4 Dems Pushing Game Companies To Drop Loot Boxes Pointing At UK Law That Doesn't Mention Loot Boxes

from the what's-in-the-box dept

Somehow, despite all odds, the conversations between the public and the video game industry about loot boxes are still going on. If you’re not familiar with loot boxes, they are a randomized reward, typically after a purchase, that provides some kind of in-game benefit, cosmetic or in gameplay, to the purchaser. Because of their random nature, a whole lot of people consider them both a form of gambling (kinda) and an affront to fair online competitive gameplay (definitely) because they allow those with money to be stronger in the game than those without money. This consternation has caught the eyes of politicians, who then attempt to trade off of it in order to build up some kind of goodwill with the gaming public. You will recall that Josh Hawley introduced a doomed bill in the Senate to “regulate play to win” practices of video game companies. The bill died in Congress without receiving a vote.

Well, now a group of Democrats are trying to get larger gaming companies to self-regulate their own loot box practices by pointing to a UK law of all things.

Democrats are calling on some of the largest gaming companies to better protect children by extending new UK design rules to children in the US. The regulations could ban companies from selling in-game loot boxes to minors, among other restrictions. In letters to a dozen major gaming companies, including Blizzard, Epic Games, Microsoft, Nintendo, and Riot, Sen. Ed Markey (D-MA), Rep. Kathy Castor (D-FL), and Rep. Lori Trahan (D-MA) pressed executives to extend new UK design regulations to children in the US.

“It is imperative that Congress acts with urgency to enact a strong privacy law for children and teens in the 21st century,” the lawmakers wrote. “As we work towards that goal, we urge you to extend to American children and teens any privacy enhancements that you implement to comply with the AADC.”

You can read the entire letter here (PDF). One important section of that letter to gaming executives includes this.

Loot boxes go one step further, encouraging purchase before a child knows what the “bundle” contains— akin to gambling.3 Children are uniquely vulnerable to manipulation and peer pressure associated with in-game purchases and loot boxes. Experts suggest that Entertainment Software Rating Board (ESRB) ratings and parental controls are insufficient. 4 The AADC represents a monumental step towards child centric design by default.

And, with respect to loot boxes, that is a very interesting position to take for this group of politicians. Why? Well, primarily because the AADC has literally nothing to say about loot boxes. As in, it doesn’t even mention them. The AADC is also not a “law”, but a regulatory set of standards.

However, the code explicitly mentions neither loot boxes nor in-game gambling, nor ever really even alludes to them. While the subjects of loot boxes and IAPs came up during the UK regulator’s research into “Detrimental use of data,” it’s not a factor of the final publication. It’s certainly a stretch to see how the content of the AADC relates to what’s raised in the letter sent to US publishers.

And so, to summarize: a group of Democrats are attempting to gaslight the gaming industry into doing what they want by citing a regulation from another country that doesn’t even apply to its demands, all under threat of actual American legislation. “Do what we say even though our argument doesn’t make sense or we’ll force you to do it anyway” is not a great look for any politician, never-mind one attempting to apply this towards an industry that is absolutely protected by the First Amendment. The goal of introducing protections for children against micro-transaction practices in video games may well be a well-intentioned goal, but getting there by sneaky means doesn’t fill the soul with confidence.

But, then, so little about Congress does these days.

Filed Under: , , , , , , ,

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “4 Dems Pushing Game Companies To Drop Loot Boxes Pointing At UK Law That Doesn't Mention Loot Boxes”

Subscribe: RSS Leave a comment
49 Comments
Anonymoussays:

Because of their random nature, a whole lot of people consider them both a form of gambling (kinda)

I know others disagree, but I don’t consider loot boxes to be gambling any more than I consider buying a pack of baseball cards or Magic: The Gathering cards to be gambling (which is to say, not at all).

Also, I don’t see US legislators out trying to regulate CCG or baseball card sales. I don’t know if other countries have done so. Is it just that it’s "video games" that makes it so terrible?

and an affront to fair online competitive gameplay (definitely) because they allow those with money to be stronger in the game than those without money.

