- A new report by the Norwegian Consumer Council has highlighted the predatory nature of virtual currencies in video games
- The report argues that these currencies obscure real-world costs and encourage continuous spending through manipulative design.
- The Council calls for stronger enforcement of EU consumer laws and suggests a potential ban on premium virtual currencies bought with real money
The Norwegian Consumer Council has released a new report which sheds light on how video game companies use premium virtual currencies to exploit players. In “Getting Played: The True Cost of Virtual Currency,” the council reports that these currencies, often purchased with real money, are designed to obscure the true costs of in-game purchases, pushing players, especially children, to spend more than they realize. The report calls for stronger regulations, advocating for a potential ban on these types of currencies to protect consumers.
Predatory Design and Hidden Costs
The report highlights how game companies have created a system where players are encouraged to purchase virtual currencies in bulk, but the currency values often don’t align with in-game purchases, leaving them with leftover amounts. “By moving the player’s purchase away from actual monetary value, premium virtual currencies reduce the so-called ‘pain of paying,’” the report states. This psychological distancing makes it easier for players to continue spending without realizing how much real-world money they are using.
A striking example given in the report is Apex Legends, a popular game where players buy “Apex Coins.” “The price of in-game items is displayed only in the virtual currency,” the report explains, adding that this “creates a layer of abstraction that makes it difficult for players to understand how much real money they are actually spending.” The larger bundles of coins are presented as offering a better deal, which further complicates the player’s ability to gauge the true cost of their in-game purchases.
Targeting Children and Vulnerable Consumers
One of the report’s most alarming findings is how children are disproportionately targeted by these predatory practices. “Games that are free to play appeal to children since the game itself entails no purchase price for the parent,” the Norwegian Consumer Council explains.
The low entry barrier means children are easily lured into games that use aggressive monetization tactics. The report warns that games like Pokémon Go and Minecraft seamlessly transition players into in-game stores when they run out of currency, encouraging children to make additional purchases with little to no awareness of the real financial consequences.
The report also addresses the dangers of loot boxes, which it likens to gambling. “Loot boxes are ‘mystery packages’ containing randomized rewards,” the report explains, “and they are usually purchased using premium virtual currencies.” The randomized nature of the reward entices players, particularly younger ones, to keep buying in hopes of winning a rare item. The Council describes this as “a manipulative practice aimed at encouraging repeated spending,” with children and young people being especially vulnerable to these tactics.
Legal and Regulatory Challenges:
While the report acknowledges that these practices are not necessarily illegal, it argues that they exist in a legal grey area that needs addressing. Current European consumer protection laws, such as the Unfair Commercial Practices Directive (UCPD), do apply to virtual currencies, but the report argues that enforcement has been inconsistent. “Businesses, by using these currencies, deliberately or in effect, disconnect consumers from the awareness that they are spending actual money,” the report states.
One particularly controversial practice highlighted in the report is the “pay-to-win” model, where players can gain competitive advantages by spending real money. In games like Clash of Clans and Fortnite, players who purchase premium currency can progress more quickly than those who don’t, creating an uneven playing field.
The report emphasizes, “This type of game design incentivizes spending to gain in-game advantages, which leads to a ‘race to the bottom’ for consumers and a race to the top for business profits.”
Calls for Stricter Regulation
To combat these practices, the Norwegian Consumer Council advocates for stronger regulatory enforcement. “There is an urgent need for complementary measures to protect consumers in the digital sphere,” the report states, urging policymakers to update consumer protection laws to address the digital economy.
One of the most significant recommendations is a complete ban on premium virtual currencies bought with real money. “Banning the use of premium virtual currencies purchased for real money could be one such solution,” the report proposes, arguing that this would eliminate one of the key drivers of consumer exploitation in video games.
The Council’s call for stricter regulations, including a potential ban on real-money purchases of these currencies, could pave the way for a fairer, more transparent gaming environment. As the report concludes, “While it is not inherently problematic that consumers spend money in video games, the particularly problematic aspects of premium virtual currencies must cease to exist.”
