The Advertising Standards Authority (ASA) is a self-regulatory organization in the United Kingdom responsible for regulating the content of advertisements and enforcing the UK Code of Non-broadcast Advertising, Sales Promotion, and Direct Marketing (CAP) and the UK Code of Broadcast Advertising (BCAP). Concerned by the predatory nature of certain mobile games, the ASA mandated that advertisements for these games fully disclose the presence of in-game purchases and loot boxes. While not a law passed by legislation, the ASA requires that mobile games represent their games more accurately, especially when profiting from said loot boxes.

Loot boxes are essentially virtual prizes that only reveal their contents through gameplay or by making literal payments. The results of loot boxes can range from desirable and rare, to common and essentially useless. Loot boxes often encourage players to pay money again and again, for the chance at a major reward. Certain studies have claimed that loot boxes are a form of gambling and can cause negative developmental effects in children, who are often the game’s desired audience. A 2021 report, carried out by researchers at the universities of Plymouth and Wolverhampton, found that “of the 93% of children who play video games, up to 40% opened loot boxes.” Of these loot boxes, 5% of gamers generate half of the entire resulting revenue. The authors of said report went on to claim that loot boxes should be treated as another form of gambling by regulators.

Many gamers do ascribe discrete financial values to loot box contents – based on purchase or resale price – suggesting that many loot boxes meet existing criteria for gambling regulation.

A recent report published by the British Broadcasting Corporation (BBC) found that only two out of the top 45 highest grossing mobile games on the Google Play Store included the presence of loot boxes in their advertisements. In reality, 26 of these top games did use loot boxes, meaning that 24 of them were in violation of the regulations enforced by the ASA. A video game regulation researcher at the IT University of Copenhagen named Leon Y Xiao, claimed that BBC’s findings were in line with the preliminary results of his own research, which found that “around 90% of games containing loot boxes are not disclosing this in their ads.”

Dr Jane Rigbye, chief executive of Young Gamers & Gamblers Education Trust (YGAM), expressed concern in relation to BBC’s recent findings. She claimed that since the gaming industry currently lacks strong enough regulation, “it is essential for games to provide clear and transparent information about their features.” Doing so will allow parents and their children along with gamers to “make informed decisions.”

The ASA also responded to the BBC investigation, stating that “this is an ongoing area of [their] work, and [they’re] closely monitoring the sector to discover the scale of compliance and act accordingly.” Despite seemingly agreeing that the current widespread lack of transparency is an issue to be solved, researcher Xiao believes that the organization has not taken enough action against these violations.

The ASA, although it has upheld some complaints, it takes so long to properly process all of these things – they will go to a company and say, ‘you should comply’, but they don’t comply. People are walking into a video game not knowing the potential risks, and this is assuming that people have even understood the risk of loot boxes to begin with.

The highest-grossing game of those that contained loot boxes on the Google Play Store, Monopoly GO!, also failed to mention in-game purchases in any of its advertisements. Monopoly GO! has been downloaded more than 50 million times since its release in April 2023. This has generated more than $3 billion in revenue according to the IP’s owner Hasbro. The game has grown popular enough to achieve partnerships with major celebrities, further increasing its influence over players.

With 58% of Android games and 59% of iPhone games containing loot boxes, the ASA’s advertising regulations are of significant impact. Of the aforementioned games, at least 90% of them were deemed suitable for ages twelve and up, with many of them also available to children aged seven and up. If loot boxes are viewed as a form of gambling by researchers and organizations, then these age ranges are indeed concerning.