Loot Boxes in Games Draw FTC's Attention

Angelica Greene
November 30, 2018

New Hampshire Senator Maggie Hassan was one of several U.S. politicians to express concern over gambling-like mechanics in video games. It's that reason that Hassan wants them investigated, having equated loot crate's monetization tactic to gambling. Along with his declaration, Senator Maggie Hassan said that loot boxes are now "endemic" to the video game industry and that children may be "particularly susceptible" to such business practices. The massive number is supported by a $20 billion growth in four years, the total of which is equal to roughly half of the overall gaming industry's estimated revenue in 2017 and more than 50 times the value of the esports industry as a whole, according to market research firm Newzoo. This follows regulation of loot boxes in Belgium, The Netherlands, and Japan, as well as troubling reports on the dangers of loot boxes from gambling commissions around the world. Should loot boxes be banned? She wrote the Entertainment Software Rating Board (ESRB) earlier this year to ask how it rates games with loot boxes, and in response it introduced an "in-game purchases" label.

Up to now, loot boxes were a reliable, if not a little shady, form of income for game developers. Now we may get some resolution to the question of "Are loot boxes a gateway to gambling?" here in the States.

An Australian Parliamentary committee has issued a report calling on the government to undertake "a comprehensive review of loot boxes in videogames".

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Not everyone agrees that loot boxes pose a problem. The Belgium government even declared earlier this year that loot boxes in video games are illegal under Belgium gambling laws and has called on various publishers to remove the systems from the games in Belgium otherwise they'd be subjected to a criminal investigation. Are loot boxes a danger when it comes to gambling, or simply part of the experience?

The report opens with a definition of loot boxes as "a broad concept extending to any model that provides a consumer with the option of making small purchases within a game or other application", using either real money or "game points". "They can enhance the experience. but have no impact on those who do not".

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