More than half of EU consumers regularly play video games, with the percentage being significantly higher amongst children - 84% of those aged 11-14 play video games. Over the past years, video game companies have evolved business models, one of the main monetisation models being in-game purchases, including the use of in-game currency. Premium virtual currencies are virtual currencies that can be purchased for real money, often in-game or in an app store. It can take different forms such as gems, points, coins, among others.

In 2020, in-game purchases generated more than US$50 billion globally (approx. €46 billion), representing about one-quarter of revenues in the video game market. 

This has led to concerns from some corners that consumers are spending more than they can afford on in-game purchases. The European consumer association BEUC and various national regulators have now made a complaint to the European Commission. They allege: 

• Consumers cannot see the real cost of digital items, leading to overspending: the lack of price transparency of premium in-game currencies and the need to buy extra currency in bundles pushes consumers to spend more. They say that in-game purchases should always be displayed in real money (for example Euro), or at least they should display the equivalence in real-world currency.
• Gamers do not prefer in-game premium currencies and would prefer buying items directly with real money.
• Terms with consumers regarding premium in-game currencies are unfair.
• Children are particularly vulnerable when it comes to in-game purchases because they have limited financial literacy and are easily swayed by virtual currencies. BEUC says that its data shows that children in Europe are spending on average €39 per month on in-game purchases. 

BEUC says that these issues also apply to social media platforms and other marketplaces and calls for better enforcement of the consumer law framework in the video game sector. 

From a UK perspective, in-app purchases have been controversial for many years, with the CMA’s predecessor Office of Fair Trading investigating them over a decade ago. The controversy has not gone away and the OFT’s guidelines are still valid today. Likewise, the European Commission looked at in-app purchases back in 2014. 

More recently, the UK's Advertising Standards Authority updated its guidance about advertising in-app purchases. The guidance explains how advertisers of games with in-game purchasing should ensure that their ads are not misleading, including by:

• Making it easy for consumers to understand how much they are spending on in-game transactions. 
• Making clear, before purchase or download of a game, that a game contains in-game purchases and, if applicable, loot boxes.
• Making clear what content primarily requires extra purchase, where ads for games feature this content.

The CMA has enhanced enforcement powers coming under the Digital Markets, Competition and Consumers Act 2024 which raises the stakes for gaming companies operating in the UK. We would advise that you look at your terms and conditions to ensure that they are balanced, as well as ensuring that customer journeys do not employ online choice architecture to nudge consumers into making transactional decisions that they might not otherwise have made.