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FTC to Hold Public Workshop on Loot Boxes

Governments worry that loot boxes found in video games are a form of addictive gambling.

The Federal Trade Commission (FTC) will be including the public in its discussion on loot boxes and how they affect the consumer. While these boxes are a fun expansion of video games, people around the globe are worried about the effects on consumers. After discussing taking action in November 2018, the Commission will finally be following through with a public workshop on August 7.

What Are Loot Boxes?

Loot boxes are virtual containers in video games that award players with items and other enhancements that will help to advance the player in the game. They are purchased either through virtual currency earned within a game, or with real-world money out of pocket. They are mainly used in games to help pay for the costs of development.

Many games are free to play or are completely paid for with the initial purchase. Due to these changes, the cost of development outweighs the purchase price. With these boxes, developers can get closer to breaking even rather than lose money on the game they created. A report from the UK Gambling Commission reported that 31% of kids ages 11 to 16 have opened loot boxes.

The Dangers of Taking a Chance

The problem with this enhancement to video games is that purchasing loot boxes is viewed as a form of gambling. The rewards that the boxes contain are completely randomized, so the user is not sure what kind of enhancement they will receive.

Statistics from statista.com show that video game players under the age of 18 accounts for 28% of gamers, while 29% of gamers are ages 18 to 35. This could pose a serious risk if the boxes are in fact found to be a form of gambling. Addiciton.com states that as many as 750,000 people ages 14 to 21 have a gambling addiction.

In addition to the statistics, some players believe that the boxes provide and unfair advantage to gameplay. Without the proper amount of virtual or real-world currency, the average player has no chance against a player with an added tool or weapon.

Taking Action

Some countries have already taken a stand against the game feature. Belgium has already declared loot boxes in certain video games as illegal under their gambling laws. Netherlands has followed suit by also taking action against publishers such as Electronic Arts and Activision Blizzard, forcing them to modify or remove the boxes within the game.

The FTC’s public workshop will be examining issues related to these boxes and will involve the expertise of industry representatives, consumer advocates, trade associations, academics, and government officials. The FTC’s website names three main topics that will be covered in the workshop:

  • In-game landscape including the origins and evolution of loot boxes and their role in games and the digital marketplace
  • Research that examines consumer behavior in children and adolescents in the context of the games and transactions
  • A discussion of consumer awareness and education about in-game digital transactions like the mechanics, marketing, and financial commitments related to the boxes

Calling for Rules

The workshop will be held in Washington, D.C. and while it is open to the public, will also be webcast live on the FTC website. Public input is welcome as the Commission is accepting discussion topics and potential participants through [email protected] until June 7. Written comments on the issues discussed at the workshop can also be submitted online until October 11.

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