FTC To Investigate Video Game ‘Loot Boxes’ As Potential Form Of Gambling

An attendee plays a video game on the PlayStation 4 video game console in the Sony Interactive Entertainment booth during the Tokyo Game Show
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Federal Trade Commission chairman Joe Simons announced Tuesday that the agency would be investigating the use of micro-transactions, commonly referred to as loot boxes, in video games. According to NBC, there has been growing concern around the use of these loot boxes, which some view as a form of gambling designed to be addictive that is marketed to children.

Loot boxes are anything in a video game that can be bought or earned through play that grants the player a randomized in-game item such as an outfit for a character, a weapon, or a character action such as a dance or voice clip. Critics have noted that the sounds and effects of the boxes when opened are designed to increase the behavior of gambling, much like the sounds and lights from slot machines.

Earlier this year, Senator Maggie Hassan of New Jersey sent a letter to the Entertainment and Software Ratings Board (ESRB) president to request that she re-evaluate how the board rates games with loot boxes, according to the popular gaming news platform Polygon.

“The prevalence of in-game micro-transactions, often referred to as ‘loot boxes,’ raises several concerns surrounding the use of psychological principles and enticing mechanics that closely mirror those often found in casinos and games of chance,” Hassan wrote in her letter.

A man plays Star Wars Battlefront II on opening day of the Electronic Entertainment Expo (E3) at the Los Angeles Convention Center
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Researchers looking into the issue have found signs of addictive behavior and problem gambling among gamers who spend money on loot boxes. One study published in the Public Library of Science which surveyed 7,000 gamers found that “the gambling-like features of loot boxes are specifically responsible for the observed relationship between problem gambling and spending on loot boxes.” They therefore concluded that “there may be good reason to regulate loot boxes in games.”

Both Belgium and the Netherlands have passed laws banning loot boxes in video games after finding them to be a form of gambling. However, loot boxes continue to be a $30 billion source of income for game companies that have developed popular titles such as Overwatch and Star Wars: Battlefront II.

Many of these companies deny that loot boxes are a form of gambling. After a statement by Belgium Minister of Justice Koen Greens saying that loot boxes are a “violation of the country’s gaming legislation,” an EA spokesperson told Kotaku that the company disagrees with this finding.

“We would welcome the dialogue with Minister Geens on these topics, as we do not agree that our games can be considered as any form of gambling,” said the unnamed spokesperson.