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Head of International Game Developers Association Calls for Unified Approach to Loot Boxes

The head of the International Game Developers Association is calling for the game industry to create a unified approach to its use of loot boxes in the wake of the Federal Trade Commission’s decision to investigate the use of the randomized boxes in video games.

Jen MacLean, executive director of the IGDA, urged the industry to commit to not marketing loot boxes to children, disclose the odds of different awards for loot boxes and launch a coordinated education program, in an open letter posted on the IGDA website.

“Earlier this week, the United States Federal Trade Commission agreed to investigate loot box monetization and its potential impact on children,” she noted. “This announcement, which follows Belgium’s investigation and restrictions in the Netherlands on the use of loot boxes, should be a clear wakeup call to the game development industry that we must address how we use loot boxes, especially when they’re in games played by children.

“Random loot drops are a well-established game mechanic, and a way to vary rewards and keep players interested and engaged. But when a player makes a real-money purchase of an unknown item-a loot box-we run the risk of triggering gambling laws. Those regulations are not always clear, and many people have noted that loot boxes are simply digital versions of collectible card games, but we cannot ignore the fact that video games face increased scrutiny, concern, and regulation because of their immersive nature.

“We have a blueprint for taking action as a community, and industry, in how we established clear, easy-to-understand game ratings and content descriptions so that consumers, and especially parents, understand what’s in the games they or their children play.”

The call to action comes days after Senator Maggie Hassan (D-NH) called on FTC chairman Joseph Simons to investigate video game loot boxes to ensure that children are being protected and parents are educated on the matter.

That request landed about nine months after Hassan sent a letter to the Entertainment Software Ratings Board asking for the group to review the ratings process as it relates to loot boxes, examine the marketing of loot boxes to children, and put together best practices for developers around the toxic form of microtransactions. The senator also asked the board to conduct a study that further delves into the reach and impact of loot boxes in games. At the time, she said if they didn’t take sufficient action she would ask the FTC to get involved.

In response, the ESRB added a new online-only rating descriptor that noted when a game had in-game purchases. The descriptor did not distinguish between loot boxes — a system of purchasing digital boxes containing randomized items which some government agencies believe are either a form of gambling or could lead to an increase in gambling in youth — and other less controversial forms of microtransactions, like being able to buy specific hats or clothes for a character. The board also launched an effort to educate parents.

“ESRB president, Patricia Vance, communicated with Senator Hassan about addressing in-game purchases in February 2018, while ESRB was in the process of adding a new interactive element – In-Game Purchases – to inform parents of when games offer the ability to purchase digital goods and premiums with real world currency, which officially launched in April 2018,” according to a statement sent to Variety from an ESRB spokesperson. “ESRB also launched ParentalTools.org to help inform parents of additional tools, such as parental controls, to help them manage how much money (if any) can be spent on in-game purchases. We have not communicated with Senator Hassan on the matter since February.”

Hassan told Variety that while she will work with the ESRB on the issue, the FTC should also look into the issue.

“While I have appreciated working with the ESRB on this issue, I have also said that the Federal Trade Commission has a responsibility to look at this issue,” she said. “The need for FTC action becomes more apparent given the recent report from the Gambling Commission of Great Britain and the steps other countries have taken to regulate loot boxes. I hope the FTC will move quickly to begin their investigation and look forward to working with all parties on this issue.”

The ESA, for its part, defended the use of loot boxes in games.

“Loot boxes are one way that players can enhance the experience that video games offer,” the association said to Variety. “Contrary to assertions, loot boxes are not gambling. They have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase. They can enhance the experience for those who choose to use them, but have no impact on those who do not.”

But MacLean noted that action needs to be taken to thwart federal intervention.

“By not taking significant action as an industry and global game developer community to self-regulate how loot boxes are used, we run the very real risk that governments around the world will take that action for us, and perhaps create significantly restrictive laws that could impact any random reward elements in games,” she wrote. “I offer my strongest advice to game developers and interactive entertainment businesses on this matter: addressing how loot boxes are used is both the right thing, and the smart thing, for the global game development industry to do.”

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