Children and young people are at risk of financial and emotional harm from in-game purchases, new research shows.

In the report “Between Gaming and Gambling: Children, Young People, and Paid Reward Systems in Games,” academics from Newcastle and Loughborough Universities found there are risks for young video game players who make in-game purchases, such as buying a loot box or battle pass.

Loot boxes are features in video games which are accessed through gameplay, or purchased with in-game items, virtual currencies, or directly with real-world money. They often appear as virtual treasure chests, crates, or card packs and contain highly collectible items such as skins (a graphic download which changes the appearance of characters in video games) or weapons.

The report’s lead author Dr. James Ash, Reader in Technology, Space and Society at Newcastle University said, “Children and young people are spending increasing amounts of time and money on gaming. Our research demonstrates the dangers of in-game purchasing, especially when game developers actively use techniques drawn from gambling to encourage children and young people to buy in-game items.”

The experts’ findings include:

• In-game purchases such as loot boxes cause financial and emotional harm to children and young people.
• Children find it difficult to track their spending in-games and fail to understand the value of money, leading to poor spending decisions.
• Digital items are highly desirable and collectible, driving repeat buying.
• Games use gambling techniques to make players game for longer and spend more money.
• Gaming can be manipulated in ways the player is unaware of to encourage them to spend money. This leads to poor purchasing decisions, especially for children and young people.

The academics say there are ways the industry and Government could make improvements to protect children and young people and they make four main recommendations.

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They have called for:

• A new independent regulator for the gaming industry
• Loot boxes and other chance-based mechanisms should be restricted to over 18s.
• In-game currencies should be turned into local currency—e.g., pounds, euros, dollars, etc.

Hidden pressures

Dr. Sarah Mills, Reader in Human Geography at Loughborough University said, “Parents and caregivers feel stuck in a vulnerable position. They want to safeguard their children from potential harm and risks but are under pressure because of the popularity of digital games, especially within friendship groups both on and off the playground. This research shines a light on some hidden pressures within households that impact the lives of children, young people and families.”

YGAM is an award-winning education charity that delivers a portfolio of education programs to help safeguard children and young people against gaming and gambling harms.

Kev Clelland, Director of Insight and Engagement at YGAM, said, “We’re seeing more parents, teachers and others who work with young people becoming increasingly concerned about some of the chance-based mechanisms used in video games. In 2022, you will struggle to find a young person who does not game. These findings further emphasize the need for more awareness and understanding on these topics and education programs like ours have an important role to play.”

The team spoke to 42 North East families multiple times between August 2019 and February 2022. Children and young people who took part in the research were aged between 5 and 17. They showed the researchers the games they liked to play and talked about their experiences of gaming and in-game spending.

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