Economist argues that the ESRB is wilfully promoting gambling to children

If you’ve been following the lockbox/lootbox controversy over the last couple of weeks (or last multiple years, ahem), then you know that opponents of the practice in online games seldom actually argue “for the children” since let’s face it, the MMORPG playerbase skews well into adulthood. Adults are the ones being affected.

Academic Ramin Shokrizade – well-known for his scholarly economic articles and recent treatise on how MMOs are dying because of poor design rather than insufficient demand – has nevertheless jumped into the fray with a similar argument, suggesting that in declaring lootboxes not gambling and refusing to intervene, the ESRB is effectively “promoting children’s gambling.”

In his new article on Gamasutra, Shokrizade says that the ESRB’s statement about lootboxes not being gambling connotes a misunderstanding about what an “element of chance” actually is.

Using a longform example about bread and pretzels that you probably need to read in full, he explains that while actual legal gambling institutions use a government-regulated “truly random” model in their games of chance, unregulated online games are currently using a combination of models that are much dodgier, including a “rigged” model he says is most common. Worse still is his accusation that companies (like Facebook) are employing (and will continue to employ at greater rates) “psychometric modeling” — in a nutshell, they can model whether you’ll keep buying lockboxes (or what have you) compulsively until you win or give up after two, and they do it based on demographic information gathered about you. And then they customize whether you “win” or not based on those predictions. Which is starting to sound not particularly random at all, certainly not in the “legit casino” sense.

“The ESRB, after talking to industry, told us ‘This isn’t the gambling you are looking for,’ and used their Jedi Mind Trick on consumers,” he says, obliquely, if I read him right, accusing the organization of profiting from its immobility. He also touches on China’s regulation of gacha mechanics and how Blizzard was forced into a mild retreat because of it – but only a mild one.

“I use Overwatch as an example here not because this is the only such product. It is possibly the biggest product and as such it is the alpha trend setter. Other developers will follow the lead of the alpha. Chinese regulators, despite their best intentions, got gamed. American regulators did nothing other than open up a pretzel factory. The next move is on the part of EU regulators, who seem to be approaching the situation cautiously but deliberately. I warned them in 2013 when they summoned me to the ICPEN summit in Panama that they would be playing regulatory Whack-a-Mole with our industry for years to come, and they are finally realizing just what I meant. I am going to pull up a chair and watch the show, while I eat my popcorn. This show has been going on for years now but it can’t go on forever. I’m guessing it lasts longer than Benny Hill but not as long as Dr. Who.”

Source: Gamasutra
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48 Comments on "Economist argues that the ESRB is wilfully promoting gambling to children"

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miol
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miol

Btw, someone from Call of Duty: WW2 seems to have taken notice of how awesome it is to publicly open lockboxes in Neverwinter! -.-

How to open a Supply Drop in WW2 from WWII

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Armsbend

Realism is amazing. It is like we are THERE.

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Ket Viliano

Stupid Reddit, this clip is a legitimate fair use as a critique or review.

I like how it still plays as a gif.

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John Kiser

See the issue realistically unless this was a copy given out to a reviewer specifically for that purpose is that “betas” are often covered by NDA clauses and subject to not posting anything about the game really.

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Jacobin GW

When Valve shut down skins gambling in CS:GO, which is very similar to MMO loot boxes, a big reason was preventing underage gambling and lawsuits that followed.

‘For the children’ is highly relevant since that is a key piece of gambling regulation which online games have been able to get around.

They specifically want to target people who are naive about casino tactics and dont get that devs can tamper with the win rates under the hood at will. They could conceivably improve win rates for first time buyers and then reduce them later which is illegal for casinos.

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Wilhelm Arcturus

Still not gambling. He had to go to real world items with different real world values to make his point. But the ESRB’s view is that virtual items have no real world value, so the whole bread/pretzel things is bogus, because his argument is predicated on real world value.

It is still a shitty mechanic and you should feel bad if you pay money for a lockbox, but going at it by trying to get it declared gambling is a dead end… unless you get the government to declare virtual goods to have real world value, in which case we’re all going to be much, much worse off.

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dixa

this isn’t universally true. virtual items have real world value in star trek online, eve online and im’ sure many other games run by perfect world.

you can directly turn the sto equivalent of cash store money into in game credits by buying and selling tradeable items from the cash shop and selling on the in game auction house, which is then used to buy items from lockboxes in this game.

when you consider the best ships in the game across most categories are only available in those lock boxes…

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Wilhelm Arcturus

If you cannot turn the item back into real world cash, it has no real world value. Likewise, if your agreement with the company, which you agreed to in order to play, says everything in the game is theirs and you have no rights to any of it outside of the game, then we’ve either doubled down on “no value” or we’ve determined it was never yours in the first place.

Either way, just because there is an element of chance involved does not mean it meets the legal requirement for gambling.

