Passionate PC gamer but ToeJam and Earl is still one of my favourite games.
Earlier in the year, both the Netherlands and Belgium declared that certain loot boxes breached their respective national gambling laws. Now, the Federal Trade Agency in the US has waded into the matter and has announced that it too is investigating the thorny issue of loot boxes.
For those of you who haven’t encountered a loot box before, these are virtual in-game containers which when opened reward players with random items to be used in-game. These rewards often come in the form of skins, voice packs or emotes which usually don’t affect the core gameplay mechanic. That said, we have seen some games attempt to push the boundaries so loot boxes do grant rewards which provide actual gameplay advantages. Examples include items which decrease ability cooldowns or augment certain weapons (here’s looking at you, Star Wars: Battlefront 2).
There is already plenty of controversy over loot boxes and whether certain rewards are in fact only ‘cosmetic’ and do not impact on gameplay. But the current spotlight focuses on whether loot boxes are a form of gambling and should, therefore, attract regulation. Because loot boxes can be bought with real money yet players only have a chance of getting an unknown reward, it is claimed that this is a form of gambling.
The FTC has highlighted that “loot boxes will represent a $50bn industry by the year 2022”, referring to a separate report by Juniper Research. This might come as a surprise to some and demonstrates just how lucrative loot boxes are. No doubt the FTC’s involvement will make game developers and publishers pay attention if they see their revenue streams being potentially threatened.
Elsewhere in the world, Australia’s Environment and Communications References Committee has advised the Government to review loot boxes in video games. In Belgium, Square Enix has pulled three mobile games – Mobius Final Fantasy, Kingdom Hearts Union X and Dissidia Final Fantasy Opera Omnia – given that nation’s ban on loot boxes. And, back home in the UK, the Gambling Commission recently reported that 31% of children have opened a loot box in a video game. The Commission, however, stopped short of saying that loot boxes are gambling or act as a gateway to gambling.
It will be interesting to see if the position of the UK’s Gambling Commission changes given the FTC’s input, but also in light of the tightening regulatory environment of gambling in the UK; a good illustration being fixed-odds betting terminals, where the maximum stake which can be placed is due to be reduced from £100 to £2 in April.