In-Game Purchase Regulations

Mike Leslie
April 07, 2024

The United States Consumer Financial Protection Bureau (CFPB) report states that online video games and virtual worlds are similar to traditional banking but lack federal protections.

Inputs that matter: In its "Banking in video games and virtual worlds" report, released on Thursday, April 4, the consumer protection agency highlights gaming creators who bridge virtual items to reality.

  • CFPB Director Rohit Chopra highlighted the increasing trend of Americans converting billions of dollars into digital currencies for gaming.
  • With banking and payments shifting to virtual realms, the CFPB said it aims to safeguard consumers from fraud and scams.

The opportunity: The CFPB has shifted its focus toward cryptocurrencies, introducing a proposed rule titled "Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications."

  • According to the CFPB, "Gaming assets are stored on a player's accounts and used as a medium of exchange for all sorts of transactions within these worlds, including the purchase of goods and services and person-to-person ("P2P") transfers."
  • The report explains that the CFPB "is monitoring markets—regardless of the infrastructure used—where financial products and services may be offered, including video games and virtual worlds."

Zoom in: Most games have their currency for in-game purchases, including:

  • Robux is the in-game currency for Roblox.
  • V-Bucks is the currency used in the popular game Fortnite.
  • Minecraft players can use Minecoins for in-game purchases.
  • The currencies are purchased with real money, and there are exchange rates for them. Rates fluctuate, but in July 2023, $10 was equal to around 800 Robux, 1,252 V-Bucks, and 1,700 Minecoins.

Between the lines: Unlike cryptocurrencies, these gaming assets are not decentralized and are designed to function only within the gaming platform.

  • Gaming companies use behavioral psychology to manipulate users into spending, says Prof Sarah Mills, and the link between gaming and gambling is becoming "increasingly blurred," she explains.

Follow the money: The video game industry generated 197 billion U.S. dollars in 2023, most of that coming from in-game purchases.

  • Oslomet reports, "Almost all children and teenagers play video games, making it a crucial social meeting place."
  • "There's no sharp distinction between their online and offline world."

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