Back in 2017, at the height of mainstream outrage over lockbox shenanigans, Belgium became one of the very first countries to take the problem seriously (instead of just passing the buck). The Belgian committee assigned to investigate concluded in November that “the mixing of money and addiction is gambling” and pledged to ban them. At the end of April of this year, the country effectively did just that. Its Gaming Commission spent several months investigating multiple games, ultimately finding that Overwatch, FIFA 18, and Counter Strike: Global Offensive are operating in violation of its laws specifically because of their lockbox mechanics.
At the time, we had only a few scattered quotes from a translated press release, but this week the Commission has released its entire report (and there’s even a version in English). Its goal is clear: to examine “whether the use of loot boxes in video games constitutes a gambling operation in the sense of the Belgian Gaming and Betting Act. ”
EA’s quarterly financial report and investor call turned out to be a doozy this year with quite a bit of useful news. To wit:
BioWare’s Anthem is set to ship “in the last quarter of the year, and in the last month of that quarter,” so if we’re counting by fiscal quarters, that’s March 2019, and no wiggling out of this latest delay, EA. According to PCGN, multiple execs inflated the hype, arguing it’s a “stunning and ambitious” game with a “fundamentally social experience.”
Also, in spite of industry interviews to the contrary, it appears that EA learned basically nothing from the Star Wars Battlefront II fiasco that drove the ancient lockboxes-are-gambling argument out of weary corners of the online gaming market and into mainstream politics. The plan going forward appears to be fighting the perception – now codified in Belgium – that lockboxes are gambling in the first place. “We don’t believe that FIFA Ultimate Team or loot boxes are gambling firstly because players always receive a specified number of items in each pack, and secondly we don’t provide or authorize any way to cash out or sell items or virtual currency for real money,” CEO Andrew Wilson said during the call.
Back in 2017, at the height of mainstream outrage over lockbox shenanigans, Belgium became one of the very first countries to take the problem seriously (instead of just passing the buck). The Belgian committee assigned to investigate concluded in November that “the mixing of money and addiction is gambling” and pledged to ban them.
Now, the country has effectively done just that. Its Gaming Commission spent several months investigating multiple games, ultimately finding that Overwatch, FIFA 18, and Counter Strike: Global Offensive are operating in violation of its laws specifically because of their lockbox mechanics.
So here’s an interesting case that could impact online game development in the US. Apparently, a few weeks ago the Ninth Circuit of U.S. Court of Appeals determined that a casual game, Big Fish Games’ Big Fish Casino, includes illegal gambling. You might be thinking, duh, it’s got casino in the name, of course it’s gambling, but that had nothing to do with the appeals decision, which returns the case to the lower district to reconsider. The ruling instead hinged on the fact that users have to keep buying chips (if they fail to come out ahead in their winnings of said chips, which they probably do because that’s how casinos work) to keep playing.
“Without virtual chips, a user is unable to play Big Fish Casino’s various games. […] Thus, if a user runs out of virtual chips and wants to continue playing Big Fish Casino, she must buy more chips to have ‘the privilege of playing the game.’ Likewise, if a user wins chips, the user wins the privilege of playing Big Fish Casino without charge. In sum, these virtual chips extend the privilege of playing Big Fish Casino.”
If you had expected the Netherlands to be leading the fight against lootboxes, you may be more clairvoyant than the rest of the population. After investigating 10 games, the Dutch Gaming Authority has found that four of the games tested feature lootboxes that violate the Better Gaming Act. That may not sound too serious until you consider that the offending games have eight weeks to make changes to the lootboxes to comply with the law.
Failure to do so can result in fines or just straight-up forbidding the games from being sold in the Netherlands. That’s a pretty big deal.
While the DGA did not specifically name games, the Dutch paper reporting on the situation cites FIFA ’18, Dota 2, PlayerUnknown’s Battlegrounds, and Rocket League as the offending titles. The remaining six titles are not in violation of the law but were still sharply criticized for the lootbox implementation, which is said to target younger players and encourage gambling. It’s also worth noting that each of these violations specifically pertains to tradeable items for real money, which just squeaks in as a gambling option.
How big a deal with the lootbox controversy that finally hit the mainstream last year? Pretty big, SuperData argues. In a new blog post, the analytics firm argues that “the loot box controversy hampered Star Wars Battlefront II out of the gate” as shown by the game’s monthly active users compared to its predecessor’s, and that the resulting dumpster fire has caused publishers to rethink lootboxes and self-regulate or at least modulate their greed – an effect we’ve already seen in the MMO industry too.
“At the upcoming E3, we’re likely to see presenters announce ‘no loot boxes’ or that paid content is ‘cosmetic only’ in order to get on the good side of creators and hardcore gamers,” SuperData predicts. “Loot boxes won’t disappear anytime soon given their success in games like Overwatch (over $600M of loot boxes sold through February 2018). In the short term, though, ‘No loot boxes’ will be the game industry’s own ‘gluten free water’ — and we’re likely to even see this slogan used to market titles where loot boxes would not make sense such as adventure games.”
Nexon isn’t the only Korean studio that has been targeted by the government and fined for dishonest practices with its online games and lockboxes. The South Korean Fair Trade Commission has handed out $950,000 in fines to the country’s studios for deceiving players and failing to provide accurate odds for winning any particular prize.
