A report has been published in the wake of UK's Department of Digital, Culture, Media and Sport's select committee into immersive and addictive technologies.
In it, MPs say that loot boxes should not be sold to children, with the report suggesting that in-game items should be earned through play. Furthermore, the select committee - chaired by Damian Collins MP (pictured) - has said that the UK Government should be working with European age-rating body PEGI to inform consumers of products featuring loot boxes and that legislation should be brought under the Gambling Act 2005 saying that loot boxes are in fact a game of chance.
In the past - and at the DCMS select committee - the UK Gambling Commission has said that loot boxes do not constitute gambling.
"We recommend that loot boxes that contain the element of chance should not be sold to children playing games, and instead in-game credits should be earned through rewards won through playing the games," the report read.
"In the absence of research which proves that no harm is being done by exposing children to gambling through the purchasing of loot boxes then we believe the precautionary principle should apply and they are not permitted in games played by children until the evidence proves otherwise."
It continued later, discussing the problematic elements of loot boxes: "Loot box mechanics are integral to major games companies’ revenues and evidence that they facilitate profiting from problem gamblers should be of serious concern to the industry. We recommend that working through the PEGI Council and all other relevant channels, the UK Government advises PEGI to apply the existing ‘gambling’ content labelling, and corresponding age limits, to games containing loot boxes that can be purchased for real-world money and do not reveal their contents before purchase."
DCMS also appears to have been frustrated with some of the games companies that came before the select committee, with the report being rather damning about their lack of co-operation.
"Having struggled to get clear answers and useful information from companies across the games industry in particular," wrote DCMS.
"We hope that our inquiry and this report serve to focus all in the industry – particularly large, multinational companies whose games are played all over the world – on their responsibilities to protect their players from potential harms and to observe the relevant legal and regulatory frameworks in all countries their products reach."
Later, the report shows irritation about companies in the industry not sharing useful data about how people actually play their games.
"Although the vast majority of people who play games find it a positive experience, the minority who struggle to maintain control over how much they are playing experience serious consequences for them and their loved ones," the DCMS report said.
"At present, the games industry has not sufficiently accepted responsibility for either understanding or preventing this harm. Moreover, both policy-making and potential industry interventions are being hindered by a lack of robust evidence, which in part stems from companies’ unwillingness to share data about patterns of play."
The DCMS select committee also says that the games industry isn't taking its self-regulation of age ratings seriously enough, too. MPs found that there were "inconsistencies" with how titles are distributed and how they are rated, going on to recommend that the Video Recordings Act be altered to make online titles subject to enforceable age ratings.
"There are inconsistencies in the games industry’s self-regulation around the distribution of games," the report said.
"If companies hold that it is not their responsibility, but that of parents, to enforce age ratings, and parents themselves are not willing or able to do so, further legislation may be needed to protect children from playing games that are not appropriate for their age. This could include extending the statutory duties that apply to physical distribution to the online distribution of games. Likewise, games companies should not assume that the responsibility to enforce age-ratings applies exclusively to the main delivery platforms: all companies and platforms that are making games available online should uphold the highest standards of enforcing age ratings. The Video Recordings Act should be amended to ensure that online games are covered by the same enforceable age restrictions as games sold on disks."
Following the report's publication at midnight, the CEO of UK video games trade body UKIE Dr Jo Twist OBE said that it will be looking over the suggestions made in this report and that it will be continuing to engage with the relevant parties.
“The video games industry has always, and will continue to, put the welfare of players at the heart of what we do. We will review these recommendations with utmost seriousness and consult with the industry on how we demonstrate further our commitment to player safety - especially concerning minors and vulnerable people," she said.
"It is important that we keep engaging constructively with a range of stakeholders, including MPs, regulators and law enforcement agencies because we support an evidence-based approach to modern policymaking. We have consistently been in dialogue with government and other key partners about establishing an appropriate research framework and will continue to do so.
"We are pleased the Committee acknowledges that the majority of people play video games in a positive, safe and responsible way. The industry does not dispute that, for a minority, finding balance is a problem. This is why we are vocal in supporting efforts to increase digital literacy and work with schools and carers on education programmes.
"We also welcome the Committee’s recognition of good practice, which already exists in the industry, including pioneering community management and technical measures which ensure players have a safe experience online.
"The discussion around age ratings is actively ongoing and the system is continually reviewed. Changes have already been made including the introduction of an in-game purchase description label and as technology evolves so will the robust process by which it is reviewed and rated.”