In the UK, Advertising Standards Authority has warned Hutch Games for failing to reveal that loot-boxes were used in two mobile racing games.
Hutch Games was the subject of two complaints to the ASA. An academic researcher on game regulation brought both cases to light. Leon Xiao, from the Centre for Digital Play of the IT University of Copenhagen has confirmed that he filed both complaints.
In May 2023, the first complaint was about F1 Clash Car Racing Manager. This game is available in Apple’s app store. The accompanying text stated that the game is free but certain in-game objects can be bought with real money.
A complainant complained that the list did not make it clear whether the game included random item purchases. These features, also known as lootboxes, allow players to purchase real-money in order to access random items within the game.
Hutch Games has misinterpreted the advertising guidelines
Hutch Games responded by saying that users can progress through the game without spending money. Hutch Games did not think that the advertisement lacked any material information to allow consumers to make an informed choice about whether or not they wanted the game.
Hutch Games cited CAP guidelines on advertising in-game purchase. In these guidelines, if the virtual currency is earned within a game then any in-game advertising and inducement for purchases will not be considered. The Bucks in-game currency can be purchased and earned, so the code CAP did not seem to apply.
Hutch Games, however, said that after receiving notification of the complaint it realized it misinterpreted CAP guidelines. It will therefore update its product listing in the Apple App Store.
ASA claims ad misleadingly omitted important information
In its ruling on this case, the ASA acknowledged that currency in games could both be purchased and earned. The ASA said that this distinction was only applicable to the in-game stores and incentives to buy items within games.
The ASA stated that “we further understood product listings in app stores to be within the scope the CAP code regardless if any virtual currencies could be earned by the game.”
The ASA also referred back to the advertisement’s reference to “in-game purchases”. The ASA said that no additional information had been provided on the in-app purchase or whether loot box purchases were possible in the game.
The ASA stated that “we considered that the information provided in the ad wasn’t sufficient to allow consumers to understand the loot box purchases in in-game purchase,” they said. The ASA said that because the advertisement did not clearly state that there were loot-boxes in the game, and we believed that this information was important to the decision of consumers to download the app, the ad omitted vital material information.
The ASA ruled that the ad violated CAP Code (edition 12, rules 3.1 and 3.3 on misleading advertising. The ASA stated that the ad should not be repeated in this form. Hutch Games was also asked to clarify if any other games contained loot box.
Second lootbox case: Similar decision
The second complaint was of a very similar nature. The complaint was made for Rebel Racing, and the advertisement failed to mention that there were loot-boxes in the game.
Hutch Games made a similar argument, stating that the player can either spend real money or not. The Keys currency in the game could also be earned, according to Hutch Games.
It again claimed that it misinterpreted the CAP guidelines on in-game ads and purchases.
The ASA came to a similar conclusion. The ASA acknowledged Hutch’s statements, but pointed out that the advertisement did not provide enough information about the in-app purchase or whether loot box purchases were possible in the game.
The ASA stated that “because the ad failed to make it clear that there were loot-boxes in the game, and we believed that this information was important to the consumer’s decision to download the app, we concluded the ad omitted misleading material information.”
ASA also said that the ad should not be repeated in this form. Hutch Games also must state if any other games have lootboxes, according to the ASA.
A Hutch representative said, “Following discussion with the ASA we have acknowledged that a mistake has been made in our listing of our games Rebel Racing and F1 Clash for the Apple App Store on Google Play Store.”
We immediately rectified this error. “We are making sure that future listings will contain correct information.”
Loot Boxes and Gambling: A Connection
There has been much written and said about the relationship between loot box and gambling. Children’s video games with a gambling element – such as exchanging cash for random items – have raised concerns.
UK Interactive Entertainment, the UK games industry’s trade association, released guidelines in July on loot box distribution. It recommended that lootboxes be restricted to those over 18.
The technical working group was responsible for the Ukie guidelines. The DCMS set it up in July of 2022.
This group was formed in response to the release of findings by the government from an appeal for evidence pertaining to loot box. The group was launched in September of 2020.
Other markets have seen a similar rise in loot box sales. The Federal Congress on Gaming and Gambling will be discussing these and other topics at this week’s event. Robert Hess, from Gluecksspielwesen.de summarized the current stance regarding loot box last week.
WestLotto – the state lottery of North Rhine Westphalia – has also called on politicians, scientists, and industry participants to discuss loot boxes regulations.
