Hawaii State Representative Sean Quinlan has advocated for self-regulation of loot boxes by the video game industry whilst also suggesting that such games should carry a 21+ age rating.
He said that ultimately, it's best for the industry to self-police. The ideal solution would be for the game industry to stop having gambling or gambling-like mechanics in games that are marketed to kids... BUT ... he believes games
makers should be held accountable. The ESRB would need to enforce higher-grade ratings and other labels to distinguish games that rely on predatory monetization. As an example, he said that the ESRB could say that if a game has loot crates, it
gets a 21-plus rating.
The Entertainment Software Association is proving resistant, however. Their response ran along the same lines as many publishers, asserting that loot boxes are a voluntary feature and that the gamer makes the decision in regards to their purchase
Apple has changed the rules around how games on its app store use loot boxes.
These boxes are random rewards for gameplay and often give players benefits and power-ups that can be used in games.
In a change to its developer guidelines, Apple said games must now let players know the odds of getting particular items in the boxes. In the updated guidelines, Apple said any in-game mechanism that rewards players with randomised virtual items
must list the odds of receiving each type of item. In addition, it said, customers must be informed of these odds before they buy the boxes or rewards.
Many games offer extras to players that can change the appearance of the game, introduce new characters or bestow power-ups that help people as they play. Some titles let people buy loot boxes with in-game funds they generate by playing or by
spending real money to purchase the game's virtual cash.
Germany is looking into imposing restrictions on loot boxes in videogames, according to Welt. A study by the University of Hamburg has found that elements of gambling are becoming increasingly common in videogames. It's an important part of the
game industry's business model, but the chairman of the Youth Protection Commission of the State Media Authorities warned that it may violate laws against promoting gambling to children and adolescents.
The Youth Protection Commission will render its decision on loot boxes in March.
Ardalan Shekarabi, the nation's minister of civil affairs, is concerned about making sure Swedish consumer protection laws apply across the board when it comes to gaming. Shekrabi admits that loot boxes are like gambling, but has asked Swedish
authorities to consider whether that's what they should actually be classified as. The idea is to have legislation ready by January of next year to ensure Swedish gamers don't have to worry about a transaction falling outside of the nation's
consumer protection laws in the event something goes south.
The Entertainment Software Rating Boar d (ESRB) has announced that it will begin assigning a new "In - Game Purchases" label to physical ( e.g., boxed) games.
The In - Game Purchases label is one of several interactive elements that ESRB currently assigns to notify consumers about the interactive or online features of a digital or mobile game. Consumers can expect to start seeing this new notice on all
games that can be purchased in stores and wherever those games can be downloaded in the near future.
ESRB president Patricia Vance said:
The video game industry is evolving and innovating continually, as is the ESRB rating system. ESRB's goal is to ensure that parents have the most up-to-date and comprehensive tools at their disposal to help them decide which games are
appropriate for their children/ With the new In-Game Purchases interactive element coming to physical games, parents will know when a game contains offers for players to purchase additional content. Moreover, we will be expanding our efforts to
educate parents about the controls currently at their disposal to manage in-game spending before their kids press 'Start'."
The new In-Game Purchases label will be applied to games with in-game offers to purchase digital goods or premiums with real world currency, including but not limited to bonus levels, skins, surprise items (such as item packs, loot boxes, mystery
awards), music, virtual coins and other forms of in-game currency, subscriptions, season passes and upgrades (e.g., to disable ads).
The Dutch Gaming Authority (kansspelautoriteit) has ruled on the matter of loot boxes i computer games and has determined that out of ten popular games with loot boxes the commission investigated, four don't comply with the country's Better
According to the Dutch Gaming Authority, the four games in violation of the Better Gaming Act because they feature elements in them that can also be found in the gambling world. Because loot box items could be traded for euro at fluctuating
prices, these items have economic value. And since players can earn money for rare items, the games violate the rules of chance.
Of the remaining six games the Dutch Gaming Authority investigated, they found that the loot boxes contained items that could not be traded. Thus they are in compliance with the Better Gaming Act. However, the group still criticized how loot
boxes were implemented as slot machines or roulettes.
Companies that do not comply with the Better Gaming Act can be fined or even prohibited from being sold in the Netherlands.
