Washington Demands Oversight Of “Predatory Loot Boxes” In Video Games

Washington Demands Oversight Of “Predatory Loot Boxes” In Video Games

Washington is home to no angels, but when faced with the predatory behavior of video game companies and their stranglehold on addictive audiences young and old, even the swamp has some ethical standards.

It was only a few months ago when Electronic Arts (EA), two-time winner of the “Worst Company In America,” were surrounded in controversy for shady business practices regarding “Star Wars Battlefront II” — the company’s triple-A online multiplayer shooter alongside Disney’s blockbuster film. From The Verge to The Washington Post, gamers were treated to rare for-the-people journalism that exposed the “loot box” system for what it really is: corporate con-jobs that enable adults and children to gamble online.

Traditionally, players drop around $60-$120 retail price on a new video game and expect a merit-based level progression system — earning points through their skills at the game and unlocking key game-winning items and abilities along the way, showcasing the player’s own success. EA, among other corporate entities in the market, don’t play that simple. Instead, as calculated by popular video game critic Angry Joe and the casual bloggers over at swtorstrategies, that retail price is followed by a savage ultimatum:

Grind-To-Win:

Initially, players may mistake this progression system for regular games on the market… only there’s a sinister catch. In the case of Battlefront II, for instance, it was revealed that to unlock those key game-winning characters such as Darth Vader and Boba Fett, players would have to play the game for 720–4000+ hours in order to unlock their powerful, fan-favorite icons.

They do this through fictional currency points (also known as “crafting materials” and “battle credits”) which are distributed at the end of a match, among other methods. Another sick catch is that rather than achieving these through skill, which implies a genuine merit structure bound to be uneven, each player gets the same amount regardless of their actions throughout the game.

This renders gameplay pointless, artificially giving quality players the same as their lesser teammates — therefore, making the progression predetermined rather than based on player output. This also artificially extends the game’s lifespan by withholding advertised features from the players until they reach unrealistic, near-impossible heights as dictated by the developers and their corporate overlords.

This essentially works as a deterrent from playing the game as is, coercing players — rated between the ages of 13 and up — towards the second progression option… one that involves penny-pinching real-world currency:

Pay-To-Win:

Alternatively, EA and these companies are more than happy to take an additional dollar or ten from their players — which is the general market price for a loot box. Once the user buys this loot box, which contains prizes they don’t know about until the purchase is confirmed, they are granted items and abilities chosen through a supposedly randomized algorithm that can give them a quality deal or a near-worthless one. This is a risky process, based on chance, that, to the nominal person, might make them ask “Oh, so it’s like a Casino or a slot machine, right?” — and this would be a fair question.

The practice is troubling when you consider users with financial difficulties, susceptible to addictions from gaming to gambling, can be left with around $720–$2100 out of pocket for being hooked on winning the jackpot. This remains an unregulated service, without a guarantee as to what the player is buying and if this is decided upon fairly as implied. It’s also easily accessible to children under the legal age without a proper warning to alert their parents and legal guardians.

One popular YouTuber, known as XfactorGaming, had to buy around 85 loot boxes ($90 USD in total), alongside in-game credits in excess of 18,000, just to unlock the iconic Darth Vader character for multiplayer usage — 50% more than the game’s standard retail price of $59.99, as reported by The Intercept:

Consumer outrage resulted in a drastic decline in sales for the Battlefront II title, prompting EA to temporarily disable the system and purchases citing unfair advantages between players during their opening launch days. However, it wasn’t just the gaming public that found these practices - easily accessible, advertised to and purchased by children - to be “predatory.”

Psychologists and gambling addiction experts, such as David G. Schwartz of the University of Nevada Las Vegas’s Center for Gaming Research, Dr. Emil Hodzic of the Sydney-based Video Game Addiction Clinic and Les Bernal, national director of Stop Predatory Gambling, are concerned about the loot box system’s “dangerous” place in modern gaming:

“Loot boxes in video games are a dangerous and predatory form of gambling being marketed directly to kids,” Bernal told The Intercept. “Their sole purpose is to extract more money out of young people’s pockets.”

