Regulators around the world are teaming up to tackle the issue of “loot boxes” in video games, which critics have alleged are targeted towards children in a predatory fashion, designed to produce gambling-like results. Regulators from the European Union and the United States have hinted that they may crack down on the practice of allowing loot boxes in popular video game titles, which have increased in prevalence rapidly over the past decade.
15 disparate European agencies and American regulators will now be working together to examine whether the line between friendly gaming and predatory gambling is getting blurred.
according to EuroGamerNet. A signed declaration put forward by the 15 agencies and the U.S. state of Washington has four primary area of concerns that regulators will help to address in the near-future.
Loot box controversy
Loot boxes, by far the most controversial issue surrounding gambling in gaming, take up a fair amount of the declaration and are coming under increasing regulatory scrutiny around the globe. State representatives in Hawaii have gone so far as to draft legislation barring minors from purchasing loot boxes, according to Kotaku. The loot boxes offer players a selection of in-game goods, like cosmetic “skins” for their characters or weapons and have been criticized as being angled specifically towards children.
Typically, these loot boxes are purchased with in-game currencies that can be purchased with real cash. “It sort of obfuscates how much money they're spending. And people are lazy, so they don't do to the mental conversion from Gold Coins and Diamonds to dollars. So they lose track of how much they've spent, and they spend more,” a psychologist familiar with loot boxes told CBC.
Regulatory attempts
Attempts to regulate such loot boxes and other online casino offerings on popular video games haven’t made much progress before. Regulators hope that their newly-united efforts will prove more successful, though.
“We encourage video games companies to work with their gambling regulators and take action now to address those concerns to make sure that consumers, and particularly children, are protected,” Neil McArthur, chief executive of the UK Gambling Commission, said.
Like most gambling initiatives, game developers don’t necessarily profit from individuals buying these cosmetics. Rather, they’re on the lookout for “whales,” or individuals who single-handedly spend thousands or even tens of thousands of dollars on video game microtransactions. The Netherlands and Belgium have already taken unilateral action to ban certain microtransactions in specific games, Tech Crunch noted.
