The FTC commits to investigating video game lootboxes following US Senate subcommittee hearing

    
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Readers following the long-running lootbox/lockbox debate will recall that back in February of this year, New Hampshire Senator Maggie Hassan, who sits on the Commerce, Science and Transportation Committee, questioned FTC reps about gaming addiction and lockboxes as well as urged the ESRB to overhaul its ratings process in regard to lootboxes.

Perhaps you thought that would go nowhere, but you’d be wrong. During yesterday’s Consumer Protection, Product Safety, Insurance, and Data Security subcommittee hearing focusing on oversight of the FTC, Hassan reasserted her concerns, quoted from the UK Gambling Commission’s recent report on lockboxes and kids, and asked each of the FTC reps present to commit to an investigation on the effects and impacts of lootboxes. And the FTC agreed.

The ESA issued a statement to Polygon about the decision; it will surprise no one (and the last clause in particular seems a hard sell in gameworlds governed by pay-to-win):

“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 for those who choose to use them, but have no impact on those who do not.”

You can watch the entire committee meeting on the Senate website, or just check out the relevant clip of Hassan’s questioning on her own YouTube.

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Mr Poolaty

They need to investigate these companies like Bethesda that bait and switch or the while Landmark/EQNever fiasco!!!

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Geoffrey Smith

A. Legit lol’d at seeing it was Hassan again. As a NH resident, I already loved her. Then when one of her interns told Trump to fuck off, I loved her more. And now? More more.

B. The ESA’s statement is hilarious. If loot boxes had no real world value, why would they need to specify in their ToS that you can not sell them outside the game? Such a statement is a tacit admission that they do, indeed, have a real world value.

C. There will be a court case on this in the US in the not at all distant future and they better have a better argument than that lined up.

PurpleCopper
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PurpleCopper

Why are physical booster pack cards okay and yet digital lootboxes are not?

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Bruno Brito

To be honest, i don’t think they’re ok. TCGs are one of the most p2w/grindy modalities of games out there, and i do believe that the gamers and industry were a bit negligent with realizing that.

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Geoffrey Smith

What Bree said.

I would also add/elaborate, that booster card packs don’t make the laughably absurd claim that they have no real world value. They acknowledge they are selling a product with a secondary market, which the ESA would have you pretend doesn’t exist.

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Matt Redding

If you’re thinking of something like Magic cards, each pack guarantees items of set rarity at set rates. There’s no further weighting within those, it’s not like there’s a 1 in a million chance your 1 rare card will be a black lotus. You’re going to get 1 of the rare cards on the sheet, equal chance. You’re going to get so many uncommons off the current run, equal chance.

With lootboxes and gacha games the odds are way more extreme. Like, 1 in 1000 chance of a certain limited character type of thing. The guarantees of what you will get are usually quite limited.

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Mr.McSleaz

There are plenty of sites that sell tradeable game items for Real Money so I’d argue that some of these items do in fact hold a real world cash value no matter what anyone tries to say.

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Rottenrotny

I would argue that they can have real world value to the individual.

Some people take gaming very seriously, I don’t think they realize the extent and real world implications of that.

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Helothane

The ESA statement reads like one big non-sequitur to me. Compare it to playing at a table in a casino. You use chips (not real money), you get something out of the experience (at least entertainment, in theory) and there is no one requiring you to play just because you are in the casino. Just because I can convert the chips to cash doesn’t magically make the casino gambling and the loot/lockboxes not.

It is that seeking the lucky strike of the RNG that they both have, and that is the gambling part. So does farming some dungeon for a particular piece of loot, you say? Yeah, but at least I am not spending real world cash to do so each time.

Andy McAdams
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Andy McAdams

From the legal perspective – the conversion back into cash IS important. Gambling is predicated on 3 pillars – consideration (up front buy-in), chance, and prize. Right now, consideration has to have legal value and the prize has to have legal value. They side-step consideration (though not always successfully) but using in-game currency and saying it’s not consideration. They say that because you can’t turn the prize into legal tender (aka – you can’t sell it to someone else without violating the ToS) it also doesn’t qualify as having value.

