier this week, the Advertising Standards Authority (ASA) released a statement regarding “advertising in-game purchases,” which mentions the advertisement of microtransactions in video games. Recently, microtransactions have become very common, particularly in free-to-play games, such as Fortnite and VALORANT. Still, there aren’t many regulations in place to monitor these companies whose primary sources of revenue are in-game transactions and advertisements.

The ASA (one of the UK’s advertising watchdogs) has issued its new guidance on advertising in-game purchases.

This is huge and will require significant shifts in current industry practice.

For a detailed breakdown, check out my post below.https://t.co/S1jagv7y85

— Pete (BlackLivesMatter) Lewin (@LegalGamerUK) September 24, 2021

The newly released statement discusses how advertisements that appear through in-game marketplaces and digital storefronts might mislead consumers about the cost of the microtransactions and how they might coerce them into purchasing. However, the statement does mention an obvious difference between video games that only let you purchase in-game currency through microtransaction and those that allow you to earn some of it, too.

“Following increased awareness of concerns raised by the public, the video game press, campaign and research organisations, and by Government Select Committees about the potential for in-game purchasing, particularly of random-item products (often called ‘loot boxes’), to cause harm and/or to mislead consumers, CAP and BCAP examined the role of advertising in this area with a view to determine whether regulatory intervention was appropriate,” says the statement.

The statement particularly talks about the advertisement of loot boxes in video games, such as CS:GO, and compares them to gambling, stating that loot boxes are based on chance. However, the Advertising Standards Authority (ASA) concluded that further evidence in this regard is still needed, as items obtained from loot boxes are restricted for use in the particular video game and can’t be cashed, which makes it “unlikely to be caught as a licensable gambling activity.” Previously, democrats in the United States also sent a letter to video game giants, such as Activision and Epic Games, trying to ban loot boxes for children in video games.

For video games that only have the option to purchase an in-game currency through actual currency, the organisation states that the transactions made must mention clearly how much the in-game currency is worth. For instance, if you want to purchase a new cosmetic item for 1,000 points, there should be a GBP or USD equivalent of that amount mentioned which makes it obvious how much the in-game currency is worth.

The statement also restricts the use of misleading labels, such as “best offer,” and countdown timers to force consumers, particularly children, into making the purchase. Furthermore, companies have to make it obvious in advertisements if the consumers need to spend a certain amount of money to purchase an in-game cosmetic item that costs less. “Although it would be legitimate for advertisers to include optional extras as part of their marketing, there is a need to avoid implying that items requiring further purchase are included in the basic game,” it states.

While the Advertising Standards Authority (ASA) does not have the authority to fine companies that violate these regulations, it can take the concern up with higher authorities. So, we can expect these regulations to be implemented across the United Kingdom soon.

What do you think about this? Do tell us your opinions in the comments below!

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