Global Loot Box Regulations: A Year in Review

As we approach the end of the year, it's time to take stock of the current state of loot box regulations around the globe. This year has seen significant developments, from Brazil's ban on loot boxes for minors to the US Federal Trade Commission's settlement with Cognosphere, the distributor of Genshin Impact. In this article, we'll break down the key updates and what they mean for the gaming industry. The US Federal Trade Commission's regulatory settlement with Cognosphere has set a precedent for the industry, with the company agreeing to pay a $20 million fine and make changes to its game and monetization design. The alleged violations included misrepresenting winning probabilities, paying a streamer to release a doctored loot box opening video, and using multiple virtual currency exchanges to confuse children. In response, Cognosphere has agreed to prohibit under-16s from purchasing loot boxes without parental consent, disclose accurate probabilities and costs on the loot box purchase screen, and provide clear information about virtual currency purchases. Meanwhile, in Brazil, a new youth online protection law has been adopted, which includes a ban on loot boxes in games aimed at or likely to be accessed by children and teenagers. The ban is set to take effect in March 2026, but the implementation details are still unclear. In Australia, games with in-game purchases linked to elements of chance must be rated at least M, and companies have been given little time to comply with the new policy. The European Commission has also been active, publishing guidelines on the protection of minors and consulting on the forthcoming Digital Fairness Act, which is expected to contain provisions relating to video game regulation. The Dutch advertising self-regulator has published a ruling against MY.GAMES, confirming that loot box presence must be disclosed on the app store product page, and that probabilities of obtaining different rewards must be disclosed. In the UK, the implementation of industry self-regulatory principles has been poor, with low compliance and little enforcement. The Advertising Standards Authority has published rulings relating to loot boxes, confirming that a loot box presence disclosure is required on app store product listings, and that probabilities of winning different prizes must not be presented misleadingly. South Korea has explicitly required loot box probabilities since March 2023, and any advertising of games with loot boxes must use a specific Korean phrase to disclose their presence. The Turkish regulator has found that the advertising of physical mystery boxes on Instagram was unlawful, and this has implications for loot boxes under Turkish regulations. The International Consumer Protection and Enforcement Network has published the results of an international study examining manipulative design practices in video games, and companies are advised to seek independent legal advice to avoid future headaches.