The games will only be officially identified if they don't take the required remedial action. However it has been reported that likely games requiring cuts are Playerunknown's Battlegrounds (PUBG), Dota 2 , and Rocket League which
include items that can be traded through third-party services
The Dutch gambling authority will enforce a new ban on loot boxes. They identified four games that offer loot boxes that are considered gambling. According to the public broadcast company these games are FIFA 18, DOTA 2 ,
PlayerUnknown's BattleGrounds and Rocket League .
These games had until the 20th of June to make changes to the gambling aspect of their loot boxes. Starting from Thursday the gambling authority will enforce the rules. Fines can be 830.000 euro (960.000 dollar) or 10% of the company's worldwide
revenue. If they don't make changes, the public prosecutor will look into prosecution.
France's online gaming authority (ARJEL, Autorité de Régulation des Jeux En Ligne) has decided that loot boxes in premium-priced games are not gambling. It determined that loot boxes are not legally considered gambling, and therefore are
However, ARJEL will continue to monitor the matter and is also calling for more unilateral support from the European Union in order to achieve a sound consensus on whether or not to consider loot boxes gambling.
According to ARJEL, the fact that you can't readily cash out your rewards from loot boxes for real-world currency means that in the minds of regulators it's not quite gambling. For them, the only way it would be gambling is if players could
actually retrieve the money that they invested into the product.
However, ARJEL also believes that loot boxes do contain questionable psychological hooks that work very similar to slot machines and roulette wheels in terms of luring gamers into a feeling of needing to spend more money in order to acquire the
item they seek.
Fifteen EU-based regulators plus Washington State have made a joint declaration while Australian based study likens loot boxes to gambling, not baseball cards
Fifteen EU gambling regulators from the UK, Ireland, France, Austria, Poland, Latvia, the Czech Republic, Spain, the Isle of Man, Malta, Portugal, Jersey, Norway, and the Netherlands plus US representation from the Washington State Gambling
Regulator published the letter, noting their concerns with the business model.
In addition to the loot box problem, the letter addresses how it will take on websites that let players either gamble or sell in-game items like skins or weapons with real-world money.
One of the signatories, Neil McArthur, CEO of the UK Gambling Commission said:
We have joined forces to call on video games companies to address the clear public concern around the risks gambling and some video games can pose to children. We encourage video games companies to work with their gambling regulators and take
action now to address those concerns to make sure that consumers, and particularly children, are protected.
The letter speaks of the groups concerns but does not detail the direction sthat the group will take in reacting to the concerns.
According to VentureBeat, a study conducted by the Australian Parliament's Environment and Communications References Committee showed that there were links between loot box spending and problematic gambling. The population sample size was 7500
The more severe a gamers' problem gambling was, the more likely they were to spend large amounts of money on loot boxes. These results strongly support claims that loot boxes are psychologically akin to gambling, said the report, conducted by Dr.
David Zendle and Dr. Paul Cairns.
In a statement, the pair added loot boxes could potentially act as an introduction to gambling or take advantage of gambling disorders. They note that the industry tends to brush off loot boxes as similar to harmless products like baseball cards,
football/soccer stickers, and products along those lines.
In related news games maker EA could face legal issues for ignoring a ruling by the Belgian government to remove the Ultimate Team portion from FIFA 18.
The US Republican senator Josh Hawley of Missouri has announced that he would be introducing a bill banning manipulative design features in video games with underage audiences, including the sale of loot boxes.
The legislation would prohibit the sale of loot boxes in games targeted at children under the age of 18. Games companies could also face penalties from the Federal Trade Commission if companies if they knowingly allow children to purchase these
Regulators would determine whether a game is targeted at minors by considering similar indicators that they already use under the Children's Online Privacy Protection Act (COPPA). Subject matter and the game's visual content would help regulators
determine who the game is marketed toward. When a game is designed for kids, game developers shouldn't be allowed to monetize addiction.
Pay-to-win mechanics in games targeted at minors would also be outlawed under this legislation. This includes progression systems that encourage people to spend money to advance through a game's content at a faster pace.
