Sen. Josh Hawley, R-Missouri, wants to ban video games from selling loot boxes to kids. If you know what that means, you might be a gamer or the parent of a gamer. Maybe you discovered loot boxes playing “Fortnite” — or on your credit card statement.
In video games, loot boxes are randomized assortments of digital goodies, including weapons, costumes, and power-ups, that players earn or purchase. Gamers often open these boxes blindly, not knowing in advance what lies inside.
Video game studios have come to rely on these kinds of in-game “microtransactions” as a way to boost revenue from games that are increasingly expensive to make. One estimate says loot boxes and “skins gambling” will have pulled in $50 billion by 2022.
Critics, including Hawley, say these revenue streams encourage addictive behavior in minors. Their argument is not without merit, and other countries regulate loot boxes, likening them to gambling. Since 2017, for instance, China has required games to display the odds of winning good items.
Ultimately, though, no country has banned loot boxes outright. Hawley’s bill stops shy of total prohibition, as well, but only just. To balance protection of vulnerable gamers with ensuring access to good games, Hawley’s bill needs more polish.
In video games, loot boxes are relatively new, but the general concept is at least as old as Topps baseball trading cards. Today, LOL Surprise Dolls, Pokémon Cards, and any number of other products attract children by proffering a reward, quality not guaranteed. One particular “blind box” consumer product loomed large over my own adolescence.
The year was 1994. I was 14 and obsessed with Flair’s Marvel Comic Cards. In my quest for one particular card — fittingly titled “Venom: The Madness” — I spent nearly $100 tearing open package after package, always on the lookout for the six-armed human-alien symbiote.
Twenty-five years later, all I can do is roll my eyes at teenage me. Flair got me good. At the time, $100 seemed like a small a fortune. Did Flair exploit me? Maybe. But then so, apparently, do sellers of all blind box products.
Essentially, producers of collectable cards, Wonder Balls, and breakfast cereals containing limited edition Star Wars spoons all tread the same territory: Consumers give them money in exchange for randomized rewards of varying odds.
Among gamers, loot boxes haven’t been the most popular industry evolution. No one wants to spend $60 on the latest blockbuster game only to be further nickel-and-dimed for the random chance of getting a handy in-game item. Through loot boxes and their ilk, video game companies have even employed so-called “pay-to-win” schemes, which effectively allow players to pay money in exchange for certain in-game advantages.
“Pay-to-win,” though irritating, is not so different in concept from revenue models employed by some competitive card games, namely “Magic: The Gathering.” Succeeding in “Magic” and other games like it requires a more or less ongoing investment in randomized card packs.
Where loot boxes may cross the line is in the degree to which they emulate certain tropes of gambling. Here, Hawley’s criticisms are well-taken.
When players open loot boxes, their screens explode with sound and light. The better the reward, the bigger the explosion, the stronger the physiological reinforcement associating feeling good with giving money to a video game. Playstations don’t vomit nickels, but loot boxes and slot machines are pretty similar, otherwise.
All this said, characterizing all microtransactions as the kid-exploiting inventions of mustache-stroking techno-barons oversimplifies things by a long way. Rather, they are attempts at keeping up with an evolving industry.
Making video games has become significantly more complicated and expensive than it once was. Back in the good old days of 16-bit Mario and Sonic, games were generally self-contained. The cartridge or disk purchased in the store was the finished product.
Today, developers continue tweaking games long after consumers bring them home through things like downloadable content and online play. Loot boxes and other microtransactions are the video game industry’s latest attempt at keeping this enterprise profitable.
The economics here are pretty simple: If video games don’t make money, we get fewer or lower quality video games. Reform of loot boxes may be needed, but it requires nuance to protect this delicate balance — more nuance, unfortunately, than what comprises the current edition of Hawley’s bill.
As written, the Protecting Children From Abusive Games Act would do more than ban loot boxes from video games played by a significant number of minors. It would also kill popular perks (as seen in “World of Warcraft,” for instance) that allow players to blitz through or even skip older game content.
Given Hawley’s apparent disposition toward gaming in general, one would think he might support mechanisms allowing users to put less needless time into a game, rather than banish them back to the dark days of Vanilla WOW.
His bill would also effectively make government the ultimate arbiter of video game content ratings. For years, game companies have voluntarily funded their industry’s own version of the MPAA. The Entertainment Software Rating Board, or ESRB, seems to work reasonably well, empowering parents to police their children’s games.
Under Hawley’s bill, however, the government would usurp content-moderating duties from both the ESRB and parents. The bill offers some broad definitions of what constitutes a “minor-oriented product,” but a literal interpretation of the text may subject any game a minor might find appealing through content, advertising, or research to the loot box ban.
Critics of gaming might applaud Hawley’s scorched-earth tactics, but they certainly won’t benefit people who enjoy playing “PUBG,” “Fortnite,” or “Apex Legends.” Hawley’s interest in this topic is welcome, but the situation is not so dire that, in the name of consumer protection, loot boxes should be immediately nuked from orbit without regard for the collateral damage — lower quality or quantity of gaming options for consumers.
The Federal Trade Commission will hold a workshop on microtransactions later this year. Hopefully, Hawley attends. It would be an opportunity for him to hear firsthand from the developers, gamers, and consumer advocates interested in finding a balanced solution: one that protects kids while still ensuring they have high-quality games to play.
If robust conversation and hard-nosed research prove the need for new legislation, I’ll be just as enthusiastic for version 2.0 of Hawley’s bill as I was for that Venom comic book card.
Beau Brunson is a senior policy analyst at Consumers’ Research.