It was after this report that the issue started to gain traction on Capitol Hill among American lawmakers. Last month, New Hampshire’s Democratic Senator Maggie Hassan sent a letter to the head of the Entertainment Software Ratings Board (ESRB), Patricia Vance, threatening a federal study into the matter and requesting warning labels be placed on the products using this micro-transaction process — intended to warn parents of the potentially addictive, widely used method in popular games from Blizzard Entertainment’s Overwatch to Warner Bros.’s Middle-Earth: Shadow of War.

Hassan pressured President Donald Trump’s four nominees to the Federal Trade Commission (FTC) on the issue during a Congressional hearing, saying:

“In the past, the FTC has looked at video games, specifically the impact of violence in games. Do you agree that children being addicted to gaming and activities like loot boxes that might make them more susceptible to addiction is a problem that merits our attention?

And depending on how the ESRB responds to my inquiry, would the FTC be willing to look at loot boxes as an issue independently?”

Unexpectedly, all four FTC nominees immediately agreed to participate in federal oversight of the loot box process and its effects on child gambling.

In particular, Virginia’s own Christine S. Wilson replied:

“As the mother of two teenagers, I would agree that the extent to which teenagers play video games is certainly a concern and I would be willing to talk to staff and get more up to speed on this issue should I be concerned.”

This followed actions taken at Hawaii’s state level, where lawmakers introduced legislation that put explicit warnings labels on products, as well as the outright ban of sale for those kinds of products to those under the age of 21. Hawaii’s Democratic state Representative Chris Lee of Oahu, a self-described “lifelong gamer,” gave this statement:

“I’ve watched firsthand the evolution of the industry from one that seeks to create new things to one that’s begun to exploit people, especially children, to maximize profit.”

In the past, EA and the ESRB have argued the loot box system is in no way similar to gambling — due to their nature as micro-transactions (small products set at a low price) where prizes of any kind are always provided after purchase, regardless of whether they got the prizes they wanted. In this way, the player is technically never left empty-handed.

The same can’t be said of slot machines and Casinos where the player can leave with less than they originally had and prizes of any kind are not guaranteed. By this logic, if slot machines gave the user a penny after every single use, rather than the possibility of losing money on nothing, they would not be considered gambling because they are always providing a trade — regardless of whether it’s the kind of trade the gambler wanted.

This predatory system, designed to keep players trying their luck with their own money, deserves recognition as a social concern for parents, guardians, and addicts — and the ESRB is no friend to the consumer in this regard.

Just this week, after the letter was sent, the self-regulatory organization made a special announcement declaring they will label all games that have loot boxes, micro-transactions, boosts and DLC under the broad label of “In-Game Purchases [Included].”

video game loot box gambling

Technically, this is the organization taking down all the birds with one stone, surely wanting big government off their back, but it’s decidedly anti-nuanced framing — conflating the risky venture of loot box, where products can be manipulated and random, with clear downloadable content where the user knows exactly what they’re purchasing.

As reported by Rolling Stone, the totality of loot boxes is lost on the nominal parents of gamers. In February, 400 parents were asked if they knew what loot boxes were — 69% of parents said they didn’t know what it meant, 31% said they had heard of it, with only 28% actually knowing what it meant.

Facing these kinds of statistics, calls for the ESRB to be transparent in what the process entails isn’t without ethical reasoning. Sen. Hassan rightfully noticed that this decision, while an improvement, was a dodge from her intention of giving consumers explicit sale warnings, responding:

“While today’s announcement of the creation of a new ‘In-Game Purchases’ label and the ESRB’s response to my letter are a positive step for parents and consumers, I am still concerned by the ESRB’s skepticism regarding the potentially addictive nature of loot boxes and microtransactions in video games.

I will work with all relevant stakeholders to continue oversight on these issues and ensure that meaningful improvements are made to increase transparency and consumer protections.”

We’re far from the traditional days of ethical game design and a new age where predatory behavior is named and shamed, and the ESRB appears to have fallen short of its responsibility as a consumer watchdog. As hot-heads continue to question video games’ relationship to violence and sexism, it’s fair to examine how this new practice works as a gambling entity as well.