In a report released on Friday, the eSafety Commission outlined how the providers of four major gaming platforms had responded to notices it issued in April.
The notices, issued to the providers of Roblox, Minecraft, Fortnite and Steam, required them to explain how they were meeting the government's Basic Online Safety Expectations.
The commission found some of the platforms had introduced additional safety mechanisms since receiving the notices, but significant gaps remained.
Among changes made include those implemented by Roblox in response to a court-enforced undertaking issued in August.
The gaming giant, which is the second most popular game platform among Australian children, agreed to introduce a number of additional safety measures.
This included introducing accessible reporting mechanisms, preventing adults from contacting unknown children without parental consent, as well as making children's accounts private by default.
"While we have seen some safety improvements as a result of sustained regulatory pressure, including the recent court-enforceable undertakings we accepted from Roblox, there is still significant work to be done across the board to prevent serious harms in online gaming to children," eSafety commissioner Julie Inman Grant said.
"Service providers should leverage systems that actually detect and disrupt serious harms before children are exposed to them."
The push for compliance comes as the government continues to introduce reforms to its online safety legislation, which began with its world-first social media ban for children under the age of 16.
Further reforms announced in September would allow users to opt out of algorithmic social media feeds.
The commission found that despite offering protections for child accounts, several platforms relied on users self-declaring their ages, allowing them to access features only available to adults.
While gaming platforms are exempted from the government's social media ban for under 16s, Roblox began limiting access to certain features to Australians aged 18 and over in December.
Epic Games and Mojang Studios, the studios behind Fortnite and Minecraft, relied on users self-declaring their age and allowed users identified as aged 18 or over to access what the commission describes as high-risk features.
It includes all-ages chatrooms and, in the case of Minecraft, access to unmoderated third-party servers.
The report also found the level of industry collaboration varied across studios, with Mojang Studios and Roblox participating in multiple industry initiatives aimed at combating child sexual exploitation online while Valve, the developer behind online gaming marketplace Steam, did not.
"Australian children have a right to play online without being exposed to predators, sexual extortionists, violent extremist content or other harmful material," Ms Inman Grant said.
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