Video game publishers could be paying the price for predatory “pay-to-win” schemes. During the last week, Sen. Josh Hawley (R-MO) introduced the “Protecting Children from Abusive Games Act,” which outlaws randomized microtransactions — otherwise known as “loot boxes” — in titles played by minors, which are defined as any users below the legal age of 18.
According to Business Insider, Hawley’s bill is currently being contested by the Entertainment Software Association (ESA), a lobbying group working on behalf of the industry’s worst corporate offenders, who desperately want their $50 billion revenue stream to remain intact. The associated publishers, known for their abusing of loot box practices, include Epic Games (Fortnite), Activision Blizzard (Call of Duty, Overwatch) and Electronic Arts (the highly controversial Star Wars: Battlefront). Most of these famous titles are rated by the ESRB as being for “mature audiences” set at the arbitrary age of 17, meaning their businesses are potentially within the firing line.
Alongside this ban, the bill would also outlaw any practice deemed to promote “pay-to-win schemes” purchasable by customers. When asked to provide specific examples of such infringements, Hawley’s office immediately cited Candy Crush, another one of Activision Blizzard’s popular cash cow games for mobile, which reportedly allows users to spend upwards of $149.99 on bundles which makes progression within the game much easier compared to their handicapped opposition.
“Social media and video games prey on user addiction, syphoning our kids’ attention from the real world and extracting profits from fostering compulsive habits,” Hawley said in a statement. “No matter this business model’s advantages to the tech industry, one thing is clear: There is no excuse for exploiting children through such practices. When a game is designed for kids, game developers shouldn’t be allowed to monetize addiction, and when kids play games designed for adults, they should be walled off from compulsive microtransactions. Game developers who knowingly exploit children should face legal consequences.”
The Federal Trade Commission (FTC) — which announced their own investigation into loot boxes around December of last year — would be responsible for enforcing these new rules should the bill gain federal traction. It’s being reported the ESRB ratings won’t be used as a reference, but that titles will be judged independently by the commission based on “subject matter, visual content” and whether publishers and developers “knowingly allow minor players to engage in microtransactions”. This does give the FTC enough wiggle room to hold these publishers accountable without being beholden to a ratings group’s limitations on what constitutes a children’s game versus an adult’s game.
The microtransaction crisis within video games has been a widely contested issue for years. In the past, companies simply made their income off selling finished games which allowed for achievable in-game progress both cosmetic and practical. This has eventually dissolved into the release of more barebones titles, whether free-to-play or otherwise, where downloadable content (DLC) is instead released throughout its life-cycle.
This can be good for users with fresh content and companies with a steady income, yet controversy strikes once these DLC rewards are tied to skill and progression while they’re being hidden away in random box generators. This was the case with Star Wars Battlefront 2, which video game critics such as Angry Joe and swtorstrategies found took $720–$2100 out-of-pocket or over 500 hours in order to obtain all of the on-disk items, including the iconic series villain Darth Vader. The practice was eventually reversed once Disney threatened EA after the scandal damaged their brand.
By restricting such highly sought content behind these systems, adults and children alike often use linked-credit cards to make insane purchases upwards of hundreds to thousands of dollars to get the content they’ve already purchased. Psychologists and gambling addiction experts such as Les Bernal, national director of Stop Predatory Gambling, have conducted their own research which links loot box systems to gambling addictions. “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.”
This link, which underlies the success of their video game publishers, cannot be understated. In a recent APH public study involving over 7,400 gamers, it was discovered that there are “important links between loot box spending and the problem of gambling”. A recent survey from the Australian Environment and Communications Reference Committee also found “video game loot boxes are psychologically akin to gambling.”
Another academic paper from Addictive Behaviours interviewed 144 adult gamers and 113 undergraduates about their use of loot boxes, finding over 90% said that they had opened a loot box in a video game and the vast majority spent money on them. “Our findings are consistent with voiced concerns that loot boxes overlap with gambling and support the need for regulators to consider gambling-like mechanisms within video games,” said study author Gabriel Brooks.
The industry defence, however, stems for their sneaky implementations.
“Numerous countries, including Ireland, Germany, Sweden, Denmark, Australia, New Zealand, and the United Kingdom, determined that loot boxes do not constitute gambling,” the ESA lied in their counter-statement to Charlie Intel. “We look forward to sharing with the senator the tools and information the industry already provides that keeps the control of in-game spending in parents’ hands. Parents already have the ability to limit or prohibit in-game purchases with easy to use parental controls.”
This matches comments from Dan Hewitt, the vice president of the ESA, who told the New York Times last year: “Loot boxes are not gambling because they each provide something to use in the game. They offer an alternate experience and players are not required to buy them. Our industry constantly tests new business models because those innovations can drive creativity and fan engagement.” To translate, this is the watered down version of CEOs praising addiction for driving engagement regardless of age. Sure, these R&G-based systems don’t have to be purchased… if your goal is to simply play the game barebones.
If you want the unique items hidden within, however — from items increasing XP to unique character skins — often it’s a matter of content through wagering time or money. If there are free means of obtaining items, it often involves either a few hundred hours of grinding the game to a bloody pulp in contrast to a few simple payments of the credit card. Just take one more spin and the almighty item could be yours… if you’re willing to run the risk of paying for unnecessary filer items and duplicate items. These effectively make these titles a zero-sum game, while also granting users something on paper to avoid all the legal trouble. Publishers are greedy, but they’re not stupid. Whether the government actually catches onto their grift remains to be seen.
