Loot boxes, coupled with child protection and consumer protection, are a powerful 2020 trend that will continue into the next. Most of the news in the gaming industry was related to the reports-statements of regulators (or related organizations), and class actions. An example of a high-profile lawsuit is the lawsuit of Kevin Ramirez, representing, among other things, a hundred similar disgruntled players seeking damages in the amount of $ 5 million from Electronic Arts for loot boxes used in Ultimate Team. The accusations boil down to the fact that Ramirez himself has spent over $ 600 on Ultimate Team merchandise since 2011 (1).
His interests are represented, by the way, by a law firm that previously accompanied a similar lawsuit against Apple.
In France, in the spring, a lawsuit was initiated against Electronic Arts in connection with the fact that the client spent 600 euros in 5 months, but nothing of value fell out to him, and this, according to the lawyer, indicates that the game mode makes players pay to win. without guarantees of an equal prize. The developers of such a game mode, they say, specially created the illusion of the possibility of obtaining value and an addictive monetization system for the player. Following the example of the first plaintiff, another 15 players filed claims in France (2).
In Europe, they again started talking about the need to review the regulation of games in the consumer sphere. On the one hand, various commissions come to conclusions about the sufficiency of the existing legislation, and on the other hand, they voice proposals for the regulatory consolidation of the need for mandatory disclosure of information on the principles of loot boxes operation, which will likely be reflected in acts over the next year (3).
PEGI and ESRB have expressed a common industry position aimed at self-regulation. In the spring, new types of notifications (badges) were introduced indicating paid in-game items with random content (Includes paid random items).
The ESRB provides for in-game purchases (including random items) badge to all games that include purchases with any randomized items, including loot chests, gacha games, item or card decks, prize roulettes, treasure chests and more other (4).
The European Committee for the Internal Market and Consumer Protection (IMCO, International Market and Consumer Protection) will also inform about the need to inform about the presence of loot boxes in games before downloading / buying them and the likelihood of obtaining certain items from the loot boxes at the time of access (5).
The following are excerpts from the main reports / studies that were published over the spring / summer. The prerequisites for such increased activity in this area in 2020 can be attributed to
- the publication in January in the UK of the Age Appropriate Design Code (Age Appropriate Design Code), developed by the ICO, and coming into force in 2021 (6).
- publication in Australia in February of the government report Protecting the Age of innocence (7).
- published in June of the Explanatory memorandum to the Age Appropriate Design Code 2020 (8).
In June, the UK published a government response to a year ago Government Response to the Digital, Culture, Media and Sport Select Committee Report on Immersive and Addictive Technologies ( nine).
In its response, the government analyzed all the proposals and hypotheses, without introducing anything new in essence, without expressing any radical position. Throughout the text, there is hope for regulation through mechanisms that publishers and platforms need to improve, such as parental controls. This is a reiteration of TIGA's previously published Five Principles for Safeguarding Players, which outlined the principles of respect for personal data and "time and waste management." At that time, there was a feeling that a new wave of interest in the topic was not expected (10).
In early July in the UK, another institution (the House of Lords Ad Hoc Committee on the Social and Economic Impact of the Gambling Industry) is calling on the government to take action to bring loot boxes into the scope of gambling laws and regulations (Chapter 6 on Children and Youth contains the heading 'Loot boxes and gambling "). In this chapter, a lot is devoted to the history of the development of the issue in Belgium and the Netherlands, the authors complain that previous studies did not find arguments (persuasive case) to connect loot boxes with gambling. The negative impact argument is based on a study by Professor Sendle (professor of computer science at York University), who saw a link between spending on loot boxes and addiction to gambling, which is stronger in adolescents.than adults have a link between loot box spending and the problem. Sendle believes that self-regulation of the industry is the optimal solution (11).
The availability of purchase history and spending limits are cited as proposals for regulation. With the first and second, companies can consider themselves to be taking care of the children (12).
The “childish question” is still not primary in the topic of loot boxes. The main charge is the comparison with gambling. It doesn't matter what jurisdiction we are talking about, gambling is everywhere defined through a set of elements: chance, payment, prize (or loss). The network periodically flashed stories of people (both adults and adolescents) that they supposedly did not notice how they spent more than 10 thousand dollars a year, which they say affected both finances and family life. Such stories, among other things, highlighted the topic of loot boxes.
"Invalue" and lack of value - these are the very controversial estimates of the dropped items. Players are unhappy with boxes, because they expect something worthwhile, but receive a set of nonsense, and in this regard they are forced to buy more, ostensibly in order to get a valuable game item that they need in their position. If something that does not have a rating (the item is not in the store) gets into the loot box, it becomes more difficult for the player to blame the developer for some kind of injustice. As for the expectations - if the player, in principle, sees the entire set of items in the box, as well as the percentage of drops - then in general the accusation of “blind purchase” loses its composition. Indicating the chances of dropping out, the cost benefit of the buyer to purchase exactly the box as a whole, "visibility" or "transmission of the content with Rengen rays" are the best practices.
