Video Game Industry to disclose loot box drop rates

The video game industry group, Entertainment Software Association, announced the new initiative on Wednesday after a loot box meeting with the Federal Trade Commission. The initiative includes the publishers Microsoft, Sony, and Nintendo to require all publishers of games on their respective platforms to disclose the odds of obtaining all types of in-game items from purchased loot boxes in their future game titles.

These include the following companies: Activision Blizzard, Bandai Namco, Bethesda, Bungie, EA, Take-Two Interactive, Ubisoft, Warner Bros., and Wizards of the Coast. According to the ESA, there are other publishers which also are considering joining the agreement. If they do not, they will not be able to publish their games on the Xbox, PlayStation, and Nintendo Switch platforms. Other platforms such as the PC are not included.

Exactly when the agreement will come to full effect in the future titles is not yet something that has been disclosed, but the current plan seems to be to roll the changes out during 2020.

This initiative tells us that publishers have acknowledged that their business model is under scrutiny, and that they want to be able to come better equipped with arguments for future hearings by trade commissions and politicians. However, it is not an argument than can be used when it comes to offering loot boxes to minors, since they are less likely to understand how probability theory works.

FTC investigates loot boxes

The Federal Trade Commision in the USA, also known as the FTC,  have decided to investigate the Game Industry  practices regarding the sales of loot boxes in video games. This is very welcome news for gamers, but especially for parents around the world, as many children are exposed to these random content crates every day in their life, crates which essentially are designed around the mechanism of gambling.

It was Senator Maggie Hassan (D-NH), who brought up the topic of loot boxes in the Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security.

Loot boxes are now endemic in the video game industry and are present in everything from casual smartphone games to the newest, high-budget video game releases. Loot boxes will represent a $50 billion industry by the year 2022, according to the latest research estimates. Children may be particularly susceptible to engaging with these in-game purchases, which are often considered integral components of video games. Just this month Great Britain’s gambling commission released a report finding that 30% of children have used loot boxes in video games. The report further found that this exposure may correlate with a rise of young problem gamblers in the United Kingdom. Belgium, Netherlands, and Japan have moved to regulate the use of loot boxes in video games given this close link to gambling.

It is very shocking news to hear that 30% of children in the UK have purchased loot boxes in video games, and it’s even more concerning that this exposure may correlate with a rise of young problem gamblers in the same region. Let that sink in, it’s a very infuriating thought, when we know that big conglomerates, like Electronic Arts, Activision Blizzard and Ubisoft are preying on children in this manner, children who are much more susceptible to the mirage of a loot box. As adults we have the responsibility to stand against these practices which may have an ever lasting effect on children growing up today, by accepting loot boxes as something perfectly normal. Hassan continues:

Given the seriousness of this issue, I think it is in fact time for the FTC to investigate these mechanisms to ensure that children are being adequately protected and to educate parents about potential addiction or other negative impacts of these games. Would you commit to undertaking this project and keeping this committee informed about it?

The chairman Joseph Simons replied with a “Yes.”. The instant response from the Entertainment Software Association was:

Loot boxes are one way that players can enhance the experience that video games offer,” the association said to Variety. “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.

That is a lot of enhancing for something which has no real world value. What a great business idea to sell digital items which don’t have any real world value, the wording brings the mind to a…scam. How about giving out these enhancements as rewards for what the player achieves in the game? Since they do not have any real world value, why would it be a problem?

While the investigation doesn’t really mean anything so far, it’s a first and very important step in the right direction. We will report further on this topic as it develops.