As controversy continues regarding loot boxes in Video Games, Valve has taken the initiative to improve the process for their games. Dutch and Belgium have threatened to prosecute gaming companies regarding loot boxes in games. Their ruling stated
“Loot boxes contravene the law if the in-game goods from the loot boxes are transferable. Loot boxes do not contravene the law if the in-game goods from the loot boxes aWhre not transferable.”
Dutch declared four games were guilty and two games are from Valve. The government declared loot boxes had monetary value content but didn’t properly showcase what you earned as it is based on chance. Earlier in June, Valve disabled opening loot boxes and trading gear in the Netherlands, Belgium and Deutschland in CS:GO (Counter-Strike: Global Operative) and DOTA 2 (Defense of the Ancients 2).
Now Valve has taken another step for those regions. For DOTA 2, Dutch players can see what the loot box will contain before purchasing it. The game now restricts players by only allowing one box purchase at a time and removing the box opening animation.
Why these specific changes?
The removal of multiple purchases to prevent players from potentially mass purchasing boxes. Previously, multiple box purchases gave you small discounts or extra bonuses for more boxes. Regarding the animation, many loot boxes had fancy animations that were designed to make players feel good about opening them. Psychologist defines the feeling as ‘variable rate reinforcement.’ The adrenaline rush and the dopamines in your brain affect you more if you are unaware of the rewards but they are delivered on a periodic basis. Each game has their own animation and developers put extreme effort to make it look, sound, and feel amazing.
Do you want to see these changes in North America? Or do you think these changes aren’t the right steps to change loot boxes?
This year, governments and countries around the world have been evaluating loot boxes in video games. Discouraged by Gamers, it has become an infamous growth in revenue for video games. Many mobile games and online video games have added loot boxes as a system. Some governments are considering loot boxes as a form of gambling because users rely on chance to earn good in-game items. Recently, the Belgian Gaming Commision has declared randomized loot boxes as a “game of chance” in 3 games: Overwatch, CS: GO, and FIFA.
The Belgian Gaming Commission stated the “games don’t disclose the odds of receiving specific in-game items.” The three games must remove their loot boxes or be in criminal violation of the country’s gaming legislation. The fine is €800,000 and five years in prison for the operators. Clarification on who would face the consequences in the company remains to be determined. If the loot boxes affect minors, the punishment is doubled.
What happens next?
Minister of Justice Koen Geens wants to work with the gaming companies, developers, operators and the Belgian Gaming Commission to determine who should be punished for loot boxes. Belgium is one of the first countries that took a stance against loot boxes in games during the Star Wars: Battlefront 2 controversy. Hawaii, Washington D.C. and several countries are trying to create laws to limit the purchase of loot boxes in games.
Earlier this week, I reported on Hawaii’s representative introduced two bills to regulate distribution of video games with loot boxes. The bills would require games to have a label identifying that it contains loot boxes and would only allow sales of those games to 21+. Today, U.S. Senator Maggie Hassan (D-NH), question the Federal Tech Commission (FTC) about loot boxes and wrote a letter to the head of the ESRB, Patricia Vance, requesting them to a better inspection on loot boxes and the potential effects on players; mainly children.
Before, the ESRB refused to classify loot boxes as gambling as it would force an adult rating on video games based on a interview from Kotaku.
“ESRB does not consider loot boxes to be gambling,” said an ESRB spokesperson. “While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want). We think of it as a similar principle to collectible card games: Sometimes you’ll open a pack and get a brand new holographic card you’ve had your eye on for a while. But other times you’ll end up with a pack of cards you already have.”
Hassan was not satisfied with the response from the ESRB and suggested a re-evaluation as opening loot boxes are “expensive habits and use similar psychological principles suggest loot boxes should be treated with extra scrutiny.” While her proposal isn’t as strict as Hawaii’s proposal, her position as a U.S. senator is more prevalent nation-wide. It could end up leading to her proposing federal legislation about this issue, rather than individual states doing it.
The government and most gamers are actually on the same side in regards to the opinion that loot boxes should be regulated more in games but the effect on the industry could be intense. Micro-transaction make a majority of games profits after initial sales. While the goal of all game sales are to make a profit from initial sales, the reason for the huge growth in the industry and making it a worth $30 billion are from practices such as this.
If there is one good thing to come from Star Wars Battlefront 2, it is that people around the world being more aware of loot boxes. In regards to a past article, EA (Electronic Arts) faces heavy scrutiny from gamers and government officials regarding the loot box system in Star Wars. Buying loot boxes gave unfair advantages to players in competitive multiplayer and were the best option to unlocking all of the content in the game. Hawaii was very critical against EA and video game companies pushing loot boxes in their games as they viewed it as a form of gambling towards children. Now Hawaii lawmakers are trying to push new bills to regulate loot box purchases.
One pair of bills, House Bill 2686 and Senate Bill 3024, would prohibit people under the age of 21 purchasing any games with randomized rewards using real money. House Bill 2727 and Senate Bill 3025, would require video game companies to label games with randomized purchases and the probability of loot box rewards. State Rep. Chris Lee of Oahu, who spearheaded the bills, stated “I’ve watched firsthand the evolution of the industry from one that seeks to create new things to one that’s begun to exploit people, especially children, to maximize profit.”
While games like Overwatch make earning loot boxes plausible and only offer cosmetics, some are providing advantages in game which encourages people to buy in order to win. Lee stated because the games are only rated T, the games promote gambling at a young age on virtual goods. Despite the backlash, Star Wars Battlefront 2 sold well but not as good as EA had hoped. EA was hoping to make more based on micro-transaction but based on the backlash, had to remove them.
Micro-transaction and in-app purchases are common among video games, including games for younger audience such as Minecraft and smart phone games. GDC (Games Developer Conferences) stated that 1/10 upcoming games would have loot boxes in some manner. One anonymous GameStop employee is wary that the law could lower the cost of sales based on the labels.
Micro-transactions are a huge profit for video game companies. Activision Blizzard made over $4 billion on loot boxes alone in 2017. Often, companies use micro-transactions to earn higher profit margins rather than relying on sales alone. Gamers throughout the world have complained about the system and “games as a service” that has become more prevalent. Whether the law passes will force the industry to change a huge part of sales and potentially shake up the practices.