Digital Fairness Act raises questions over future of mobile game monetisation

• A draft of the EU's Digital Fairness Act proposes new restrictions on loot boxes, pay-to-win mechanics and in-game currencies for minors.
• The proposed restrictions could impact smaller developers and free-to-play games.
• A more consistent EU rulebook could ease compliance, although additional national measures may remain.

A leaked draft of the European Commission’s proposed Digital Fairness Act has raised concerns among some in the games industry about its potential impact on the future of monetisation, game design, and developers operating across the EU.

The leak came ahead of the official proposal from the Commission presented today, November 11th, providing greater detail on the legislation.

The draft outlines restrictions on paid loot boxes, pay-to-win and pay-to-progress mechanics for minors, alongside requirements around virtual currencies and design features that may encourage excessive engagement.

Industry concerns

Arcanix.AI director Oscar Clark expressed concerns about how the proposed measures could affect developers, particularly for smaller teams.

"Again, we are going to see regulations enforced by people who have insufficient understanding of game design and development," he said, speaking with PocketGamer.biz. 

"Again, we will see the biggest impact on the smallest teams."

Clark also raised concerns that the proposed regulations could lead to games being treated similarly to gambling, although he noted he had yet to assess that risk fully.

Despite his concerns, Clark recognised that the industry has a responsibility to protect vulnerable players and suggested developers have not always done enough to address problematic practices. 

"Our failure to police bad actors and poorly implemented choices, as well as our failure as an industry to make our case, is on us. This is the price of those compounding failures."

A consistent rulebook? 

Despite the concerns around the proposed changes, some see potential benefits in other areas. EU digital policy analyst James Tamim points to plans to replace existing consumer protection legislation with a regulation that could introduce more consistent rules across the EU. 

"I think that's a positive development, as it should provide a clearer, more consistent set of rules across the EU, rather than 27 national implementations with sometimes differing interpretations," Tamim said.

"For gaming companies operating across multiple Member States, that could mean greater legal certainty and easier compliance."

However, Tamim also pointed to the potential impact of new requirements on the games industry, particularly around monetisation.

The current proposed restrictions include prohibiting paid loot boxes and pay-to-win mechanics for minors. Parents would also need to approve the use of any paid in-game currencies, while games would have to make their real-world value clearer.

"There are also broader provisions on addictive design, including allowing users to disable certain engagement features, which could affect things like daily engagement incentives and notifications."

Martine Spaans, general manager at the Dutch Games Association, questioned whether the proposed changes would go far enough to create consistent rules across the EU. She discussed the matter following the leak, ahead of today's announcement.

"We see the DFA leak still refers to allowing member states to adopt further national measures, so this would mean the DFA does not harmonise the rules across the EU. That is quite a disappointment."

The free-to-play implications 

Spaans also raised concerns around the potential impact on free-to-play games, highlighting those accessible to younger audiences. 

"Another big concern is that all pay-to-win and pay-to-progress mechanisms are banned for minors, and there is no clause saying that this could be activated by parental control tools. This effectively blocks all free-to-play games from minors, as artificial difficulty barriers are included in the definition of banned mechanisms."

EU Kids Act

Questions also remain around how the DFA would interact with the proposed EU Kids Act, particularly around parental controls, age assurance and the role of the PEGI age-rating system. 

"Both regulations make direct references to PEGI, and 'toggle off by default' systems and rely on parental control tools for age assurance. However, it is still unclear in what capacity the PEGI system will be recognised as the EU standard," Spaans said.

Industry trade body Video Games Europe has also called for greater recognition of existing age-rating systems in its comments on the EU Kids Act.

"While we welcome the recognition of the industry-led self and co-regulatory systems (PEGI and USK) - we call for these to become the de facto standard for games made available in Europe."

The organisation also cautioned against widespread age checks for all games and players, while supporting default-off settings for certain features and giving parents a greater say in their children's access to games.

Commenting on the leaked proposal ahead of today's announcement, Tamim cautioned that the leaked DFA text should not be treated as final. 

"Of course, this is still a leaked draft, and the final text could change considerably. But the implications for the gaming industry could be substantial."