It doesn't matter whether you call it Battle Points, FC Points, Bloodpoints or COD Points. You can call it Apex Coins, PokéCoins or Minecoins. Label it V-Bucks or Robux if you want. Maybe Credits, R6 Credits, Helix Credits or Super Credits will do? Or keep it simple and go for Silver, Gold, Gold Bars, Gold Eagles, Platinum or Crowns. It doesn't matter what it's called, the European Union is declaring war on this type of in-game digital currency.
This could drastically change the way in which game developers are allowed to offer in-game currency and may have major consequences for how game makers are allowed to make money. And the gaming industry is absolutely not happy about that.
The short version
You probably all know the in-game coins with crazy names that you can buy in varying bundles and at widely varying prices. These coins can then be used for microtransactions. Yes, microtransactions is a bit of a dirty word within the gaming community, but at the same time gamers are also very proud of their unique cosmetics, excessive gestures, time-saving boosters and access to exclusive season and battle passes: it is, sadly, becomming the most normal thing in the world for a modern gamer.
With the new guidelines, the European Union wants to ensure that consumers are not misled when making these everyday in-game purchases. Seven main principles have been drawn up that developers must adhere to. And depending on how you interpret those rules, that will likely have drastic implications for how those in-game stores will look and operate going forward.
The way in which game developers are now allowed to offer in-game currency must change significantly according to the seven new guidelines of the European Commission. No more vague prices and price ratios, no predetermined bundles of coins, no more confusion of different types of currency in one game, no incomprehensible conditions and no gameplay that is designed to exploit the vulnerabilities of certain target groups.
For the time being, many games still seem to be guilty of this. At least, it is ultimately up to the local European supervisors to test whether this is the case. This involves a bit of interpretation, because judges will probably have to consider the exact application in individual cases.
The longer version
As mentioned, the new guidelines consist of seven 'basic principles' with instructions for game makers on how to incorporate the 'digital representation of real-world money' into their game. These principles can be summarised in three main points. Games must provide clear pricing information for in-game content, consumers must be made more aware of their rights regarding in-game purchases and game makers must not develop games to exploit reasonable vulnerabilities of the intended audience.
Below I will go into each of these points in more detail. Please note that these are guidelines. The Consumer Protection Cooperation Network, a collaboration of all European consumer rights authorities, provides advice on 'actions to be taken' and 'practices to be avoided', citing consumer law that would demonstrate this.
Seven drastic guidelines
Clear pricing
Principle 1:
Games that use in-game virtual currency that can be purchased with real money must always price that currency in euros. Content, such as skins or items, must also show a price tag with the real price and possibly one with the digital currency price. Even if the price is paid indirectly, for example if you first exchange premium money for in-game coins that can also be earned in another way. "The prices must indicate what the consumer would pay in full, without applying quantity discounts or other promotions", according to the CPCN.Principle 2:
Game makers must avoid mixing different in-game digital currencies to buy content or services. This also applies to having to exchange virtual currencies multiple times before a purchase is possible.Principle 3:
In-game stores must avoid gamers having to buy more digital currencies than necessary. Bundles with a fixed amount of in-game currency that do not match the price of content or services must be avoided. The document specifically states: "Do not deny consumers the ability to purchase the specific amount of virtual coins", which could mean that bundle contents must match the value of items or an option to choose the exact number of coins.
In this illustration, customers cannot purchase the exact amount of currency required. Also, the purchase price of the in-game currency and the item do not match.
Rights and information
Principle 4:
Game makers must provide consumers with all necessary 'pre-contractual information' when purchasing in-game digital content, including the value of the product purchased, return rights and payment options.Principle 5:
Game companies must honour the right of withdrawal, or the fourteen-day cooling-off period after a purchase. Should customers waive this right, they must give explicit consent to do so. Under this rule, gamers should in principle be able to return unused virtual currency.Principle 6:
Game companies must present contractual information in plain language. The CPCN provides examples of conditions that should be avoided, such as conditions under which companies can 'unfairly' reclaim in-game currency or content, simply remove content or features that have already been paid for, and conditions for the right to change the value of virtual currencies.
Vulnerable customers
Principle 7:
Game makers must 'reasonably' take into account consumers' vulnerabilities and may not develop their game with the intention of exploiting these vulnerabilities or 'unfairly influencing' consumers to make financial decisions. In principle, the CPCN states: "The use of in-game virtual currencies psychologically disconnects all consumers from the realization that it is about spending real money, leading to higher expenditure of real money."
When a vulnerability is exploited, varies per game and per target group. Children are always seen as vulnerable in this context. Games that specifically rely on the spending of 'whales', players who spend excessive amounts of money on a game or microtransactions, are also considered unfair commercial practices. "Whales may suffer from impulse control problems or gambling addictions," according to the organization.
You might assume that adult gamers are simply responsible for their own purchases, but this is a bit more nuanced. Game companies invest heavily in measures to encourage people to play and spend money. That is why the EU wants to imposes a strict duty of care on them to ensure that this is balanced. Game addiction is one thing and to simply say 'you have a responsibility as a player' when it comes to addiction is really too meager."
The guidelines also discourage showing a timer or clock.
Authorities vs. Industry
The new rules would theoretically have enormous consequences for the gaming industry as it is currently set up: the guidelines apply to both existing and future games.
The enforcers
There are two parties that primarily have an interest in this, namely the gaming companies that offer a product in the EU and European legislators and enforcers. The European Commission, the executive branch of the European Union, and the association of consumer rights authorities CPCN worked together to formulate these guidelines and will now enforce them. This action follows an official complaint from the European consumer organization BEUC.
Individual supervisors for each country can impose fines on gaming companies based on these rules. However, the whole story is somewhat more complicated than it seems, because with the publication of the guidelines, not everything has been said in theory. The Key Principles, as the CPCN calls them, are based on existing consumer law and the actual rules have therefore not changed, only their formulation. But because these guidelines are focused on games, the existing laws are suddenly somewhat less subject to interpretation.
The principles are actually based on the existing rules that protect consumers. The chosen formulations therefore also stem from this legislation. In addition, the choice of words is as much as possible in line with the practice of games"
The supervisors now state: "We see that many game makers do not comply with the principles. That is why we are entering into discussions with the sector about how game makers will comply with the rules."
Game companies
It is clear that the game industry does not agree with this: "The guidelines introduce new legal theories and misplaced interpretations of EU consumer law that will cause confusion and disruption among European consumers", according to a joint statement from the European game industry. This statement comes from the partnership between European game industry organisations, led by the European Game Developers Federation (EGDF) and Video Games Europe (VGE).
According to the game industry, the introduction of new guidelines is not necessary at all because 'the optional purchase of in-game currency is well established and well understood by gamers'. According to the organisations, members, or game makers, already comply with European consumer rights.
However, the new wording does introduce new details. The ACM, like the European Commission, will enter into discussions with industry organisations. The regulators say: "That conversation will focus on how the sector will put the Key Principles into practice. So we are focusing on changing the behaviour of game makers, not on changing the Key Principles." The EGDF and VGE state: "We are going to start a thorough legal investigation of the principles." The organisations suggest that game companies already adhere to certain guidelines, including PEGI.