Again, the developer is either mixing a loot box with cosmetic items, or combining "influential" items with cosmetic items.
Buying a loot box is like throwing coins into a slot machine. Causes addiction: a person in excitement spends a lot, and then, having come to his senses, goes to ask "to return everything as it was." It would seem, and what is the problem? But the fact that there are two components: real money and a direct connection "money-object"; and secondly, it is difficult to stop and the player starts buying further, hoping to increase the chances of getting what he wants, and in a rush he will not notice how he will spend a lot of money. How to solve this problem: a) break the ligament, or rather make it longer, when the acquisition of a loot box is carried out, for example, with in-game currency (which, by the way, is now considered an insufficiently distant action). It is necessary to make a kind of hybrid from the real investments of the player's forces and expenses - the developers follow this path (when participating in some activity, finding this or that item inside the game, for example, a chest,but the key to it must be purchased).
What is the developer's goal - to warm up the player's interest, that is, the goal is not that he thoughtlessly bought loot boxes, was disappointed and left, but that he was admired and surprised by the "new twist".
Some developers are completely ahead of the market and provide transparency creatively: a year ago, the Rocket League announced blueprints instead of boxes (the purpose of which is to allow the player to understand what part and at what price for a car to buy), but the players did not appreciate the move, considering the new monetization system even worse.
The topic “children and games” and “children and the formation of gambling addiction” are a continuation of the trends of the past. If you look back in 2019, when the British Parliament's House of Commons Committee on Digital Technology, Culture, Media and Sports ended its investigation on September 12, 2019 with a report, then it must be admitted that the findings of that report have consequences today (and will definitely become “a task to solve "In the next couple of years), because there is a lot about the regulation of" teenage gambling addiction ".
The online harm regulator will have to pay particular attention to the industry's own efforts to control the consequences;
Gaming companies will have to take measures to establish the age of the player themselves (without shifting responsibility to the platform-distributors);
It is recommended not to sell loot boxes to children, so that children can get everything they need by playing achievements.
However, this is not all, because the summer was “hot”: while some documents indicated that the industry could resolve the problems, others called for extending the legislation on gambling to operations with loot boxes. This radical proposal came from the UK Children's Commissioner, who made recommendations to limit the role of money in video games aimed at children; for example, by introducing maximum daily spending limits and introducing functions to track the history of spending your historical spending. Its recommendations are also reflected in a document called Gambling Harm - Time for Action and aimed at strong regulation: “The government should take immediate action to amend the definition of gambling in section 6 of the 2005 Gambling Act.regulating the use of loot boxes as gambling. The government should also conduct a broader review of the current definition of gambling in the Gambling Law to ensure that it accurately reflects new forms of gambling, including those found on the Internet (paragraph 437) (13).
In early August in Australia, the CQUniversity Australia's Experimental Gambling Research Laboratory (EGRL) produced a report entitled "Lootboxes: Do They Prepare Young People for Gambling?" (Loot Boxes: Are they grooming youth for gambling?) Found a pattern that players who buy loot boxes are more likely to gamble in real life, as well as make larger bets and more often than those who refuse (with the focus group being players 12-24) (14).
The report cites adolescents' spending data as follows: the average purchase per month was $ 50 for teens (ages 12-17) and $ 72 for teens (ages 18-24). It would seem, what is this data for? And to grope after what amount of spending can be considered inadequate. In Europe, around the same time, there was a study on the impact on consumers: “Loot boxes in online games and their impact on consumers, especially young consumers”, published by the Committee on the Internal Market and Consumer Protection (IMCO) (15).
And in the European report a "child's question" surfaced. On page 33, it is said that if a minor entered into a transaction and exceeded the size of a "household transaction" (in fact, the average amount of spending, which is not yet clear by whom will be determined), then such a transaction can be terminated, because for that part that in excess, there was no parent or guardian consent. Risky offers, because the publisher finds itself in legal uncertainty: at some point will the money for loot boxes need to be returned? There is a feeling that all these proposals have only one purpose - to motivate publishers and platforms themselves to "set limits", and then prove that they acted in good faith, and the average maximum is determined on the basis of big data.
The European study assessed the following aspects: access and cost associated with gameplay and player achievement; transparency in the probabilities of receiving items; type of content (whether the prizes are “just cosmetic” or affect / improve the gameplay)
To date, only Belgium, the Netherlands and Slovakia have gambling regulations on loot boxes. At the same time, consumer rights are the EU regulation area, which means that here it is worth waiting for fixed uniform standards. Research into the impact on children's behavior is a special area of interest.
