EU to ‘curb predatory monetization’ of games and ban sale of in-game currency to children

European regulators have targeted in-game monetization as part of their fight against “predatory gaming practices.” They believe that in-game currencies are primarily used to manipulate and deceive customers. The European Consumer Protection Network (CPCN) claims that many companies hide the actual cost of in-game products by listing them in the game’s virtual currency, making it extremely difficult to understand the real cost of a purchase.

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Recently, CPCN demanded that the European Commission “curb the predatory monetization” of the gaming company Star Stable Entertainment, the creator of the MMORPG/horse simulator Star Stable Online. CPCN demands that the game developer be more transparent about the actual costs of in-game purchases. CPCN believes that it is necessary to introduce a soft ban on in-game currency, since no current law prohibits it.

Like many other game developers, Star Stable hides the actual cost of in-game products by using the game’s virtual currency for calculations. The problem is that in-game finances do not convert one-to-one into euros. In fact, this monetization model intentionally makes currency conversion almost impossible. Star Stable Online’s target audience is young players, but even adults will have a hard time calculating how much a particular game item costs in real money.

CPCN noted several areas that pose particular risks, especially for children:

• Direct appeals to children in advertising, urging them to buy or persuading adults to buy in-game currency or items for them.
• Using pressure techniques such as “purchase through time-limited practices” to improperly influence children to purchase in-game virtual currency or in-game content.
• Lack of clear, transparent, and child-friendly information about purchasing and using in-game virtual currency, resulting in consumers spending more than they intended.
• The company’s failure to ensure that influencers promoting their products clearly disclose commercial content and do not inappropriately influence children with their marketing practices.

The marketing ploys listed above are quite common and affect both adults and children equally. The only difference is that adults spend their own money (or credit), not their parents’ money.

The CPCN stressed the need to adapt video games and their commercial practices to children and not to exploit their vulnerabilities. Guidelines for all game developers have been published. The proposed framework generally focuses on transparency. A game offering a product or service in virtual currency must include an “objective” price in euros without a discount.

CPCN calls on developers to stop the practice of selling coins in fixed amounts, which results in players having unused balances of in-game currency in their accounts. This tactic psychologically manipulates players into buying more coins to maintain this positive balance in the in-game account.

Similar issues have been reported in the United States for years. In January, the Consumer Financial Protection Bureau proposed extending real-world banking rules to in-game currency accounts, allowing players to transfer money in and out of their in-game accounts. However, the proposal was not supported, so the situation with in-game purchases remains unresolved.