On July 18, 2023, the Association for UK Interactive Entertainment (“UKIE”), the trade body for the UK video games industry, published new industry principles and guidance surrounding paid loot boxes (the “Principles”) for application in the UK.

The Principles were recommended by the Technical Working Group on Loot Boxes (“TWG”), a panel of games companies, platforms, government departments and regulatory bodies, which was convened by the UK Government in order to mitigate the risk of harms for children as a result of loot boxes in video games.  Each member of the TWG has committed to comply with the Principles moving forward.

Paid Loot Boxes

The Principles describe a loot box as a video game mechanism that provides random in-game virtual items (e.g. a costume for the player’s character) in exchange for real-world money or in-game virtual currency.  The Principles apply only to paid loot boxes.  A paid loot box is a loot box that is either purchased with real-world money or purchased using virtual currency that itself has been purchased.  The Principles do not apply to loot boxes earned purely through gameplay.

What are the Principles?

UKIE has published eleven principles aimed at achieving two overarching objectives:

  • Child Safety:  Restrict the ability for under-18s to purchase a loot box unless first approved by a parent, carer or guardian; and
  • Access and Awareness:  Provide all players with access to and greater awareness of spending controls and provide transparent information that supports safe and responsible play.

We have highlighted some key principles below:

  • Technological Controls:  Make available easy-to-use technological controls to effectively restrict anyone under the age of 18 from acquiring a paid loot box.  These controls should be introduced to all parents, carers and guardians through the start-up process of a video game, or through unboxing;
  • Disclosure:  Disclose the presence of paid loot boxes prior to purchase and download of a game so that users can make informed decisions.  Part of this disclosure obligation is to use the PEGI or equivalent proprietary age rating system on storefronts and in-game to provide transparent information to consumers; and
  • Refunds:  Commit to fair and prompt refund policies where spending has demonstrably occurred without parental consent or knowledge.  Advertise clear instructions on how to turn on parental controls where issues persist.

The Principles supplement existing guidance on advertising in-game purchases in accordance with the CAP Code and data protection guidance contained in the Information Commissioner’s Office’s Children’s Code.

Moving Forward

The TWG has committed to a number of steps after the publication of the Report, which are designed to further the overarching objectives of the Principles:

  • Expert Panel:  A newly-formed expert panel will meet regularly and develop best practices on age assurance in the games industry;
  • Public Information Campaign:  The TWG has committed to a three-year £1 million public information campaign, which started in July 2023, to provide greater information to players, parents, carers and guardians regarding safe and responsible play; and

The TWG will work with the UK Government to assess the effectiveness of the Principles after an implementation period of 12 months, after which some changes may occur as a result of technological innovation in the gaming space.

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Will Capstick contributed to the preparation of this article.

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Photo of Jane Pinho Jane Pinho

Jane Pinho is co-chair’s Covington’s Entertainment and Media Industry Group and is a partner in the Technology and Communications practice and the International Business Reorganization practice. She has advised international streaming services on their content acquisition strategies, on new product launches and global…

Jane Pinho is co-chair’s Covington’s Entertainment and Media Industry Group and is a partner in the Technology and Communications practice and the International Business Reorganization practice. She has advised international streaming services on their content acquisition strategies, on new product launches and global expansions, and on media regulation and licensing for the past decade.

Jane works with media industry leaders with global operations, including streaming services, video games and interactive entertainment companies, and social media platforms. She has particular experience advising in relation to the creation, acquisition, and distribution of digital content in the UK and Europe, in relation to the multi-territory launch, expansion, monetization and marketing of digital media products and services and in relation to compliance with the UK’s broadcasting, on-demand, video-sharing platform and online safety regimes, representing clients facing regulatory scrutiny. She also has experience advising media and technology companies on UK and EU consumer protection law, including on an investigation by the EU Commission and the Consumer Protection Co-operation Network.

Jane is also a key figure in Covington’s International Business Reorganization practice. She has managed global post-acquisition business reorganizations, pre-sale and pre-spin business separations and tax reorganizations for companies with substantial global footprints for more than a decade.

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