The Norwegian Consumer Council has teamed up with nearly two dozen other consumer protection agencies to call for mass regulation of the billion-dollar virtual currency market.
Gaming currently is, and has been for quite some time, ruled by microtransactions. Sony makes more money from microtransactions than it does actual game sales. The same may be true for Xbox. Publishers like Electronic Arts, Take-Two Interactive, and Activision-Blizzard all make most of their earnings from in-game spending. And most of--if not all--these games have their own virtual currencies that've been carved up deliberately to maximize spending.
Publishers have employed tactics in order to create the illusion of bonus value when it comes to virtual currencies, often pricing alluring in-game items such as weapons and cosmetic skins in such a way that it requires consumers to make multiple purchases of virtual currencies. Alongside 17 other countries, the Norwegian Consumer Council has created an illuminating 55-page report that delves into the specifics of virtual currencies, and alleges that the practice may be illegal in its current form.
The report takes a closer look at multiple billion-dollar live service games, including Rainbow Six Siege, Minecraft, Apex Legends, and EA FC 24.
On september 12th 2024 The Norwegian Consumer Council, together with 21 consumer organizations from 17 countries, submitted a complaint to EU authorities on the unfair practices of leading video game companies, behind games such as Fortnite, EA Sports FC 24, Minecraft and Clash of Clans.
Our analysis concludes that traders breach EU consumer protection laws. We call on authorities to ensure that traders play by the rules and provide consumers with safe gaming environments.
The commission says that a lot of these games "create a layer of abstraction that creates distance between the actual spending of real money from the action of obtaining the in-game item."
We've included some interesting quotes from the report, one revealing snippet about how these psychological tactics can lead to gambling habits:
- By moving the player's purchase away from actual monetary value, premium virtual currencies reduce the so-called "pain of paying" for consumers, lowering the threshold for spending money.
- The reduced "pain of paying" is documented by recent experiments that revealed that the use of types of virtual currencies increased consumer ingame spending. Other studies have shown that using currencies (e.g., chips in gambling) instead of real-world currency is associated with overspending but also gambling problems. In the video game sector, testing revealed that 92.3% of players who experienced a simulation of video games and who made in-game purchases via virtual currencies and real currencies stated that it was more painful to pay in a real currency compared to a virtual currency.
Check the full report here.