A number of consumer groups have had an issue with Walmart’s entry into the Metaverse. The online retailer announced last fall the launch of two new virtual worlds on Roblox, “Walmart Land” and “Universe of Play,” aimed at appealing to the next generation of shoppers. The experiences allow Roblox users to play games featuring toys and popular children’s characters, earn virtual toys that fall out of an airship, complete challenges, and explore “toy worlds,” among other things. But the groups argue that Walmart is blurring the lines between advertising and organic content, and fails to properly disclose that the content in these virtual worlds is essentially ads and should be labeled as such.
However, Walmart denies these allegations and says it complies with US children’s privacy laws.
The groups, led by advertising watchdog truthinadvertising.org (TINA.org), sent a letter to the Children’s Advertising Review Unit (CARU) asking them to review Walmart’s Roblox games.
CARU is part of the larger nonprofit BBB National Programs, which oversees a dozen industry self-regulatory programs across the United States. In January 2001, the CARU program became the first Federal Trade Commission (FTC) approved safe harbor under the United States Children’s Online Programs Privacy Act, COPPA. This means that participants who adhere to CARU guidelines are considered COPPA compliant, protecting them from any enforcement action by the FTC.
Simply put, being flagged as potentially non-compliant with the CARU program is not something a participant would like as it could put them on the FTC’s radar.
In the letter, stakeholders are writing to CARU’s Senior Vice President, Dona Fraser, to warn the organization about Walmart’s Roblox “Universe of Play” experience, claiming that the virtual world, which is aimed at young children, will transform Walmart’s goods and services into fraudulently marketed without providing adequate disclosures that the game itself and the content within it are in fact advertisements. Additionally, the groups note that Walmart uses CARU’s COPPA Safe Harbor program seal to convey the message that the game conforms to the organization’s policies.
The letter details various aspects of the Walmart Roblox experience that the groups say point to its nature as a “promotional game.”
This includes the game being modeled after Walmart’s toy catalog and using popular toys and characters such as LOL Surprise!, Jurassic World branded items, PAW Patrol, Magic Mixie, Razor scooters and others sold in Walmart stores and online sold. The game also encourages kids to “collect the hottest toys” where the game only notes that in the fine print “It’s an advertisement.” Similarly, as children walk around the island, they open gift boxes, which again contain toys but the message “This is an advertisement” appears in a barely visible font. These gift boxes showcase top sellers in the toy category, like a Vtech kids’ smartwatch, popular dolls, race cars, and more.
Other unobtrusive promotional disclosures also appear in other parts of the game — such as signs that players’ avatars walk by while they collect coins, find toy boxes, or engage in other virtual activities, the letter said.
Similarly, the groups are having trouble with “Walmart Land,” another Roblox virtual world that kids can play in as avatars, and which is also where “Universe of Play” is being marketed.
Both games combined have attracted more than 12 million visitors since their launch, the letter said. Both games are also accessible to children of all ages as the “Age Guidelines” for the games on Roblox are marked “N/A”. The letter emphasizes that children under the age of 13 do not “fully understand the persuasive intent” of things like entertainment marketing.
“Walmart’s outrageous use of stealth marketing aimed at young children who are developmentally unable to recognize advertising content is not only appalling but deceptive and violates advertising truthfulness laws,” said Laura Smith , Legal Director of TINA.org, in a press release. “We urge CARU to act quickly to protect the millions of children who are manipulated by Walmart every day,” she added.
In addition to TINA.org, groups that have signed the letter include Fairplay, the Center for Digital Democracy and the National Association of Consumer Advocates. They ask CARU to audit Walmart’s games for compliance.
However, when reached for comment, Walmart claims that this has already taken place.
In a statement shared with TechCrunch, the retailer said:
In December 2022, Walmart was approved to participate in CARU’s COPPA Safe Harbor program after demonstrating that Universe of Play, a new immersive Roblox experience, meets the stringent requirements of COPPA and CARU guidelines.
Due to its younger user base, Roblox has already attracted the attention of other companies looking to market to kids, including Sanrio (Hello Kitty) and Mattel, which released a He-Man game on the platform last year. Mattel also partnered with Forever 21 in 2021 to create a Barbie-inspired collection and Kellogg’s first “Froot Loops” world.
Outside of the kids’ brands, many other companies have also targeted Roblox’s younger users, such as H&M, Spotify, Netflix, Samsung, Chipotle, Nike, Vans, and more.
Whether or not Walmart needs to make adjustments to its Roblox games could help set precedents as more brands enter the game worlds and the metaverse and advertising industries define their practices for this new form of social network.