American Federal Trade Commission agrees to investigate loot boxes

Judy Cobb
November 30, 2018

The Federal Trade Commission (FTC) has chose to investigate loot boxes in video games.

"Loot boxes are now endemic in the video game industry and are present in everything from casual smartphone games to the newest, high budget releases", the senator said. She also noted that such microtransactions could "represent a $50 billion industry by the year 2022". If the FTC follows through, it will evaluate the negative impact of loot boxes and update the committee on the outcome.

Just last week we reported on a study conducted by the Gambling Commission, which highlighted a clear link between child gambling and video game loot boxes.

If the Senator's concerns are for children playing the game, then a more risky part of it might be that, since children paying for loot boxes generally have access to a form of money, they're more vulnerable to scam sites and credit card thieves.

Thus far, Japan, the Netherlands, and Belgium have all taken action to regulate loot boxes.

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The ESRB has already made a movement with its rating system to note when games had "in-game purchases" available.

After detailing the potential issues with loot boxes, Senator Hassan asked FTC chairman Joe Simons to undertake an investigation. Much of the industry has been leaning on loot boxes, which offer more consistent revenue sources than one-time game sales, and lawmakers have grown increasingly concerned about the risks this approach to monetization poses to America's youth.

The Entertainment Software Association, for example, sent this position statement on loot boxes to Polygon following that Senate hearing. The loot boxes "have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase". These virtual items give the playable characters special in-game abilities, often at the cost of real-world currency. I've got the feeling that whatever happens, it won't be over quickly. Whatever you think about them personally, they have clearly been abused in current years, and publishers may be seeing true repercussions for them.

Up to now, loot boxes were a reliable, if not a little shady, form of income for game developers.

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