The three studios punished for their transgressions are Nexon ($875,000), Netmarble ($55,000), and NextFloor ($4,600). The Korea Herald notes, “The [South Korean] FTC’s actions have signaled alarm across the Korean game sector, as it could hurt the sales of in-game items — particularly randomized items, which users tend to continuously buy until they get a desired result — that contribute immensely to profits.”
Is this enough of a penalty to make the eastern market be more responsible with its lockbox policies, or are these fines merely a slap on the wrist? We will see.
If you’ve ever been frustrated over online games refusing to disclose the odds of winning anything in lockboxes, then get ready to do a little fist pump for justice. South Korea’s Fair Trade Commission just fined MMO company Nexon for its failure to do just that in a pair of its games.
While companies don’t have to disclose odds for lootbox or “gacha” capsules in the west, in eastern countries it is much more regulated. Nexon was dinged for its failure to do this in 2016 for Sudden Attack and Counter-Strike Online 2 in a possible attempt to cheat players.
The two fines levied against Nexon by the FTC are $5,000 and $900,000, respectively. The company said that it will comply by revealing gacha odds going forward.
Don’t call it a victory – nobody wins forever in the Star Wars universe – but there’s still reason to cheer in Star Wars Battlefront II today. EA has announced that it’s overhauling the entire progression system for the game. Readers will recall that outrage over the game’s lockbox gambling was the final chunk of kindling in the monetization dumpster fire that finally blazed over into mainstream media coverage at the end of 2017. (The “a sense of pride and accomplishment” line was being quoted in government hearings last month.)
“With this update, progression is now linear,” EA declares. “Star Cards, or any other item impacting gameplay, will only be earned through gameplay and will not be available for purchase. Instead, you’ll earn experience points for the classes, hero characters, and ships that you choose to play in multiplayer. If you earn enough experience points to gain a level for that unit, you’ll receive one Skill Point that can be used to unlock or upgrade the eligible Star Card you’d like to equip.”
Just for the record, we are not the only ones engaged in the discussion and controversy surrounding lockboxes and lootboxes as of late. YouTube channel Extra Credits put together an entertaining and informative video that brings everyone up to speed on what’s happening with all of this, even if you’ve been out of the loop.
The video does raise some concerns about what might happen if and when governments get involved in legislating lootboxes under gambling laws. Some of these concerns have to do with states that consider gambling illegal, access to games with “gambling” if you are under 21 years of age, varying forms of lootboxes, and studios worrying about lawsuits from players over bans if that person has digital property with monetary value. Regular readers will recall a few months back when our SWTOR columnist considered the direct implications for his own game too.
“There are a whole bunch of effects this legislation could have on gaming beyond simply restricting lootboxes as a model,” the video argues. “So we have to be incredibly careful about how we approach this legislation.”
The Entertainment Software Rating Board claims it’s taking steps to solve the lockbox crisis, in part in response to bills before multiple state governments as well as discussions in (and ultimata from) the US senate’s commerce, science, and transporation committee. ESRB President Patricia Vance told journalists today that the non-government body will mandate special labels applied to video game boxes notifying consumers that in-app purchases and cash-shop transactions are part of those games. It won’t be explicit to lootboxes, she argues, because “a large majority of parents don’t know what a lootbox is.” It’s set up a new website to explain parental controls to parents as well, though we don’t recall anyone asking for that.
But maybe don’t get too excited. Polygon argues that the proposal “feels like a plot to get legislators off the back of the industry, not a serious attempt to fix anything,” since pretty much every video game would have this relatively generic label and there’s an overt attempt to deflect all real responsibility to parents. Moreover, the ESRB still isn’t requiring publishers to disclose odds for their gambleboxes.
If it weren’t for my promise to write this article, I would have given up on Maguss in less than 15 minutes had I been a consumer.
I understand the game’s in open beta, but from the start it was repeating issues I’ve seen too many times: bad tutorial, terrible UI, and aggressive monetization the likes of which I’ve only heard of in terrible games and dating apps. Like many of you, I grow defensive when seeing industry terms used as shields against bad design when developers (actually) need funding to continue. I’m jaded, I’m suspicious, and I don’t want to be nice or patient about it, especially when my money is on the line. What sounded like a great Pokemon GO challenger left me once again questioning why I bother with video games as a hobby at all.
But then I got past it. I found some things I genuinely liked that were in and functioning (mostly) as advertised. No, I’m not a convert, but I’ve dug through the dirt and found a bit of gold, and if the developer, Mawa, is able to make some changes to the game before really trying to attract a launch playerbase, Niantic may actually have a rival in the location-based alternate reality game genre.
A lot of games have found ways to play with the idea of buying gold, usually with some form of currency exchange regulated by the game: You buy an item for subscription time with real money, someone else buys it for gold, you get the gold. TERA
has decided to cut out the middleman with the Federation Gem Crates
. You buy those, you get gems. What do you do with gems? You sell them to merchants for a lot of money.
Of course, it wouldn’t be a lootbox without some element of randomness, so you’ll never be sure of exactly what you get within a given crate. There are four different gem packages available, each one retailing for a different amount from merchants, so you could luck out and get a lot of money or wind up with very little money on a whole. But probably not, as player trial runs have shown it’s a bad bet.
So yes, it’s a lootbox selling in-game money. That’s a thing now.