League of Legends monetization may soon be in serious trouble

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European regulators have set their consumer-protecting eye of Sauron upon predatory gaming practices, with the focus on in-game currencies and how they can be used to manipulate and deceive consumers.

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The European consumer watchdog Consumer Protection Cooperation Network (CPC) has filed an enforcement action with the European Commission against the gaming company Star Stable Entertainment, the owners of the MMORPG/horse simulation game Star Stable Online. I explain the specifics of the enforcement action in this article, but I will briefly go over them here as the context is important for what could happen in the future.

EU regulators have deemed several areas of Star Stable Online's monetization practices as predatory, such as the in-game currencies not being one-to-one conversions with euros, and its in-game currency being bundled with "discounts" are both techniques to obfuscate the actual cost of in-game products, making it unnecessarily difficult for consumers to know how much real-life money they are actually spending.

The EU regulator has honed in on Star Stable Online's appeal to children, but the problems the EU regulators have with the game are monetization strategies commonly used throughout the gaming industry. If EU regulators ban the use of these techniques in one game, it will set the precedent for them to ban them across all games within their jurisdiction.

The decisions made about Star Stable Online were based on the EU regulators' "Key Principles on in-game virtual currencies," an 8-page document outlining what the regulator intends to implement to create a safer environment for players.

Notably, the following is the foundation for how the EU views virtual currencies in game, "The CPC Network considers in-game virtual currencies as digital representations of real-world monetary value when they serve no purpose other than, or for which other functions are secondary to providing for a method of payment, the purchase of digital content or services in video games (or, where applicable, for the purchase or another in-game virtual currency)."

Examples of this would include Riot Points (RP), V-Bucks, and any other in-game currency that's entire purpose is to serve as a means of accessing additional in-game content. The first principle tackles the lack of information provided to consumers about how much in-game currencies are worth in real-world money.

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An example of companies having to implement this would be providing the value of real-world money next to in-game currency bundles within a store, which, in the game of League of Legends, would be next to RP cost for any skin within the store. Additionally, this rule of having to show real-world values for virtual currencies would apply for converting one virtual currency for another. For example, buying Mythic Essence with Riot Points.

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This principle highlights how games with multiple premium currencies are a practice that should be avoided, especially if the game requires a player to make multiple currency conversions to carry out a purchase.

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Principle 3 could be the biggest offender in monetization strategies video game developers use. The principle states games should avoid "Offering in-game virtual currencies only in bundles mismatching the value of purchasable in-game digital content and services," and, "Denying consumers the possibility to choose the specific amount of in-game virtual currency to be purchased."

An example of this would be trying to purchase a 1350 RP skin in League of Legends and realizing RP bundles are available only in two options: one that is too little to make the purchase, and one that is far too much RP that's needed. The principle would require Riot Games to sell the skin to the player for exactly what it's worth.

Other principles

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