A bill introduced by six members of the New York State Assembly would require video game manufacturers to label games with randomized in-game purchases, restrict the sale of such games to persons under 18, and disclose the odds of the randomized prizes.
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The summary of the bill reads:
“Requires chances of randomized in-game purchases in video games to be disclosed; requires labeling of video games with randomized in-game purchases; restricts purchasing of video games with randomized in-game purchases to those eighteen years old or older.”
The six sponsors of the bill, A 10075, are:
- Primary sponsor: Asm. Jeffrey Dinowitz [D]
- Sandra Galef [D]
- Ellen Jaffee [D]
- Rebecca Seawright [D]
- Inez Dickens [D]
- Vivian Cook [D]
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What are loot boxes
Loot boxes landed on the government radar thanks to their prominence in the game Star Wars Battlefront II. They aren’t a new phenomenon though. Virtually every mobile app from Candy Crush to Angry Birds utilizes microtransactions to monetize their product.
Simply put, loot boxes are a shortcut in the game. Unlike the tit-for-tat purchase of more lives in Candy Crush, loot boxes are awards that contain random rewards.
Loot boxes are voluntary transactions, but game developers can make it so continued progress in some games almost necessitates their purchase.
Are loot boxes gambling?
In most cases, loot boxes fall short of a “gambling” designation, meeting only two of the three requirements:
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- Consideration: risking something of value
- Chance: an element of uncertainty in the outcome
- Prize: the awarding of something of value
Unless the contents of loot boxes can be sold or traded for money or something of value, they don’t meet the “Prize” criteria.
However, even if loot boxes aren’t technically gambling, calls for stiffer regulation are growing stronger, and not just in New York.
New York is not alone
Amid this growing concern, EA, the maker of Star Wars Battlefront II, pulled loot boxes from the game. However, the company is now considering reinstating them.
That’s a decision it might want to reconsider.
In addition to New York, loot boxes have come under fire in Hawaii, Congress, and in jurisdictions around the globe.
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During a Senate Commerce, Science, and Transportation Committee hearing in February, New Hampshire Senator Maggie Hassan asked FTC nominees if they would independently review the use of loot boxes in video games.
That line of questioning came on the heels of Hassan writing to the Entertainment Software Ratings Board (ESRB) about the matter:
“I respectfully urge the ESRB to review the completeness of the board’s ratings process and policies as they relate to loot boxes and to take into account the potential harm these types of micro-transactions may have on children. I also urge the board to examine whether the design and marketing approach to loot boxes in games geared toward children is being conducted in an ethical and transparent way that adequately protects the developing minds of young children from predatory practices.”