EU’s new playbook for in-game currencies explained

Microtransactions with virtual currencies are a top earner for esports titles, sustaining the viability of free-to-play models through an extended period of anaemic growth. But the practice has its critics. In the heat of play, consumer advocates say it’s too easy to lose sight of how much real money is being spent.    

Now, an EU watchdog has issued guidance designed to change how in-game currencies are used and who can be targeted for marketing promotions. The changes impact esports organizations, game publishers, and platforms, potentially re-shaping monetization strategies across the sector. 

We look at the principles behind the new guidelines and consider how compliance could impact esports business models.

Imagine you’ve been battling it out on Fortnite for 20 minutes, but progress has been slow. Your teammates are moving on, but you’re falling back. Frustrated, you decide to spend some of your V-Bucks stash on a Battle Pass. Almost instantly, you’re bagging awards, advancing fast, and catching up to your crew. 

That impulse buy is a microtransaction. While inexpensive on its own, multiplied by millions of users and purchases, it adds up. Naturally, game publishers want users to keep spending, so they design in-game purchases to complement the dynamics of gameplay. That can make it hard to keep track of what you’ve spent.

Consumer advocates hate that, so in late March, the EU’s Consumer Protection Cooperation Network (CPC) published comprehensive guidelines prescribing how in-game virtual currencies should be used and establishing new consumer protection standards for developers and publishers. 

The EU guidelines set out seven core principles:

Esports publishers aren’t happy. A joint statement by the European Game Developers Federation (EGDF) and Video Games Europe (VGE) issued the day after the EU’s publication lambasted Brussels for “lack of (industry) engagement in creating these principles, which introduce new legal theories and misguided interpretations of EU consumer law that will create confusion and disruption for European consumers.” 

The statement goes on to say that following the guidance will “present a challenge to the industry’s future growth.”

You can see what they mean. Figures from game and console data platform Newzoo show that revenues from PC in-game transactions rose by 1.4% in 2024 (YoY), accounting for $24.4 billion of the $37.3 billion in overall sales. That’s almost 60% of revenue. 

Consoles pull in less from microtransactions, but they still account for 32% of revenue, says Newzoo. And console in-game transaction revenue is growing faster than PC, rising by 4.5% last year, accounting for $13.9 billion out of $42.8 billion all-in. 

In-game monetization has been controversial for years. From the arrival of NFTs to the use of virtual currencies, gamers and developers have routinely pushed back on plans to expand the incremental fees charged for downloadable content (DLC) and ‘services’ like loot boxes.

Now that the EU has sided with the critics, what will it mean for the esports industry?

Alexandre Vuchot and Dr. Constantin Eikel, partners at European law firm Bird & Bird, write that the EU is targeting common practices. Altering them will require significant changes to games already in-market. 

To avoid being investigated under EU or national laws, publishers will need to review in-game monetization structures, incremental content and service purchases, contract language, and pricing structures. Those who fall afoul could face big penalties. They wrote:

“The European authorities may enforce these new principles either via the CPC Regulation or national law. An enforcement via the CPC Regulation is more likely if the same content is available in more than two European states. In such a case, an investigation will be opened, in which targeted companies may either make commitments to change or face potential fines of up to 4% of their annual turnover.”

While the principles have been published as guidance rather than binding rules, they provide a roadmap for future regulatory action in the esports space. European consumer protection watchdogs have signalled their enforcement priorities, and it could influence regulatory approaches in the USA, where rules and enforcement are more fragmented. 

While the US Federal Trade Commission (FTC) has taken high-profile enforcement actions against publishers like Genshin Impact over misleading loot boxes and currency disclosures, the US doesn’t have an overarching rules framework comparable to the EU’s seven principles. 

Given the EU’s global leadership role in defining new regulations, American policymakers could decide to follow a similar path.

Legal experts say the EU principles could transform monetization practices for esports publishers and platforms:

As an olive branch, the EGDF and VGE joint statement notes that “our members always respect European consumer laws in how they offer (in-game) purchases,” and both industry bodies will undertake “a thorough legal assessment of the principles and will seek further engagement with the CPC Network to ensure the best experience for our players.”

They won’t have missed the reference to the seven principles as a “non-exhaustive list of practices” that leave the door open to further actions, in particular, the imposition of formal regulations should voluntary compliance prove to be unworkable.

Consumer advocates say the guidelines will lead to greater fairness and transparency in the way esports publishers use virtual currencies. Implemented the right way, they could result in clearer pricing, simplified refunds, and stronger protections for vulnerable players. 

Could it hamper income growth? Esports publishers and platforms will now seek a compromise that protects revenues while smoothing out some of the rougher practices EU watchdogs want to remove from the playing field.