There are many games that allow real-money purchases to affect competitive gameplay to the detriment of those that don’t pay. Why is the randomness of the purchase a factor in this case, if the general "pay-to-win" is what’s frowned upon?

PaulTsays:

Re: Re:

"I know others disagree, but I don’t consider loot boxes to be gambling any more than I consider buying a pack of baseball cards or Magic: The Gathering cards to be gambling (which is to say, not at all)."

I hear this argument all the time, there are several major problems with that analogy. First of all, the problem with loot boxes is usually that they are "pay to win", meaning that the contents of loot boxes give a player a massively unfair advantage in a competitive game and players without those items are incentivised to buy multiple loot boxes to get those items. Where the contents of the loot boxes are purely cosmetic, akin to baseball cards, there’s far less controversy.

Second is that there’s a secondary market to obtain individual cards that doesn’t exist in many of the games in question – you can buy a rare MTG or baseball card from a trader if you wish, but in many games that have been controversial, the only way to get them are from loot boxes.

The third, related to the above, is that there’s no way to recoup losses by selling the end product. You can sell your duplicate cards, or even your whole collection if you give up the hobby, but the loot box money you spend is a sunk cost.

Games do exist where the secondary market is available, but the ones that have driven the controversy are the ones that encourage you to keep paying without any benefit unless you get lucky on the gamble.

"Why is the randomness of the purchase a factor in this case, if the general "pay-to-win" is what’s frowned upon?"

Because you don’t know what you’re paying for before you pay. Therefore, instead of paying $X for the item you need to "win", you may need to but many lootboxes at a cost unknown to the player before they start paying.

Everybody would be better off if "pay to win" doesn’t exist, but while it does it’s not exactly hard to understand why paying for 50 lootboxes that might not contain the item you want at all is fundamentally different from just paying for the single item.

Anonymoussays:

Re: Re: Re: Re:

The first part whilst an issue with loot-boxes isn’t gambling and could be dealt with by different regulations.

For the second and third not sure how the US defines gambling but here in the UK the ability to recoup losses actually makes physical trading cards closer to gambling than loot-boxes.

That is because gambling requires a chance to win/lose – so with physical Pokemon cards if one sells for more than the cost of the pack then it can be said you are gambling on buying packs to get the rare cards that sell to make a profit, but with loot-boxes you generally cannot cash out so there is no way to win/lose in the monetary sense so they all have the same monetary value (of zero or what the per card price of the loot-box is) – and not getting what you want doesn’t really count as a lose for gambling purposes.

If you define loot-boxes as gambling then pretty much anything with random contents is also gambling.

That’s not to say there might not be issues with loot-boxes around addiction, FOMO or being an aggressive business model but none of that is gambling and the issues should be sorted out with proper targetted regulations rather than twisting gambling regulations to cover them.

PaulTsays:

Re: Re: Re: Re: Re: Re:

"The first part whilst an issue with loot-boxes isn’t gambling and could be dealt with by different regulations."

Loot boxes do fall into the same arena as gambling, and people with a gambling problem that gambling regulations are meant to protect are affected by this practice in the same way, only without protection. Look at the way these purchases are distributed, and what you often find is that a large proportion of income related to loot boxes tend to come from a small number of users spending hundreds or thousands of dollars. It’s unlikely that people would spend thousands of dollars on a game if they weren’t coerced by loot boxes in that same way that people often spend way too much money on scratchcards and the like.

"That’s not to say there might not be issues with loot-boxes around addiction"

Isn’t that a damn good reason to place restrictions on how predatory companies can exploit said restriction, as they do now with the almost identical gambling addiction regulations?

"none of that is gambling"

That’s a matter of opinion. So far, the mechanisms of a fruit machine, scratch card and loot box seems to be the same, except there’s far less barrier to entry for both the exploited and the exploiter in the latter case.

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

Purchases in free to play games are always highly concentrated. The portion of players that ever buy anything at all is a few percent at most.

You may believe gambling to be a matter of opinion but legally there is a specific definition which random drops in videogames don’t meet.

PaulTsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

"legally there is a specific definition which random drops in videogames don’t meet."

I suspect that there’s a lot of room to manoeuvre in those definitions and a lot of differences between territories.

Regardless, having spent some years working in the online gambling arena and having seen how those companies attract and keep the people who make them more money, and how little the videogame industry is in comparison, it’s clear to me that the same tactics are used, they just manage to get away with things they could lose their licence for if they were regulated the same way.

Anonymoussays:

Re: Re: Re: Re:

First of all, the problem with loot boxes is usually that they are "pay to win", meaning that the contents of loot boxes give a player a massively unfair advantage in a competitive game and players without those items are incentivised to buy multiple loot boxes to get those items. Where the contents of the loot boxes are purely cosmetic, akin to baseball cards, there’s far less controversy.

That the loot box has utility or a certain level of controversy associated with it doesn’t make it gambling. If you can get the uber-gun of death then it’s gambling, but if you can only get the unicorn mount skin, it’s not? That doesn’t make any sense.

Second is that there’s a secondary market to obtain individual cards that doesn’t exist in many of the games in question – you can buy a rare MTG or baseball card from a trader if you wish, but in many games that have been controversial, the only way to get them are from loot boxes.

Again, that doesn’t make it gambling. There are plenty of things for which a secondary market exists that aren’t gambling.

there’s no way to recoup losses by selling the end product. You can sell your duplicate cards, or even your whole collection if you give up the hobby, but the loot box money you spend is a sunk cost.

And again, that doesn’t make it gambling. There are plenty of purchases you can make (that aren’t gambling) for which you can’t recoup your investment.

As was stated by another commenter, while these may be valid issues with regard to regulating loot-boxes, these points don’t appear to be relevant to whether loot boxes should be classified as gambling. That same commenter also said, "If you define loot-boxes as gambling then pretty much anything with random contents is also gambling." I agree with this, and I’ll add: Betting on a sporting event is gambling. I place a bet, and I might win a prize. If said sporting event has a monetary requirement to compete and a prize for winning, is participating in the event gambling as well?

I guess I should ask in advance of further discussion, exactly how do you define gambling?

Because you don’t know what you’re paying for before you pay.

The argument raised in the article is that loot boxes are bad because they are an "affront to fair online competitive gameplay (definitely) because they allow those with money to be stronger in the game than those without money." This is true regardless of whether the P2W items are randomized. While it might suck for the buyer if they have to buy 50 lootboxes before they get the ubergun of death, it’s still just as bad for fair play if they got the gun out of the first box. If loot boxes were cosmetic only, the fair play argument against them goes right out the window. Therefore, in the context of the article’s point on fair gameplay, I don’t see why the randomness is relevant; the issue is really P2W itself.

PaulTsays:

Re: Re: Re: Re: Re: Re:

"That the loot box has utility or a certain level of controversy associated with it doesn’t make it gambling."

No, what makes it gambling is that people are paying money to access something that may or may not be worth the amount of money they paid, based on a level of chance that typically favours the people offering the purchase.

"If you can get the uber-gun of death then it’s gambling, but if you can only get the unicorn mount skin, it’s not? "

If you specifically want the gun, but have to repeatedly pay to maybe get different things up until an unknown time when you win the thing you want, how is it not gambling?

"There are plenty of things for which a secondary market exists that aren’t gambling."

Again, most of the controversial games are the ones where it’s not possible to access a secondary market for what you actually want, or to resell the items that you don’t want.

"There are plenty of purchases you can make (that aren’t gambling) for which you can’t recoup your investment."

There are, but the vast majority of purchases have a secondary market where this is possible. The ones where it isn’t you usually know what you’re paying for before you pay for them. Nobody’s paying their electricity bill hoping that they pay it off with each individual dollar spent.

"Betting on a sporting event is gambling"

Erm, yes? Who says it isn’t? You seem confused.

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

If you specifically want the gun, but have to repeatedly pay to maybe get different things up until an unknown time when you win the thing you want, how is it not gambling?