Conclusions reached by the authors of the European report (IMCO):
1.It is recommended that national gambling authorities intensify their cooperation so that video game publishers take action against illegal marketplaces that violate their terms.
2. It is recommended to approach the issue of loot boxes and other problematic game projects from a broader consumer protection perspective. The European Union has broad competencies in the field of consumer rights.
3. Parental controls will be effective if activated by default and if parents are aware of their existence and use them correctly
4. The settings should be accessible and intuitive and provide consumers with a range of options regarding payment history, spending limits, alerts, transcripts, or refund policies to protect all types of consumers and give parents the ability to protect their children
In the US in August 2020 Federal Trade Commission employees released a document detailing the key findings of an Inside Game workshop in August 2019 that addressed consumer protection issues related to video game loot boxes.
It summarizes the discussion of loot boxes, including how players can use them, for example, to change a character's appearance or to “pay for progress” in the game. These types of in-game microtransactions have become a multi-billion dollar market, accounting for a significant percentage of video game revenue, especially for free video games downloaded via mobile apps. The main message of the document:
- concern about loot boxes, new academic research and industry self-regulation initiatives, methods of advertising and promotion
- fear that advertising mechanics may induce players to overspend or disguise real costs for players through confusing terms or inadequate disclosures
- the impact of loot box monetization models on children vulnerable to compulsive spending. <The
result was a call for meaningful disclosure to help players make informed decisions, for more research and consumer education, and for better industry self-regulation.
Taking into account all the sources and trends described above, one can expect innovations and tightening in aspects: parental control, close attention to game mechanics, class action lawsuits (both from representatives of the interests of adolescents and minors), forced financing of technical improvement of identification and segmentation of children in terms of access to content and volume of spending (17).
Sources:
(1)gizmoposts24.com/apps-games/class-action-lawsuit-filed-against-ea-sports-over-loot-boxes-by-more-than-100-gamers-137859
(2) www.gamereactor.eu/more- than-15-lawsuits-filed-against-fifa-20-in-france
(3) london-post.co.uk/loot-boxes-should-be-a-consumer-protection-matter
(4) pegi.info/ news / pegi-introduces-feature-notice www.esrb.org/blog/in-game-purchases-includes-random-items
(5) www.fieldfisher.com/en/services/technology-outsourcing-and-privacy/technology -and-outsourcing-blog / consumer-protection-approach-to-tackle-loot-boxes
(6) https://www.gov.uk/government/publications/explanatory-memorandum-to-the-age-appropriate-design -code-2020-2020 / explanatory-memorandum-to-the-age-appropriate-design-code-2020-2020
(7) www.aph.gov.au/Parliamentary_Business/Committees/House/Social_Policy_and_Legal_Affairs/Onlineageverification/Report
(8) www.gov.uk/government/publications/explanatory-memorandum-to-the-age-appropriate-design-code -2020-2020 / explanatory-memorandum-to-the-age-appropriate-design-code-2020-2020
(9) assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/890734 /CCS207_CCS0520664408-001_Gov_Resp_DCMS_Committee_Report_CP_241_Web_Accessible__1___1_.pdf?fbclid=IwAR2PVcckpfvJjU-OYV8gHWBZLMWj0ePge_MH0RxwgbtlBUGXMG-gODNWv6c
(10) tiga.org/about-tiga-and-our-industry/tigas-five-principles-for-safeguarding-players
(11) committees.parliament.uk / writtenevidence / 83 / pdf
(12)publications.parliament.uk/pa/ld5801/ldselect/ldgamb/79/79.pdf
committees.parliament.uk/committee/406/gambling-industry-committee/news/147122/time-to-act-to-reduce-gamblingrelated -harm-says-lords-report ? = IwAR3N9B3j1ih6JzOl0CYwltYLpe66aFAeCANfs-fbclid ljxF99OTt9Wt2y5iyUdOw
(13) publications.parliament.uk/pa/ld5801/ldselect/ldgamb/79/79.pdf
(14) acquire.cqu.edu.au : 8080 / vital / access / services / Download / cqu: 20100 / bin4a6a8649-40b2-4635-83db-8135847b665e? View = true
(15) www.europarl.europa.eu/RegData/etudes/STUD/2020/652727/IPOL_STU (2020) 652727_EN.pdf
(16) sbcnews.co. uk / esports-fantasy / 2020/07/29 / eu-research-agency-demands-urgent-action-on-loot-box-consumer-safeguards
(17)www.ftc.gov/news-events/press-releases/2020/08/ftc-staff-issue-perspective-paper-video-game-loot-boxes-workshop
Loot boxes 2020 (foreign regulation)
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