They’ve already lost in one case where they say the in-game currency does meet the requirements of consideration. The prize having value is where they hold out right now. Because the goods are digital and not-sellable, the courts have agreed that they don’t have legal value.

However, there is precedent in only places that invalidates that argument, like in digital music, for example.

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Helothane

Okay, I can see that from a legal perspective. However, to a gambling addict that may not be a distinction that matters.

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Dave

While I agree, we have to be careful how we “regulate” addictive anything (outside of regulations targeted at underage users). Reason being is that once you regulate (at a federal level) gambling/alcohol/etc for being addictive, that can then be applied to anything that’s addictive to people:

  • TV/Movies
  • Video Games (in general)
  • Food
  • Non-alcoholic drinks
  • Shopping
  • …etc

My only point is that at which point are Adults responsible for themselves and each other. I.E. If I’m an addict and can’t control myself, when does it become my spouse/family/friends responsibility to help me. If you let the Gov’t do it, they will always take the path of least resistance and most effective, which is usually just outright removal of something.

There are some things in this world that need to be addressed with our choices, our wallets, and not by the Government. Remember the Gov’t is also run by imperfect (and many times greedy, selfish people). They aren’t always trustworthy nor is it always best to leave these choices to them.

Another thing to consider, if loot boxes are “gambling” (and in some cases I feel they are, but I also believe that not all loot box systems are the same), then things like general random drops, humble monthly bundles, loot crate, etc could also be technically seen as “gambling” if the right (or wrong) person raises hell. Always think about all potential ramifications that something like this could lead to before jumping on a bandwagon.

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Schmidt.Capela

They side-step consideration (though not always successfully) but using in-game currency and saying it’s not consideration.

That doesn’t work, and for good reason. If that strategy was reliable, casinos and other gambling business would be exploiting that loophole to avoid being classified as gambling.

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Andy McAdams

I’d have to check the case history, but I think consideration was only met in one of the cases – the other 3-4 I looked at it the in-game currency wasn’t treated as consideration.

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johnwillo

While I think that something needs to be done about lootboxes, I am worried about what kind of rules a bunch of seventy-year-old white guys will come up with for the video game industry. E.g., “Every time the game is launched, an unskippable five-minute long video on the dangers of gambling will be presented to the player.”

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Ittybumpkin

You should probably go look at who the 5 FTC commissioners are but since you will not, I will give you a break down. 3 are male, 2 are female. Of the males 2 are white. Looking at their photographs, they mostly look to be in the 40s to early 50s. Even if it was being done by “seventy-year-old white guys”, I am not sure how that specific demographic would be any worse than any other demographic of regulators for this specific problem.

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johnwillo

Thanks for informing me and not being at all condescending or insulting. Have a nice day.

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Cosmic Cleric

If we all survived those FBI logos at the front of movies/games that tell kids that winners don’t do drugs, we can handle whatever they add to game launchings.

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Bryan Correll

ESA spokesperson Louis Renault stated that he was “Shocked. Shocked to find that some believe gambling is going on in gaming.”

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johnwillo

“Your winnings, sir.”

Shocked.gif
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IronSalamander8 .

As others have pointed out I don’t expect much from this but its a good start for sure. Jim Sterling gets a lot of flak for bringing this up a lot, but it needs to be hammered on again and again. I despise microtransactions in general but they’re especially egregious in full priced, or even more excessive priced ‘special editions’, and gambling boxes are even worse than straight up purchases.

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A Dad Supreme

This isn’t the investigation I’m most interested in coming out of Washington right now.

I don’t think politicians can chew gum and walk at the same time, so I’d like them to focus on that ‘other thing’ since that’s far more important.

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rafael12104

Meh, the gears move slowly in Washington. The FTC was asked to look at this and they will. But that “other thing” may be done and dusted well before the FTC publishes any findings.

It is a long road I think before anything happens either way.

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Geoffrey Smith

Politicians chew gum and walk all the time. That’s how they DO get away with things.