Statement of CFPB Director Rohit Chopra on Risks to Consumers in Video Gaming Marketplaces

Today, the Consumer Financial Protection Bureau released a report on issues related to banking in video games and virtual worlds. The report examines some of the business practices involving gaming currencies and commerce on gaming platforms that seek to create walled-garden, virtual realities.

Over the last several decades, video games have moved from a model of consumers purchasing individual games towards immersive and expansive experiences powered by user-generated content. Individuals congregate in these virtual worlds for community and to explore. At the same time, user interactions are heavily monetized, helping to create billions in revenue annually for gaming companies.

The report offers a window into how money moves in and out of gaming and virtual worlds. Some might argue that these assets are simply gaming credits akin to a gift card or gift certificate. However, their use is quite different. A player might purchase proprietary gaming currencies with U.S. dollars and other fiat currency using traditional payments systems. Players can not only purchase goods and services, like “skins,” with these gaming currencies but they can also sell and trade these goods and services with each other. Gaming currencies can also be converted back to fiat currency through various means, giving companies the ability to assign and extract considerable value to these currencies that can then be leveraged by conventional financial products.

Gaming publishers can collect a large amount of surveillance data about their players. This data can be used to further monetize gameplay and induce spending. Also, gamers may be harmed when their data is sold, bought, and traded between companies, including for purposes outside of game play.

Considerable attention has been given to some of the harms related to gaming and virtual worlds, including the targeting of children by other users and the risks of addiction. The potential harms related to gaming and virtual worlds can be especially acute for children and other vulnerable populations. The Consumer Financial Protection Bureau is working to understand how these worlds can become a haven for scams, fraud, financial losses, and unanticipated purchases that can deplete a family’s real-world financial assets.

The Consumer Financial Protection Bureau will continue to monitor emerging business practices in the virtual world to ensure consumers’ finances and data are safeguarded from harm.