Lootboxes, Apps and Freemium Content: how the gaming industry can safeguard against addictive habits  

24 April 2019, 4-6pm, Jubilee Room 


Introductions from speakers 

Ian Lucas MP welcomed the audience to the seminar, noting the diversity in the room in terms of the different aspects of the video games industry as well as those with experience from the gambling sector.  

Mr Lucas is a member of the Digital, Culture, Media and Sport Select Committee, which looks into a wide range of policy areas affecting the creative industries and technology sector. The Committee’s current Immersive and addictive technologies inquiry is examining the development of immersive technologies such as virtual and augmented reality, and the potential impact these could have in the worlds of sport, entertainment and news. The inquiry will also look at how the addictive nature of some technologies can affect users’ engagement with gaming and social media, particularly amongst younger people. 

He introduced the panel of speakers; Dr Jo Twist OBE, CEO of United Kingdom Interactive Entertainment (Ukie); Shariar Coupal, Director at Advertising Standards Authority; Dr Henrietta Bowden-Jones OBE, Consultant Psychiatrist in Addictions, CNWL NHS Trust and Imperial College London; James Good, former gaming addict; and Lee Willows, Founder and Chief Executive, YGAM. 

Dr Twist opened the event by highlighting the importance of the video gaming industry to the UK’s economy – there are 6.2bn potential players across the world. She emphasised that video games are an excellent pastime which she has personally enjoyed for many years. They represent an opportunity to build communities, take a break from everyday life, and develop creativity by solving puzzles and designing worlds. 

Research shows1 that between 2014 and 2017, employment in the wider digital tech sector increased by 13.2%. Workers in the industry are also more productive by an average of £10,000 per person per annum. In 2017, the industry was worth over £5bn to the British economy, with e-sports and livestreaming becoming one of the fastest-growing leisure activities 

The UK technology sector’s growth is one of the British economy’s strengths. Tech Nation and Ernst & Young report that the digital sector is now worth £184bn, growing twice as fast as the economy as a whole and notes that technology is critical to the UK’s ongoing growth today and in the future. London is second only to Silicon Valley for inbound global connections – tech is a massive export opportunity for us to exploit. Dr. Twist also highlighted that much of the video gaming sector is made up of start-ups that have the agility to push technological innovation boundaries.  

Shariar Coupal introduced the role of the Advertising Standards Authority (ASA) in an increasingly online world: he has seen the number of complaints about adverts skyrocket around social media and online advertising. He highlighted that the percentage of ads seen by children has reduced by around 2% since 2014 However, some ads continue to be   targeted at young people. A recent study by the ASA found that in various social media websites, test avatars claiming to be young people are more likely to be shown advertising than those of adults and teenagers. 

Dr. Bowden-Jones introduced her experience of behavioural addictions and psychiatry.  At Imperial College London, she has specialised in the science of gaming and gambling science. Currently, Dr Bowden-Jones has been undertaking research into better understanding the characteristics of gaming disorder. The condition was recognised by the World Health Organisation in June 2018.  

Dr. Bowden-Jones sees the potential for the world of gaming to be brought on a par with gambling – and sees that a lot of good work is being done in gambling to make it more transparent – could this be done for gaming? 

She said: “Gaming could end up being closed [like gambling] so it is good to start now… let’s [proactively] protect people.” 

James Good, a former gaming addict, now uses his experience to help others suffering from similar conditions. He has been featured on BBC News, national and regional radio, as well as giving evidence to the DCMS Select Committee.  

James explained his personal experience of using livestream services and of suffering from video gaming addiction. “I just thought it was quite normal for me to play games this often.” Later in the seminar he discussed playing video games for streaks of up to 32 hours and said that he would play around 70 hours’ worth of video games a week. He said that around 2-4% possibly suffering from video games addiction: a huge number of people in the 6.2bn players worldwide. 

Finally, Lee Willows, Founder and CEO of YGAM, shared his appreciation to all for joining YGAM’s seminar to discuss such a complex subject, of which our understanding is changing every day.  

Lee’s personal struggles with gambling addiction and mental health were the catalyst to establish YGAM. He showcased how YGAM is keen to deliver quality education, tools, and resources to teachers and peers (increasingly parents and youth workers) on gambling addiction –a condition that has seen an exponential rise over the past 4 years.  

Topics of discussion 


Spending and gambling in video games: why is gaming being linked to gambling? Is it helpful to think of them together?  

The parallels with gambling are apparent, Paul Bellringer, founder of charity GamCare, said: 

“For example, you feel special when you crack a code on a game in the same way that you feel special when you win a gambling game.” 

