The games industry has “a strong financial interest in fostering addiction” it has been warned at Westminster, amid concerns so-called loot boxes are fuelling problem gambling among children and vulnerable people.
The Government has been urged in Parliament to take action on in-game purchases to safeguard youngsters against harm.
Ministers, who have faced criticism for looking to the industry to introduce stronger protections, insist legislation will be considered if deemed necessary.
A business model that relies on the fiscal success of harmful products must be regulated by Government and not by the companies themselves— Lord Foster
A call for evidence on loot boxes was launched by the Department for Digital, Culture, Media and Sport (DCMS) in 2020.
It found players who have purchased loot boxes may be more likely to experience gambling, mental health and financial harm. The risk may also be higher for children and young people.
Loot boxes are a type of in-game purchase in some video games. Players can purchase a loot box with real money to receive random items, including “power-ups” to help a player compete better in the game and “cosmetic” items, such as virtual clothing.
Some games platforms, such as Xbox, have already taken steps to improve protections, including options that require parental permission for under-18s to spend money within games.
Liberal Democrat and former minister Lord Foster of Bath, who is chairman of Peers for Gambling Reform, argued loot boxes should be treated as gambling and regulated accordingly.
He said: “How can a Government that has stressed that it would take an evidence-based approach, accept that there is a link between loot boxes and harm, yet not legislate to protect people from this harm?”
He added: “I am a fan of the UK games industry. It contributes significantly to the success of our creative industries. And it is a responsible industry.
“But with significant earnings to be made from loot boxes, asking it to take significant steps to reduce its well-documented harms is asking too much of them.”
Lord Foster told peers: “A business model that relies on the fiscal success of harmful products must be regulated by Government and not by the companies themselves.”
Former cabinet secretary and civil service chief Lord Butler of Brockwell said: “Most people would take the view … that when somebody pays for access to a loot box giving the chance of a greater or lesser prize they are taking a gamble.
“If it looks like a duck, walks like a duck and quacks like a duck, it probably is a duck.”
He added: “The Government appears to have more confidence in the likelihood that the industry will introduce effective safeguards than many of us do.
“The fact which cannot be escaped is that the industry has a conflict of interest.”
Highlighting the revenue generated by loot box sales, Lord Butler said: “We have to face the fact that the industry has a strong financial interest in fostering addiction.”
Labour frontbencher Baroness Merron said: “It does seem to me the take-up of loot boxes is only likely to increase because they are becoming increasingly important to developers.
“And given the obvious links with gambling as has been acknowledged to some degree, are we not looking at an exponential growth of risk in the coming years.
“We shouldn’t wait for something of a crisis for action, but we should seek to prevent that crisis happening.”
The Government expects action and the industry should be aware that the Government will not hesitate to consider legislative options if we deem it necessary— Lord Kamall
She added: “There is a potential harm that access to loot boxes can do and that is particularly with regard to children. This is about the potential for problem gambling and it does beg the question why the Government has dragged its feet in acting.”
Responding, digital minister Lord Kamall said: “We know that more should be done by games companies and platforms.”
But he added: “Rather than imposing a solution we want to work with the industry and say ‘How will you tackle this problem given your creativity,innovation and technical experience?’
“Play safety should be embedded into the game design.
“The Government expects action and the industry should be aware that the Government will not hesitate to consider legislative options if we deem it necessary.”
