The Office of Fair Trading has warned the game industry about aggressive in-app purchases following an investigation into whether children are being unfairly pressured or encouraged to pay for additional content in web and app-based titles.
The OFT has published new principles for consultation, which say consumers should be told upfront about any possible in-game costs or advertising.
In-app purchases have hit the headlines over the last year after parents complained when their children ran up expensive bills while playing games on smartphones and tablets.
The OFT also says game makers should make it clear that in-game payments are not authorised, and should not be taken, unless the payment account holder has given their informed consent.
The investigation, which looked at 28 games, found that some games include potentially unfair and aggressive commercial practices to which children may be particularly susceptible.
The OFT singled out games that imply the player would somehow be letting other players or characters down if they did not obtain something by making an in-game purchase.
The OFT believes commercial practices of this nature are likely to breach consumer protection law and that companies must change their ways.
OFT executive director Cavendish Elithorn said: "This is a new and innovative industry that has grown very rapidly in recent years, but it needs to ensure it is treating consumers fairly and that children are protected.
"The way the sector has worked with us since we launched our investigation is encouraging, and we've already seen some positive changes to its practices. These principles provide a clear benchmark for how games makers should be operating. Once they are finalised, we will expect the industry to follow them, or risk enforcement action.
"In the meantime, we want to hear what parents, consumer groups, industry and anyone else with an interest thinks about our principles before we finalise them later this year.
"This is a global industry so we're also sharing our principles with our enforcement partners world-wide with the goal of achieving some common international standards."
The OFT called on comments on the principles by 21st November.