Dr Twist responded by noting the ambiguity between what constitutes gambling and video gaming. She noted that whilst the industry welcomed guidelines becoming more robust around video gaming, she added a view that the gambling industry is working to develop apps that are designed to look like conventional games that actually serve to be simple casino slot machines and tables. She found this frustrating as these are not real video games, but rather serve as little more than games of chance, rather than skill.   

James Good said that he did some gambling before he got into video games, as well as spending real-world currency after becoming addicted to video games. Even outside this, at school, he claimed to have easily spent 100 days over a 3-year period just playing video games, and that this constituted a similar mindset to gambling for money.  

The power of escapism, the pitfalls of addictive habits 

Questions from the audience included:   

James said that – from his experience – there are things built into the fabric of games, as well as the ways they are marketed, to ensure they are addictive and keep people spending money, he has explored this in writing and having researched articles and speaking to a psychologist. He played a game for 32 hours straight without eating or sleeping: an example of avoiding relationships, responsibilities of coursework, health problems – all a way of escaping.  

YGAM CEO Lee Willows added that, as addicts often don’t know where to turn for help, it is true that wider education is needed. He added that a regulatory body could ensure that video games have triggers built in as well to alert people to stop gaming, where to go when they cannot stop, and how to get help.  

Dr. Bowden-Jones said that she will be publishing findings on early intervention in around two months’ time. Via continuous communication with their player communities, video games companies are able to know when something is not working as it is supposed to – including gaining customer feedback on whether a game design worked well or was enjoyable. 

Dr. Bowden-Jones said that technology has played a big part in keeping people well and abstinent when struggling with gambling – such as banking apps and online assistance, as well as browser extensions and services such as GamBan which have been shown to improve success rates of recovering from gambling addiction. Technology also helps give people the power to make decisions about what is and isn’t good for them. 

Dr Bowden-Jones also pointed out that this kind of technology is available to the wider public and helps to encourage people to learn skills on how to manage their time and enjoyment. 

The audience and panel then discussed whether gaming is a way for people to find success away from the outside world. It was felt that ‘escapism’ is important in life – the cinema, reading and video games play into this.  

However, James found that at university he lacked discipline and spent countless hours playing video games – and the issue was that it was a safety mechanism for him. He noted that in the context of a video game character death or failing a level does not constitute a feeling of genuine failure.  The ability to constantly retry or restart a stage has little baring on how failure or success works in the outside world. 

Dr. Bowden-Jones highlighted that gaming disorder is an addiction, which can be a hereditary trait within families as a propensity to do something compulsively. The rise in understanding of this disorder is reflective of the fact that people have a tendency to get addicted to things and this is a new, sometimes cheap, way to do so. She pointed out that addictions often come paired with mental health troubles which is also passed down through family lines and described the situations that cause mental health difficulties such as trauma. These different pathways will play a part in people wanting to escape from their daily lives into something safer.   

It was discussed that in the gambling industry, some 60% of profits come from a very small proportion of gamblers due to their constant playing as a result of addiction – and that these people have historically been targeted to continue playing. The Centre for Data Ethics & Innovation said that it is interested in investigating how personal data is used for such targeting, if at all, or for personalisation, which Dr Twist indicated is seldom used in mainstream games. 

There was a feeling from the panel that in terms of gaming disorders that there is a need for further evidence and research to identify the disorder more formally, which is something Dr Bowden-Jones has already begun researching. 

Public engagement, education and digital resilience: can the video games industry give evidence and information to academics and educators to help their research and work progress? 

The panel discussed how lootboxes are something that has attracted attention and rightly so as they have been used in a specific way by some companies – but Dr Twist was clear in saying that the video games industry sees their players as a community that they want to protect.  

Dr Twist said the industry has been “sharing messaging” that it understands that taking advantage of their players should not happen like this. The player community is loud and will push back against certain trends. She cited Gamergate as an example of this 

Dr Twist said she felt it was important for all sections of society to use online communities and digital means of communication in order to reach people and that it is the ideal time to arm children, parents and teachers with digital literacy skills.  She added that the role of education in teaching people digital resilience was a continual theme throughout the seminar with attendees keen to ensure that the right information is reaching the right people when they need it.  

Laura Pearson, Head of Corporate Affairs for Lottoland, described work in Gibraltar with YGAM. Teachers said that they were worried about year groups around exam time, as well as more long-term trends of social isolation, and lack of interest in studies. Various interviews showed that children often have a poor understanding of managing money whilst caring more about staying online to play games regardless of wider consequences.   

