If the data created by apps and games aren’t synced to their respective service or aren’t backed up then yes, that data is lost. In regard to in-app purchases, they are typically restored by selecting the “restore purchases” option from within the app or game.
If all the games he likes are no longer on the device and he still wants to play them then yes, you will have to go to the purchased section of the App Store and reinstall them.
Depending on your iOS version, you can accomplish a good deal of prevention via the restrictions settings.
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