August 9, 2019
In a Federal Trade Commission workshop, Nintendo, Microsoft, and Sony, the biggest game console manufacturers, have vowed to self-impose regulations requiring video game developers to disclose the odds for loot boxes. The FTC is looking at loot boxes, a system in which players buy “random” packages of in-game items without knowing the odds of getting items they actually want. The trade group Entertainment Software Association (ESA) plans to add warning labels and other policies related to loot boxes.
VentureBeat reports that, on its blog, ESA wrote that Activision Blizzard, Bandai Namco Entertainment, Bethesda, Bungie, Electronic Arts, Microsoft, Nintendo, Sony Interactive Entertainment and Wizards of the Coast “have pledged to disclose loot box probabilities and rarity by 2020.” Rocket League just announced it will no longer sell loot boxes.
VB points out that, “this is a defensive move from the video game industry, trying to self-govern a controversial monetization system before actual laws step in.” The issues relevant to loot boxes came to the fore in 2017, when the “Star Wars: Battlefront II” game “angered players …. with a loot box-dependent progression system.” Other game developers now issue “the battle pass, which charges players a fee to unlock a progression line that awards them items based on how much they play.”
Bloomberg reports that, according to ESA, “manufacturers will now flag on packaging that their titles include additional opportunities to buy things.” The gaming industry has long enjoyed booming revenue from in-game purchases, such as “new characters, missions or weapons.”
Because buyers don’t know what they’ll get when they purchase a loot box, “regulators around the world have grappled with whether that constitutes gambling.” Regardless, loot boxes have led to minor-aged gamers spending more than anticipated. In addition to the FTC workshop, in May, “a bipartisan group of senators introduced a bill that would ban loot boxes in games aimed at players under 18.”
Loot boxes are also illegal in Belgium, and “regulators across Europe are looking at the issue.”