If I specifically want a red gumball out of a gumball machine, but I have to repeatedly pay to maybe get different colored gumballs up until an unknown time when I "win" the thing I want, is that gambling as well? Based on what you said here, the answer would be yes.

However, if my desire was "a gumball" instead of "a red gumball," use of the machine wouldn’t be gambling anymore (according to your argument), despite no change to the act itself. That’s absurd.

Again, most of the controversial games are the ones where it’s not possible to access a secondary market for what you actually want, or to resell the items that you don’t want.

And again, that it’s controversial doesn’t make it gambling.

It seems to me that the points you raised in your argument seem to be directed more to the claim that "loot boxes are bad" than "loot boxes are gambling." They are different debates, and to be clear, I am not attempting to debate "loot boxes are bad" with you – I don’t much care for them myself. I’m questioning your definition of gambling.

Erm, yes? Who says it isn’t? You seem confused.

Not at all. You’re (perhaps intentionally?) not addressing the point I was making. The point is this:

Suppose a sports contest exists, for which there is an investment required to compete, and for which there is a prize if you win.

Betting on this contest also requires an investment, and there is a prize if you win.

Betting on the contest is generally considered gambling. There doesn’t seem to be much disagreement on this.
Competing in the contest is generally not considered gambling. Yet both are "invest value for a chance to win." So, wouldn’t competing also be gambling? If not, why not?

PaulTsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

"If I specifically want a red gumball out of a gumball machine, but I have to repeatedly pay to maybe get different colored gumballs up until an unknown time when I "win" the thing I want, is that gambling as well?"

Does having the red one give you advantages in life? Is the red ball more valuable on the resale market than other ones?

You’ll note that I have no problem with these things for purely cosmetic "prizes", so the colour of a ball is not an argument that has any meaning here.

"Betting on this contest also requires an investment, and there is a prize if you win."

Betting being a synonym for gambling…

Anonymoussays:

Re: Re:

It’s a rather convoluted discussion since many games don’t allow you to sell items you unbox. But in a game like CSGO where you can sell items you unbox people are opening cases with the goal of getting something they can sell for a profit.

While I think CSGO’s system is better since I believe you should have a right to sell things you own, the profit motive seems to fundamentally change the act of opening a loot box. If all you want is some skin once you get that skin you’re done. When $2.49 for a key and $1 or so for a crate can potentially net you an item worth $200+ a permanent incentive to gamble exists.

Trading cards occupy a weird gray area where the collecting and profit motives are just about equal. But there are apparently enough people who only care about the profit that Target now refuses to sell cards since people were fighting over them.

n00bdragonsays:

Re: Re:

Hot take: Baseball cards and Magic: the Gathering ARE gambling, they just aren’t big enough for regulators to pay attention to. One of the key aspects of trading cards is that the rarest (and in the case of games like MtG, the most powerful) cards are valuable. The companies that produce them are EXTREMELY careful to never ever acknowledge that the cards themselves have value but it’s crystal clear in what they choose to print and when that they are fully aware of how valuable certain cards will be and, particularly with reprint sets, much fuss is made about making certain that packs contain a certain amount of "value". Just because you wink and nod and never say the dollar value out loud doesn’t mean things don’t have value, particularly if you can directly sell the thing you get on a market for dollars.

That One Guysays:

'Hmm, no.'

Yes, I’m sure massive game companies will just be falling over themselves to reduce or outright eliminate an insanely profitable part of their business model exploiting players because a couple of politicians asked them to, especially after breaking out the all powerful ‘think of the children!’

PaulTsays:

Re: Re: Re: Re: 'Hmm, no.'

"But if your game is good enough people will definitely tolerate a battle pass and loot boxes"

Or, enough people will just not pay at all to lead to front-end losses that publishers are then encouraged to recoup by rinsing the players further via tactics that further exploit the same things that cause problems with gambling addicts. I can name several games that I was ready to play on day one that I have never played because of these tactics becoming too odious for me to support with a full price purchase. How many lost $60-80 purchases are they trying to recover by convincing people who can’t afford to pay more for passes and lootboxes to keep paying?