Lockboxes are horrible. Don’t spend money on them and they’ll go away. But I’d rather have them as-is than invite the government in to regulate (and no doubt subsequently tax) what virtual goods have what value.

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Nosy Gamer

Weren’t we having this discussion 10 years ago and everyone agreed that we needed to keep the government out of our games? How times change.

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Stropp

In some ways the government has always been in our games. Some things have been illegal for as long as games have been around. Some longer.

Real gambling for instance is illegal outside of licences premises. If a game had a virtual casino where you could win real money and children were playing that, I’d expect the gov to step in.

If a game was a front for other illegal activities then that would require intervention too, no new laws needed.

It’s just things like lockboxes that might fall out of the existing laws, or in some gray area, that people are calling for new government regulation. I’m not saying that’s right or should happen, but lockboxes even if they are not technically gambling are like gambling and should be examined legally.

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John Kennedy

In a sense, it’s far worse than gambling. But that seems to be the best route to removing such practices. I suppose doing away with the pretense that items have to have real world value would make it easier to swallow.

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Brother Maynard

Of course they have, an irrelevant line somewhere in the EULA has no effect on what has or doesn’t have value to people – and consequently what they’re willing to pay for it.

The fact that game companies had to invent virtual currencies for these transactions is an indirect but clear proof that they too are aware that they’re on very thin ice here.

If it all was so clear as ESRB suggests (which is basically them sticking their collective head in the sand), people would be able to purchase in-game stuff directly for real cash, without the need to first purchase virtual gold… Why would any company create unnecessary steps between them and your money? It goes against the basic logic of any business. Unless, you know… lawyers: ‘you have to put that in, we need to cover our asses’.

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Wilhelm Arcturus

Tell me how you legally buy groceries with virtual goods from a video game and I’ll concede they have real world value. Otherwise this is just sophistry.

Sykes
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Sykes

Check the price of an account sold out of game with said virtual goods versus the price of a new account. The difference in value is the RMB you end up with in the end. For example: check the going rate for max-level characters sold by Chinese internet cafes that charge customers for coffee while leveling those characters for them at LAN parties.

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Brother Maynard

It’s not so difficult to figure out the value, in addition to the obvious – sell virtual stuff (Steam, ebay, any other online market place) and buy whatever real world item you need.

And that’s not even entering the world of subjective value, which is equally important – anything from your time and effort (which also have a quantifiable component) invested in acquiring virtual goods and similar stuff.

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Serrenity

Like I said before, our lives are becoming increasingly mediated and lived in virtual spaces. It’s really only a matter of time before some court decides to rule that virtual world items have real-world value. We just pretend they don’t right now — people buy and sell accounts in underground-market transactions all.the.time. The legal reasoning so far for ignoring those underground-market buys/sells of accounts is because they violate the ToS of the games — but neatly side-steps that literally every one of these publishers knows there’s an underground market for their games, they actively benefit from such a market, but condemn it in the ToS. So they get to say it’s bad, while still making money off of it and not really doing anything to stop it.

All that needs to happen is for a judge to decide that the thriving under-ground market is an indication that these virtual goods have value regardless of whether such an activity is in violation of ToS — and it’s not a huge stretch. People are voting, with their wallets to indicate that virtual goods have real value.

Additionally, one of the cases I looked at actually ruled that consideration/risk requirement for gambling was met (Soto v. Sky Union I think), so it’s also not a huge logical leap to go from ‘virtual currency has value’ to ‘virtual items have value’.

I mean, I totally get what you are saying that there will probably be unintended consequences for this and they’ll probably need to be specific legislation crafted around value in virtual games and how you acquire it, etc. I just think that it’s an outcome we aren’t going to avoid no matter how we slice it. Pretending otherwise is what’s going to get us in trouble, in my reckoning.

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Serrenity

He makes the same points I was trying to, albeit with more clarity and eloquence

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thalendor

And then they customize whether you “win” or not based on those predictions.

OK, so maybe it’s not gambling…

…it’s worse.

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MesaSage

The social contract lay in pieces on the floor around you. See lootboxes, page 97.

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Schlag Sweetleaf

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rafael12104

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kgptzac

I’m wondering who stands to lose profit if ESRB does add a “Lockbox” descriptor to their ratings. My guess is they are too lazy to do that.

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Schmidt.Capela

Those profiting would be:

– The customers, as those that care about this issue would be able to more easily make an informed decision.
– Games that don’t have lockboxes, assuming lockboxes drive more players away than they attract.

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Serrenity

I think if it comes out that publishers who had gambling-boxes in their games were manipulating the chances to increase their profits, a lot more people who start to care. I think a lot of people tell themselves the pleasant lie right now that it’s totally random and the system isn’t rigged — which in reality neither of those statements is true.

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Armsbend

A trickle of momentum is starting to occur – I am looking forward to watching them all burn. I hope a good many people lose their jobs and never work in the industry again. Maybe they can apply as card dealers in Reno.