Microtransactions are misleading, says European Union

In-game purchases have become one of the most lucrative forms of microtransactions today, especially in successful titles, generating more than US$50 billion annually globally.

However, this practice, known as in-game purchases, is at the center of an intense debate in Europe, with consumer advocacy groups warning about the impact of these transactions, especially on children.

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European Commission supports European Consumer Organisation document

The European Consumer Organisation (BEUC), with the support of the European Commission and the European Network of Consumer Authorities, recently filed a formal complaint against practices that it considers “unfair” and “misleading” in this area.

According to the EU’s 36-page document, they are alleging that game publishers are deliberately misleading consumers, especially children, into spending money without being clear about the actual costs. The complaint involves 17 countries and targets popular games such as Fortnite, Clash of Clans, Minecraft and EA Sports FC 24.

The accusation mainly involves marketing tactics that can be misinterpreted and induce the public to spend money within the game, focused on the mobile environment. The document addresses what would be “harmful commercial practices” involving loot boxes, or misleading design and even aggressive marketing.

The problem of microtransactions with virtual currencies

The main concern raised by BEUC is the difficulty consumers face in understanding the real cost of items purchased in-game through microtransactions. According to the organization, many players, especially younger ones, end up spending more than they should because they cannot clearly identify the monetary value of virtual currencies.

This is because game items usually have a value given in the game’s currency, which in turn is purchased with real currency. In this way, the real value of the items ends up being “camouflaged”.

Studies show that under-18s, for example, spend an average of €39 per month on in-game purchases.

BEUC also warns that children are particularly vulnerable to these practices, as they do not have a keen financial understanding. This creates a problem, as games are widely accessed by young people. According to a 2023 European Parliament report, 84% of young people aged 11 to 14 play video games, mainly on mobile devices.

Proposals for regulation

BEUC has made a series of recommendations to European regulators, aiming to bring more transparency into in-game purchasing practices and better protections for consumers, especially children. Key suggestions include:

• Ban on Virtual Currencies: BEUC suggests a complete ban on in-game currency payments, based on the findings of the Digital Fairness Fitness Check.
• Stricter Age Rating: Include in-game purchases as a determining factor for the age rating of games, restricting access to those under 18 years of age.
• Price Transparency: Require games to clearly indicate the actual cost of each item, without consumers having to convert virtual currencies.

Video Games Europe’s response

The response from video game companies was immediate but defensive. Video Games Europe, the organization that represents the continent’s biggest game publishers, hit back at BEUC’s allegations, saying that buying virtual currencies is a well-established practice that is understood by gamers.

According to the organization, developers strictly follow consumer protection laws in Europe and promote transparency in transactions. In addition, the organization highlighted that many games offer free versions, allowing players to try out before committing financially.

Despite these defenses, BEUC believes that there is still much to be done. For Agustín Reyna, the organization’s general director, “the online world brings new challenges for consumer protection” and it should not be a place where companies “bend the rules to increase their profits.”

He adds that players shouldn’t need a calculator to understand how much they’re spending, and that companies should be more transparent about the real value of their virtual currencies.

The impact on children

One of BEUC’s biggest concerns is the impact of these practices on children and teenagers, who are heavy consumers of video games but have less ability to manage their money. This, combined with the constant pressure to acquire virtual items, often necessary to advance in the game, creates a scenario conducive to excessive and uncontrolled spending on microtransactions.

BEUC has been involved in previous battles related to virtual currencies, such as in 2021, when it filed a complaint against TikTok for similar practices. Although TikTok has pledged to make its transactions more transparent, the organization remains unhappy with the changes, and is now broadening its focus to the entire video game industry.

Fontes: techcrunch, gamespot