Bottom line: Regulators in Europe are once again trying to crack down on predatory gaming practices. This time, they have set their sights on in-game currencies. It is the EU's stance that in-game currencies are primarily used to manipulate and deceive customers to continue buying, and they aren't wrong.
Europe's Consumer Protection Cooperation Network (CPCN) has initiated an enforcement action with the European Commission (EC) to reign in the predatory monetization of a gaming company called Star Stable Entertainment, maker of the MMORPG/horse simulation "Star Stable Online." The CPCN aims to force the developer to be more transparent about the actual costs of in-game purchases. It's asking for a soft ban on in-game currency since no formal laws explicitly prohibit it.
Like many other game companies, Star Stable obfuscates the actual cost of in-game products by listing them in the game's virtual currency, "star coins." The problem is that star coins aren't a one-to-one conversion to euros. In fact, this monetization model intentionally makes currency conversion practically impossible. It does this through bundled coin packages sold at a "discount." Star Stable Online's target demographic is young players, but even adults would have difficulty confirming exactly how much a purchase costs them.
The CPCN's action stems from a Swedish Consumers' Association complaint. After investigating, the CPCN noted several areas that appear predatory, especially toward children. These include:
- Direct appeals to children in the advertisements, urging them to buy, or persuade adults to buy for them, in-game currency or items.
- The use of pressuring techniques such as 'purchase through time-limited practices' to unduly influence children to purchase in-game virtual currency or in-game content.
- A lack of clear and transparent information, adapted to children, about buying and using in-game virtual currency, leading consumers to spend more than they intend to.
- Failure by the company to ensure that the influencers promoting their products clearly disclose commercial content and do not unduly influence children with their marketing techniques.
These marketing gimmicks are relatively common and work just as well against adults as with children. The sole difference is that adults spend their money (or credit) instead of their parents' funds. Both organizations are asking the company to be more transparent about the commercial purchases children may encounter in the game.
They have asked Star Stable to respond to their requests within one month. As mentioned, the predatory monetization is not strictly prohibited. However, the CPCN said it would take "further action" if the company did not provide commitments and specific remedies to comply.
"With this action, the CPC Network emphasizes the need for video games and their commercial practices to be adapted to children and to not exploit their vulnerabilities," the press release read.
However, the CPCN's goals do not stop at Star Stable. With the EC's help, it has published guidelines for all game developers to follow. The proposed framework generally focuses on transparency. A game listing a product or service in virtual currency should include the "objective" price in undiscounted euros.
The guidelines also ask developers to end the predatory practice of selling coins in bundles and then pricing virtual goods so that it leaves a perpetual balance on players' accounts. This tactic psychologically manipulates players into purchasing more coins to avoid wasting their remaining balance.
Similar actions have been brewing in the US for years. The latest was a rule proposed in January by the Consumer Financial Protection Bureau that looked to extend real-world banking rules to in-game currency accounts. It would allow players to transfer cash into and out of their gaming accounts. However, we have seen proposed remedies for predatory game marketing come and go in the US without much getting done.
It will be interesting to see how Star Stable responds and whether this action will affect other game makers. This enforcement action doesn't seem to have enough teeth for effective change, so we'll have to see what "further actions" the CPCN has in mind.
European watchdogs demand game companies stop predatory virtual currency sales to children