Ryunosukesays:

Re: Re: Re: Re: Re: Re: 'Hmm, no.'

you may recall a few years ago that EVE online had a massive in-game riot due to this. It got so bad that CCP Games had to physically fly the CSM (a group of players voted by other players to talk to the devs) to ICELAND for a weekend to talk about this very issue.

Also didn’t the UK/EU game industry self impose these restrictions in face of legislation, kind of like what RIAA/MPAA did in the 80’s?

I do support loot boxes and microtransactions, as long as they stay cosmetic, once they become an in-game advantage… not so much. This is what is facing New World right now, and it hasn’t even launched yet.

Anonymoussays:

Re: Re: Re: Re: Re: Re: 'Hmm, no.'

That’s the ticket, really. Loot boxes work great in free to play games because the developer has nothing to lose from players who don’t want to pay.

It’s very different for paid games, whose initial price be more than the average player’s spend on in-app purchases (since vast majority of players never spend anything on IAP). At the very least they would have to make the lootboxes unimportant enough to not turn away too many players. People are a lot less willing to overlook things for paid games than they are for free games.

And then for added effect if they drive away too many players, the few big spenders won’t want to spend money either if there’s nobody to play with.

That Anonymous Cowardsays:

Could someone please remind these assholes we have a pandemic raging across the country because they lack the will to stand up to Trump & his bootlickers?
Then maybe they could save the people about to be evicted.
Then maybe make sure our water won’t kill us.
Then maybe make sure bridges won’t drop pieces and kill us.
Then maybe make sure that the homeless are getting the vaccine.
Then maybe deal with that pesky global warming thing.
Then maybe deal with the inequality that has flourished on their watch.

And then after a few thousand other things that citizens ACTUALLY care about you can bring up your loot box raging when we live in a utopia and loot boxes are the worst fucking thing we are facing.

In the meantime, please fuck all the way off with this bullshit.
None of you understand what the hell the internet is and isn’t and you refuse to get educated because then you couldn’t push these pointless demands to score points with your supporters who seem to think this matters more than human life.

Look at what you have done & try to pretend you can feel shame you worthless sacks of crap.

Anonymoussays:

an affront to fair online competitive gameplay (definitely) because they allow those with money to be stronger in the game than those without money.

Isn’t that general to games that allow buying anything at all?

I know plenty of games that allow players to substitute real money for pretty much everything. Want to level up without grinding, pay for it. Want lots of resources, just buy them. Don’t want to wait for your buildings to finish construction, pay to skip the timer. Lost a fight, pay to respawn at full power. A month-long event starts and you can’t wait to show off, buy all the rewards on day 1.

Lootboxes are nothing special, they just get attacked because the "gambling" strawman is an easy target.

Stephen T. Stonesays:

Re:

Predatory capitalist mechanisms in videogames are predatory no matter the form they take. Lootboxes are one of the worst forms of this predation, though. While this may be a hydra situation??cut off one head, two more take its place??cutting off the lootbox head would still be damned satisfying.

Anonymoussays:

Re: Re: Re:

Predatory capitalist mechanisms in videogames are predatory no matter the form they take.

Sure, but don’t you think it’s important to categorize and then attack the problem correctly?

For example:
Copyright infringement is bad (or arguably so), but it isn’t theft.
The lootbox mechanic is bad (or arguably so), but it isn’t gambling.

Anonymoussays:

Reward?

[loot boxes] are a randomized reward, typically after a purchase

Is this accurate? I was under the impression that he loot boxes themselves were being purchased. If not, what’s actually being purchased? Are loot boxes truly "rewards" for other purchases, or are the "purchases" merely shams to work around gambling-related laws?

Wikipedia, for what it’s worth, says people are buying the boxes directly, or buying "unlocking codes" for boxes "received" as a reward (but that seems like obvious bullshit, telling someone they’ve already got some unknown items and they just need to pay to access them). I see nothing about them being given as rewards "after purchases". The quoted letter also suggests people are buying the boxes.

That Anonymous Cowardsays:

Re: Re: Reward?

