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ASA rebukes Hutch Games over loot boxes

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The UK’s Advertising Standards Authority (ASA) has issued a warning to Hutch Games after the video games developer failed to disclose that so-called loot boxes were featured in two of its mobile racing games.

Two complaints were raised with the ASA over Hutch Games. Both cases were highlighted by an academic researcher in game regulation. Leon Xiao from the Centre for Digital Play at the IT University of Copenhagen confirmed to iGB that he submitted both complaints.

The first complaint related to F1 Clash – Car Racing Manager, a game in the Apple app store in May 2023. Accompanying text states the game was free to download but some in-game items can be purchased with real money.

The complainant criticised the listing for not making clear the game also contained random item purchasing. More commonly known as loot boxes, these features allow players to unlock random in-game items in exchange for real money.

Hutch Games misinterpreted advertising guidance

In response, Hutch Games said users could progress in the game regardless of whether they decided to spend money. As such, it did not believe material information was omitted from the ad that prevented consumers from making an informed decision on whether to download the game.

Hutch Games referenced CAP guidance on advertising in-game purchases. These state if virtual currency can be earned in the game, then in-game storefront and any inducement to purchase items would not be considered advertising. As the in-game Bucks currency could be earned as well as purchased, it believed the CAP code did not apply to the ad.

However, after being notified of the complaint, Hutch Games said it understood that it had misinterpreted the CAP guidance. As such, it will update the product listing on the Apple app store.

ASA says ad misleadingly omitted material information

Ruling on the case, the ASA noted the argument that in-game currency could be earned as well as purchased. However, it said this distinction only applied to in-game storefronts and inducements to purchase items within a game.

“We further understood that product listings on app stores were within the scope of the CAP code, regardless of whether any virtual currency could be earned in the game,” the ASA said.

The ASA also referred to the reference to in-game purchases in the advert. It said no further information was given on the nature of those in-app purchases or whether it was possible to purchase loot boxes in the game. 

“We therefore considered the information in the ad was not sufficient for consumers to understand that the in-game purchases included loot boxes,” the ASA said. “Because the ad did not make clear that the game contained loot boxes, which we considered was material to consumers’ decisions to download the game, we concluded that the ad misleadingly omitted material information.”

The ASA ruled the ad breached CAP code (edition 12) rules 3.1 and 3.3 over misleading advertising. As such, the ASA said the ad must not appear again in its current form. It also told Hutch Games to make clear if other games contain loot boxes.

Similar ruling in second loot box case

Looking at the second complaint, this was very similar in nature. A case was raised for Rebel Racing and that the advert failed to disclose that loot boxes featured in the game.

Hutch Games put forward almost identical arguments in that players can progress with or without spending real money. It also said the Keys in-game currency could be earned as well as purchased. 

However, it again said it had misinterpreted CAP guidance on adverts in-game purchases.

The ASA reached a similar conclusion. It acknowledged Hutch Games’ statements but also flagged a lack of information in the advert over the nature of in-app purchases or whether it was possible to purchase loot boxes in the game.

“Because the ad did not make clear that the game contained loot boxes, which we considered was material to consumers’ decisions to download the game, we concluded that the ad misleadingly omitted material information,” the ASA said.

The ASA added the ad must not appear again in its current form. In addition, it said Hutch Games must make clear if other games contain loot boxes.

“Following discussions with the ASA, we acknowledge that a mistake was made on our store page listing for our games Rebel Racing on the Google Play Store and F1 Clash on the Apple App Store,” said a Hutch spokesperson.

“We have immediately corrected this mistake. We are ensuring that all future listings contain the correct information going forward.”

Much has been said and written about the apparent relationship between loot boxes and gambling. Concerns have been raised about featuring an element of gambling – exchanging money for a random item – in video games that are played by children.

In July, UK Interactive Entertainment (Ukie), the UK’s games industry trade body, published guidelines on the provision of loot boxes, in which it has recommended age-restricting loot boxes to over-18s.

Ukie’s guidelines came as a result of the technical working group. This was set up in July 2022 by the department for culture, media and sport (DCMS).

The group was created in response to the government releasing its findings from a call to evidence regarding loot boxes. This launched in September 2020.

Loot boxes have also caused a stir in other markets. This week’s Federal Congress on Gaming and Gambling in Germany will discuss these and a range of other issues. Robert Hess from Gluecksspielwesen.de last week summarised the current stance on loot boxes.

WestLotto, North-Rhine Westphalia’s state lottery, also recently called for discussions with politicians, scientists and industry stakeholders about loot box regulations.

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