European Commission's Digital Fairness Act proposes loot box and virtual currency rules for games

The European Commission has published its proposed Digital Fairness Act, which could change how video games are monetised worldwide. The Act is set to become European law, probably sometime between 2028 and 2029, once discussions and amendments are completed. Breaching the regulations could bring fines of up to six percent of a company's worldwide annual turnover, or up to €2m where an annual turnover is not available.

Key rules for video games

The Act mentions video games specifically and includes regulations around loot boxes, described as "variable reward systems" or systems with "uncertainty-based rewards", and virtual currencies, particularly regarding minors, defined as anyone under 18 years old.

The Act stipulates that:

• Paid-for virtual currencies must be disabled in a game by default for minors, then activated by parental and guardian approval.
• Paid loot boxes "shall not" be offered to minors at all.
• Games must provide a way for everyone to disable paid loot boxes completely.
• Games must clearly show the probability of receiving items from paid loot boxes.
• A game must clearly show, in a region's local currency, how much an item costs when bought with virtual currency.

The Act also includes broader provisions affecting subscription services such as Xbox Live, PlayStation Plus and Nintendo Online, making them easier to cancel and less able to obfuscate prices and hidden extras. It also stipulates that people be able to talk to a human in customer service rather than a chat bot.

Industry reaction

Games business expert George Osborn, who runs the Video Games Industry Memo newsletter, described the changes as a "really big" regulatory change. He said companies including EA, Xbox, Activision Blizzard, PlayStation and other big gaming companies in console and mobile gaming will be "really concerned".

Osborn noted that companies need a way to determine who is a minor and must provide "a master switch" for people to switch paid loot boxes off. He said: "EA might be looking at it and going, 'This isn't great news for [EA Sports FC] Ultimate Team because people can switch it off'."

He added that if a company sells a game into the European Union, it will have to comply, and because that market is big enough, companies may design for it globally: "Well, we'll just do this for the rest of the world."

UK trade body response

UK games industry trade body UKIE has warned that the proposed Act could undermine parental choice, increase costs for developers and weaken the UK's games industry. UKIE backed the position of European trade body Video Games Europe.

UKIE said: "We are particularly concerned about undermining parental agency by placing blanket restrictions on certain features, rather than giving parents the ability to make decisions based on individual circumstances."

The organisation also said: "We are also concerned about implications for Europe's competitiveness and constraints on the UK's trade relationship with Europe. Europe needs a regulatory environment that encourages investment, innovation and growth. Introducing broad, ambiguous and unevidenced restrictions risks adding unnecessary compliance costs and making Europe less competitive internationally."

UKIE highlighted the PEGI age-rating system and said: "The video games industry has been proactive in working with Government and regulators to develop effective measures to address player safety, including through the introduction of the PEGI ratings system – recognised by parents worldwide as a gold-standard in age rating for games. If implemented as proposed, the DFA will directly undermine the value and effectiveness of this system."

UKIE urged the UK government to consider the implications carefully and resist an approach that risks limiting player choice, harming parents' ability to choose the right options for their children, creating uncertainty for developers and weakening the UK's export capability.

Why it matters

The European Commission's proposal could reshape game monetisation beyond Europe because companies may adopt a single universal version of their games rather than producing separate versions for different markets. The rules could push loot boxes toward the fringes of video game monetisation, though some companies may find it difficult to move away from models that have supported their business for years.

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Sources

• eurogamer.net: The European Commission's new Digital Fairness Act could change monetisation in games forever - and not just in Europe | Eurogamer.net
• pocketgamer.biz: UKIE warns EU Digital Fairness Act could harm UK games industry and parental choice | PocketGamer.biz

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.