American Federal Trade Commission agrees to investigate loot boxes

Many months ago, EA sparked a worldwide crackdown on microtransactions, in particular loot boxes. Countries like Belgium classified the pay-to-win mechanics in Star Wars Battlefront II as gambling and banned them. Loot boxes can be found in numerous titles and usually cost real currency. They include randomized items so players have to keep on buying them to unlock the items they want.

According to a report by Polygon, the American Federal Trade Commission (FTC) has agreed to investigate loot boxes, following an official request by Senator Maggie Hassan of New Hampshire. Hassan said, "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." While the Entertainment Software Association (ESA) claims that they don't harm anyone, children are more susceptible to getting addicted due to their slots-like nature.

Polygon reached out to the ESA and the organization said, "Loot boxes are one way that players can enhance the experience that video games offer. Contrary to assertions, loot boxes are not gambling. They have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase. They can enhance the experience... but have no impact on those who do not."

However, just because loot boxes have no "real-world value," it doesn't mean that they don't cost "real-world" currency. It'll be interesting to see how the FTC rules because we've come across many children who have become addicted to buying them, and have even spent thousands of dollars as a result.

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Asher Madan

Asher Madan handles gaming news for Windows Central. Before joining Windows Central in 2017, Asher worked for a number of different gaming outlets. He has a background in medical science and is passionate about all forms of entertainment, cooking, and antiquing.

  • "However, just because loot boxes have no "real-world value," it doesn't mean that they don't cost "real-world" currency." Or have the same effect on the pleasure/reward centers of your brain as gambling. While the act of gambling is certainly an issue when it comes to minors, it is also an issue when it comes to those who are easily addicted to this type of activity.
  • True, as long there are mechanisms to spend real world currency it is gambling. Furthermore it's impractical to screen gamers to see if the have tendency to be easily addicted to these activities. Not to mention the moral and human rights violations such a policy would cause.
  • Well, the entertainment software association's arguments are very poor and don't really hold a candle to scrutiny.
    Loot boxes wouldn't "harm anyone" if they could only be bought by in game currency and there was zero mechanisms of using real world currency.
    As long there are mechanisms to use real world currency it is still gambling, as the only difference between loot boxes and buying the items out right from a store is the randomised element.
  • This is likely going to come down to technicalities. What does the law itself say? If there is no money payout, it may not meet the current "legal" definition of gambling. It may take congressional action to change that.
  • I guess my question is where does the line get drawn? Any "blind box" product serves this same purpose (e.g. trading card booster packs, LOL dolls). These have been marketed to younger groups forever with no real complaints, so I'm curious to see if these similarities are put into consideration.
  • The difference between that is you get a physical element to trade. Here in this instance you get no physical element or product to use despite spending real money. Similar to slot machines where you have to pay until you get the reward you want.
  • Precisely. There are thriving markets for collectible items awarded randomly : trading cards, Disney Trading Pins, etc. There is a path to improve a collection by trading with other collectors (and children can be shrewd and vicious traders of pins, I'll tell you now). This does not exist with loot boxes.
  • I guess it's just a very blurry line for me. Tangible or intangible, one will generally only spend money on what they view as valuable to them. In the examples of casino gambling, you're very much going for a quite material item, which is more money. Does this sooner liken to an Overwatch virtual loot box or a pack of Magic cards? Is the debate more based on form (material vs non-) or implementation?
  • @fitchalcyone. In regards to Casion gambling, the ultimate goal is yes to win more money but in a slot machine you generally have other "rewards" such as free spins etc. So essentially it becomes a bottomless pit, especially when you factor in the actual mechnical mechanisms the casinos can employ to force people to spend more money. This is similar to loot boxes, where the randomising element is actually controlled by the game developer / publisher. Therefore they can simply make it easier or hard to obtain the "loot" a player wants. Physical Trading cards is all about chance and probability when buying a pack of trading cards - as once they are packaged and sold, they can not be altered in any shape or form without physically altering the contents.
  • @ Keith Farmer, indeed there is thriving collectible market as otherwise game developers wouldn't offer collectible goodies with limited edition game packages and what not. Sure, there is that element of higher ROI but that depends on the cost of involved in creating collectible game packages. In regards to the pins, haha I can imagine... Kids are pretty darn smart. I find the entire prospect of loot boxes in premium games galling, I can understand the fiscal complexities for them in free to play MMOs. As done right, they can be a massive money maker for the game devs / publishers.
  • I would expect implementation. Purely cosmetic enhancements (pay for a chance to receive the purple pants!) versus things that impact actual game play and winnability (pay for a chance to get a bigger gun) I expect will drive some portion of the argument. But more than that I expect the differences between lot crates and collectibles, and accessibility by children. To the difference between gambling and trading cards: the lack of exchangeability is pretty stark. If the items were tradeable, the situation would be different, taking us to trading cards. If the items could be converted back to cash, it would also be different, again back to trading cards. If children with no impulse control were NOT involved, it would be very different indeed: that goes back to whether minors are allowed to gamble at all. The purchase is much too easy (a big difference versus trading cards, where you generally have to engage a store cashier instead of a dialog box) and apparently hard to police. Microtransaction-based play relies on this very behavior in people, as do slot machines and streetside cup gamers. The only people who don't lose are those who recognize they are paying for brief entertainment, rather than lasting reward. Add parental controls, make it harder to purchase, and most of the problem would be gone, leaving it to adults complaining about other adults buying an advantage in a game, like adults who pay for the bonus lines at the slot machine.