From my own experience.
Heroes of the Storm has loot boxes.
You can ‘win’ one by leveling characters & your entire account (math about total levels and such).
Sometimes the loot boxes are themed, they did a ‘Mexican Wrestling’ theme.
Skins for various heroes as luchadors, mounts based on the same theme.
You could purchase loot boxes with real world cash, with in game gold you purchased or won, or shards (get a duplicate item it gets turned into shards you can use to get things you don’t have).
Occasionally you get an XP boost for a short period (also straight purchase available).

There is nothing in the boxes that can’t be obtained via other mechanics in the game. Nothing in the boxes gives players a actual thing that lets them dominate others who haven’t purchased it. (The XP boost just advances your level faster, but its not unlocking special powers & such)

Earlier someone compared them to packs of Magic the Gathering, and its very similar. You purchase (sometimes win) packs as a prize, there are x commons x uncommon 1 rare or better in each pack. Everyone has the same number of cards in their pack, but some cards are stronger/better.
The more packs you buy the more chances of getting the best cards.

That seems less fair than the HOTS loot boxes because only the xp boost gives any in game benefit & those benefits mean you can get more cosmetic upgrades but no competitive edge.

Some sketch phone games sell loot boxes in large qty.
(See also the stories about kids charging $50K on moms credit card)
In those loot boxes they often are the only way to move forward in the game without spending weeks grinding in game doing the boring things & they let you catapult you ahead of others.

Loot Box means different things but its just a label that tried to cover to many similar but sometimes very different things. Some are unbalanced and the kid who can charge the most to moms credit card will win because they bought the best others are oh hey I got a pink horse any of my characters can ride, its just like every other horse in the game just a different color I can use to match a pink skin I have for one of my characters it changes nothing about game mechanics.

Anonymoussays:

Re: Re: Reward?

Some games give out actual boxes as rewards for gameplay and then you have to pay to open them (where the name lootbox originates from), others have a more vending machine type interface for buying stuff directly. Same effect, really. Buying random items.

The currency used is usually possible to acquire in some quantity through gameplay with more available for real money. In some games, it’s possible to get plenty enough stuff for free over time and paying just makes things go faster, others can be frustratingly stingy about it. The latter are usually best avoided unless the items sold are only cosmetic.

Anonymoussays:

Re: Re: Re: Re: Reward?

Some games give out actual boxes as rewards for gameplay and then you have to pay to open them

Right, but that’s blatent psychological manipulation. There’s no "reward". In reality the player has received nothing of value, and the game pretends otherwise to get the player to buy an item. It’s basically exploiting the endowment effect. Even someone who’d never think of "buying" an in-game item might feel some unease about being unable to see or use an item they’ve "already earned".

others have a more vending machine type interface for buying stuff directly.

As above, receiving an item in exchange for money isn’t a "reward". Just a normal purchase, even if the buyer doesn’t know what’s in the "box" (which sometimes occurs in the real world, e.g. with auction lots).

Annonymousesays:

Games, Gamers and the encouragement of Gambling

"Pro" level and committed hobbyists stay well away from such games. Sadly the administration, board etc, see such as an easy windfall. Moreso if the games are subscription based with a steady base cashflow, coughactivisiontcough.

Most of the lootbox disease began with free to play phone and browser games already rife with advertising. Now don’t get be wrong, as a dedicated player with some skill you can make the rankings but with the knowledge that the majority of opponents got there with a credit card. Very few games stuck with cosmetics and some such items that have zero in game effect because having useful or rare drops provides a much greater cash flow.

PaulTsays:

Re: Re: Re: Re: Re:

"If I specifically want a red gumball out of a gumball machine, but I have to repeatedly pay to maybe get different colored gumballs up until an unknown time when I "win" the thing I want, is that gambling as well?"

Does having the red one give you advantages in life? Is the red ball more valuable on the resale market than other ones?

You’ll note that I have no problem with these things for purely cosmetic "prizes", so the colour of a ball is not an argument that has any meaning here.

"Betting on this contest also requires an investment, and there is a prize if you win."

Betting being a synonym for gambling…

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Report this ad??|??Hide Techdirt ads
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...