Governments Move to Regulate the In-Game Video Experience

Loot boxes are in-game purchases, made possible with in-game currencies players can buy with real-world money, which provide the gamer items like a new outfit or power-up. These “microtransactions,” as they’re called, are supposed to help the player complete the game quicker. Items awarded by loot boxes are often randomly generated, which has led critics to call them a form of virtual gambling akin to a slot machine.

Agitation over loot boxes had been percolating among gamers for years, who feel the industry has been nickeling and diming them. Already upset by the market for downloadable content (DLC)—which, for a price, gives players a new set of features not immediately available with purchase and often are necessary to get the complete game—gamers worldwide have become increasingly concerned with an industry-wide trend to turn popular online multiplayer experiences into what’s known as “Games as Service.”

Through the purchasing of loot boxes and other microtransactions, developers using a “Games as Service” model can obtain the cash flow needed to keep adding new features and updates to games released and purchased years ago. (Think of a vicious cycle.) If the company is successful at maintaining player interest, it could achieve years of having millions of gamers worldwide paying billions to keep playing the same game.

We’ve come a long way from buying a copy of Super Mario Brothers on your Nintendo Entertainment System, finishing it, and then watching the cartridge collect dust as you play another game. Today, companies like Blizzard Activision, the creators of titles like World of Warcraft, Overwatch, and the Call of Duty series, report making $4 billion in 2017 alone off players purchasing various kinds of microtransactions in worlds that have existed for years.

What prompted Lee, the Hawaiian state rep, to jump into the anti-loot box crusade was the release of Electronic Arts’ Star Wars Battlefront 2, a highly anticipated, massive, multiplayer online game set in “a galaxy far, far away.” While Battlefront 2 is essentially a game where players could achieve success without the purchase of loot boxes, it was determined that many of the game’s mechanics, such as player skill progression and the ability to play as iconic characters like Luke Skywalker and Darth Vader, made purchasing loot boxes a necessity to enjoy the experience fully.

Critics called Star Wars Battlefront 2 “pay to win.” Lee called it “a Star Wars-themed casino” and “a trap” to children and parents unaware of how much the game could really end up costing them. With countries like Belgium, Australia, the United Kingdom, and others either investigating or determining that games with loot boxes qualified as gambling in need of regulation, it was only a matter of time before efforts at such restrictions came to the United States.

Lee’s bills primarily target games with loot box mechanics in them, but would also have greater repercussions for the entire video game industry. As the Hawaii Tribune-Herald reports:

The bills requiring labeling and disclosure of probability rates are taken straight from recent changes Apple enforced on its App Store. Don’t expect to see much industry pushback there.

The same cannot be said for the other legislation. Expect to see immense industry lobbying against any law prohibiting retailers from selling games with loot box mechanics to anyone under the age of 21, regardless of content. If state Rep. Lee is to be believed, Hawaii is just the start, and similar measures are certain to pop up in half of the nation’s state legislatures soon. Already, similar bills have been proposed in Washington state and Indiana.

That’s because legislators like Lee know that even with games now being sold and downloaded directly via the Internet, the gaming industry still relies on big box retailers for the bulk of its sales. Meaning that if places such as Walmart, Best Buy, and others decide the hassle of dealing with government regulation by carrying a game now deemed “Adults Only” is too much, they won’t bother. As a result, sales will suffer.

Whether the efforts by legislators like Hawaii’s Lee are successful remains to be seen. The legislative process is too in its infancy to guess on an outcome, but how we got here should have been foreseen.

Instead, the video game industry focused more on their corporate bottom line when they should have been focused on the frustrations gamers were feeling as they found microtransactions everywhere they turned. Now, as regulation begins to bear down on them, video game publishers only have themselves to blame.

Too bad the time to hit the “reset button” has long since passed.