The project showed that education on video gaming gave parents and teachers the tools to educate children and themselves on things like how to switch off gaming with strangers and disable payment systems.  

The steps toward regulation and self-regulation: How do we avoid a reactionary regulatory system that limits innovation, creativity, gaming enjoyment?  

Other matters raised by the audience included: 

It was highlighted several times that the authorities should take care not to broad-brush the gaming industry and their products as all having the same characteristics, approach to building games, and purpose.  

Dr. Twist pointed out that it is the action of a minority that is undermining a wider industry which often helps people feel connected and deal with their mental health struggles, practice life, to build cognitive and social skills, critical thinking, failing and rebuilding.  

Chair, Ian Lucas MP, said there is a contemporary difficulty of playing catch up – a lot of businesses have made a lot of money but regulators and politicians want to be abreast of technological and social change to ensure it is done properly and they can societally support people.  

Regulation in advertising and marketing:  

Shariar Coupal said that there is little evidence for problematic advertising of games from the advertising sector. Responding, Dr. Twist said she has experienced examples of gambling being passed off like games to slip under the regulatory radar. Adverts that suggest the gambler is in control are in violation of advertising regulations. However, Ukie and the ASA are presently arranging to meet and discuss this issue so that stronger guidelines can be followed and enforced.  

The video games industry can show its track record of constructive dialogue with regulators, for example it has helped come up with guidelines with the DMA on direct exploitation of mobile games for children.  

Additionally, the Pan European Game Information (PEGI) age rating and age verification scheme which applies widely across the sector to reduce exposure to adult themes  

Dr. Twist cited research on 2,000 young people from 10-18 years old on restricting screen time which revealed that 19% of students said their parents actually set limits on time spent online/in games and enforced it. 39% said no limits were set by parents. 30% said that limits were set but never enforced.  

The audience discussed that social media advertising, paid products,  declaring sponsored or gifted products have all been regulated by ASA on social media platforms such as Instagram and Twitter There was a discussion as to whether such regulations be applicable for games demonstrated on livestreaming sites such as Twitch and by vloggers on website such as YouTube.  

Shariar Coupal said that the vlogger phenomenon represents another example of regulators struggling to keep up with technological change. In such a case, it is not the technology itself that they are keeping on top of but the way marketers and influencers use the technology to showcase and sell products. For example, there are numerous examples of social media figures not declaring where promoted products such as headphones come from – this often includes newly released video games. The CMA now allows regulators to enforce legal restrictions on such behaviour and it is recognised as a growing problem across a range of sectors, such as slimming products, cosmetics marketing and others.   

Dr Twist says that games companies want to comply with the law. However, such a desire is made more difficult with the international nature of online communities and depends on where contracts are based for marketers, businesses and online influencers. Audiences will still be in the UK even if an influencer isn’t, for instance, and they could be pointing vulnerable individuals to unauthorised third-party gambling websites which have nothing to do with the game being demonstrated. The video gaming industry was not associated with such third-party advertising and is increasingly concerned about this.  

Audience member, Mr Bellringer – founder of the charity GamCare – mentioned that ambiguity between gambling and gaming is another example of the gambling industry attempting to remain ahead of the regulatory climate.  

Mr Bellringer was clear in saying that he wanted to support the burgeoning economic sector to ensure that people fairly enjoyed video games. From his experience, the gambling industry was one or two steps ahead of government when moves to regulate the sector first began. He added that there could be a similar response in video gaming from some stakeholders who naturally want to protect the industry’s growth and their own business interests.  

He remarked that  in contrast with the original rise of the gambling industry, government is now in a much better position to regulate online and digital industry more rapidly, taking account of the lessons learned from the gambling regulation developed in the 1990 and early 2000s. 


Ian Lucas said that from his experience of being a regulation minister it is important that key players come together to develop a discourse and that frankness, openness and honesty is key to delivering the right kind of law making and self-regulation. He said that they had experienced a good amount of engagement and openness with the Select Committee inquiry that is currently ongoing and is looking forward to it continuing.  

Mr Lucas concluded by saying that we don’t want to “regulate out of existence” an industry which this country is very good at, which is creative and also contributes to life enjoyment for a wide variety of people. Nobody wants James’ situation to happen. He said this is not an easy issue to tackle, and that it is multifaceted, and more research is needed to develop regulation and protect people. Therefore, this type of discussion is hugely beneficial to have with representatives from all sides. 

Key points to pull out / highlight 

James: “He noted that in the context of a video game character death or failing a level does not constitute a feeling of genuine failure.  The ability to constantly retry or restart a stage has little baring on how failure or success works in the outside world.”