Report on virtual currencies in gaming: Getting played

Virtual currencies in the form of in-game currencies are part of an in-game economy. In-game currencies have various forms and can be earned by playing the game and purchased with real-world money. Currencies earned by playing the game do not entail most of the problematic issues outlined in this report and are often a benign aspect of immersion in a video game world. The problematic aspects of virtual in-game currencies arise from the use of money to purchase virtual in-game currency.

In this report, we focus on the premium in-game currencies. Research highlights that spending real money on in-game items is, contrary to the rational of the industry, rather disliked by consumers. But video game companies add these virtual currency traps, which mislead gamers, hide the real costs of in-game purchases and lead them to spend even more money.   

With the introduction of premium virtual currencies, video game companies have essentially been able to design in-game monetary systems where they set all the terms, where they can change the values at any time, and the consumer has no property rights. This is deeply problematic, because it deprives consumers of rights that would be in place if they were spending real-world money.

Using premium currencies as an intermediary step between the consumer and the in-game purchase is a practice that only benefits the video game company, while introducing various problems for the consumer. It can become difficult to keep track of how much money one is spending, it is often impossible to receive a refund, and video games are often designed to push consumers to spend as much as possible. While it is not inherently problematic that consumers spend money in video games, this report aims to address the particularly problematic aspects of premium virtual currencies and argues that this practice should cease to exist.

The crux of this report is that virtual in-game currencies purchased with real money are actively detrimental and harmful to consumers while providing no benefits to them. This applies to the video game industry and other digital services, such as social media platforms and streaming services. While this report focuses on the video game industry, the practices and recommendations described here also apply to digital marketplaces in general.

The issues highlighted in this report call for quick and decisive action from lawmakers to protect consumers from potential and ongoing consumer harm. We offer the following recommendations to regulate the use of in-game and in-app premium virtual currencies and to better enforce existing EU legislation in the video game and platform sectors.

We believe that the following new consumer policies on video games are needed:

• A ban must be instituted on the sale of premium virtual currencies in video games.
• Consumer protection must be implemented by stipulating how the default settings in games and digital services should be, for example by disabling mechanisms meant to push consumers into spending money.
• A ban must be instituted on hidden algorithmically driven systems in video games that aims to influence the economic behavior of consumers.
• Regulators must enforce current consumer law to eradicate illegal practices in the video game industry.

If a ban is not considered, European consumer law should establish strict transparency requirements. This should consist of the following:

• Developers must be obligated to provide an equivalence in real currency clearly and transparently next to the premium virtual currency before each transaction.
• Amend the Consumer Rights Directive to clarify that a right of withdrawal applies also when buying virtual items, including premium virtual currencies.
• Consumers should be allowed to choose the amount of virtual currency they wish to buy.

Other policies should also be considered:

• If in-game and in-app premium currencies remain authorized, the Commission should conduct a behavioral study as part of the Digital Fairness Fitness Check.
• Restrict how consumers are automatically redirected to the “in-game” shop of virtual currency.
• Ban the use of paywall design in video games.
• Separate the different types of (premium) virtual currencies to ensure that consumers fully understand how much they spend in games.
• Ban in-game advertising for premium virtual currency in games played by people under 18.