US Senator Josh Hawley formally filed the Protecting Children from Abusive Games Act (PCAGA) on May 23 2019. His proposal aims to ban what he considered manipulative video game features aimed at children. Hawley tweeted:
It's pretty simple. Video game companies shouldn't put casinos targeted at kids in their games.
Through the PCAGA, Hawley targets games that are aimed at minors and feature loot boxes and pay-to-win mechanics. He views these features as harmful to children--a way for game companies to monetize the addiction minors already experience by
playing video games, he claims.
The bill states that the Federal Trade Commission (FTC) will enforce these rules, if passed. Companies that violate the rules would be financially penalized. Additionally, the bill calls upon the FTC to submit a report to the Senate on the
psychological effects of pay-to-win mechanics and loot boxes on users and if such features induce compulsive purchasing behavior by minors.
The Entertainment Software Association (ESA) has already responded to the bill with its concerns , as CEO Stanley Pierre-Louis called the bill flawed and riddled with inaccuracies. He claims the impact is far-reaching and may negatively affect
the more than 220,000 Americans employed by the video game industry. He believes that control of any in-game purchases made by minors should be left up to parents, rather than the federal government.
This bill still has a long way to go to become law.
The UK Gambling Commission has told MPs that it does not currently oversee the purchase of in-game content like Fifa player packs and video game loot boxes.
This is because there is no official way to monetise what is inside them. A prize has to be either money or have monetary value in order for it to fall under gambling legislation.
However, there are unauthorised third party sites which buy and sell in-game content or enable it to be used as virtual currency. Gambling Commission programme director Brad Enright admitted that games publisher EA, which sells the football team
management game Fifa, faced a constant battle against unauthorised secondary markets.
Dozens of parents have complained that their children are spending hundreds of pounds on in-game purchases, and have criticised the process as a form of gambling as there is an element of chance in the outcome and their children are then tempted
to buy again in order to try to get the result they want.
Gambling Commission chief executive Neil McCarthur admitted that there were significant concerns around children playing video games in which there were elements of expenditure and chance. However, he added that under current legislation it did
not classify as gambling.
Loot boxes in video games have come under fire as method of monetising games. Complainers have attacked them as if they were casino gambling, surely an unjust accusation but nevertheless loot boxes can be a rather ruthless way to extract money.
Now the films censors of New Zealand's OFLC are reporting on an evolution towards fairer monetisation methods. The OFLC speaks about developments in a blog post:
You don't know what you are paying for and if you don't get the item you want then you can end of buying a bunch of them.
People have been getting pretty annoyed about this for a while and pressure built up . In early August, a group of companies that make game consoles announced a policy where they will only allow games that show players their chances of getting
items from loot boxes . This chance is commonly called a drop rate by those who talk about video games, as it is the rate at which items will drop. The announcement means that, all things going to plan, games that are published on the
PlayStation, Xbox, and Switch will show drop rates from 2020 onwards.
Since the announcement last week, a few game developers have begun removing loot boxes from their games entirely . Their solution is to replace loot boxes with boxes where players can see what is in them. Last week, popular game Apex Legends
removed loot boxes less than a week after adding them in.
Players generally view the policy announcement as a positive step forward, although some commentators have pointed out that showing the drop rate doesn't change the dodgy nature of loot boxes, as they are still based entirely on random chance.
The policy appears to be based off regulations that were in place in China until recently, which also required games to show drop rates. Since then, Chinese regulations have intensified, placing limits on how many loot boxes players can open in a
day and making games increase the drop rate with each box opened. These regulations have proven effective in giving developers pause. Insiders now recommend moving away from loot box mechanics altogether in the Chinese market .
The fact that China felt the need to strengthen its regulations lends credence to the fact that simply showing players drop rates may not fully manage concerns around loot boxes.
More troubling is the revelation that game publishers previously offered to increase drop rates for people whom they paid to open loot boxes on video. By changing the drop rates, viewers are given an inflated idea of what they are likely to get
from loot boxes. This suggestion of false advertising taps into why a lot of players dislike loot boxes and think that they are exploitative and anti-consumer.
These changes show that the industry is starting to solidify a focused strategy in order to deal with the potential harms from loot boxes. The space remains fast-moving. I will do my best to keep on top of it and let you know about more
developments as they arise.