ibusinesslines.com December 09, 2018

FTC To Investigate Predatory Loot Box Practices Sweeping Gaming Industry

30 November 2018, 02:30 | Jodi Jackson

The FTC will be looking into lootboxes soon

PS4 Controller

When speaking to the U.S. Congress recently, the Federal Trade Commission's (FTC) chairman Joseph Simmons said that the group plans to investigate loot boxes and their potential harm when it comes specifically to children.

With her argument, Hassan stated, "Loot boxes are now endemic in the video game industry and are present in everything from casual smart phone games to the newest, high budget releases". She also stated that loot boxes are on track to generate $50 billion by the year 2020 and cited a report from the United Kingdom that stated 30% of children have utilized loot boxes before, which could later lead to gambling issues. She also noted that such microtransactions could "represent a $50 billion industry by the year 2022".

Even loot boxes that don't require an exchange of real-world money may still "meet the five established psychological criteria for gambling" and thus pose a risk to certain players.

Per Polygon, Junior New Hampshire Senator Maggie Hassan questioned commissioners at the FTC during a Senate Commerce, Science and Transportation subcommittee hearing about loot boxes, as well as other pressing topics.

Now, they're after loot boxes. It touches on the history of loot boxes and makes note of the importance of the game industry to Australia, and the importance of loot boxes to the game industry, which "faces economic challenges from piracy and arbitrage and as such, has had to develop a range of revenue streams beyond retail sales".

Simons' proposed investigation will tackle loot boxes at a federal level.

Ever since EA released the money-hungry Star Wars Battlefront 2 a year ago, the topic of loot boxes in gaming has skyrocketed. Belgium, the Netherlands, Japan, and other countries have all moved to regulate the use of loot boxes in video games given this close link to gambling. Critics of loot boxes fear that it's a predatory practice that essentially exposes children to the idea of gambling. "They can enhance the experience. but have no impact on those who do not".

An Australian Parliamentary committee has issued a report calling on the government to undertake "a comprehensive review of loot boxes in videogames". It all started toward the end of 2017, when EA's heavy-handed loot boxes in Star Wars Battlefront 2 caused a ton of controversy and eventually forced EA to backtrack.

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