US Federal Trade Commission Launches Investigation Into Video Game Loot Boxes and Gambling

Written by Stuart Thomas on Wed, Nov 28, 2018 12:12 PM

The US Federal Trade Commission (FTC) has confirmed it will be launching an official investigation into video game loot boxes and the potential danger they could pose to children.

FTC chairman Joseph Simmons announced the decision yesterday before the Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security.

The move stems from a filing by Senator Maggie Hassan, New Hampshire Democrat. Back in February of this year, Hassan wrote a letter to the ESRB requesting that games be affixed with warning labels for loot boxes and the potential for addiction.

At the time, Hassan warned the FTC would become involved if no action was taken, saying  “In the past, the FTC has looked at video games. Do you agree that children being addicted to gaming and activities like loot boxes that might make them more susceptible to addiction is a problem that merits our attention? And depending on how the ESRB responds to my inquiry, would the FTC be willing to look at loot boxes as an issue independently?”

The four FTC nominees present agree they would take be willing to take a look at loot boxes, which leads us to today and the FTC’s new pledge to actively investigate video game loot boxes for potential gambling mechanisms. Specifically, in games that may be targeted at children.

Hassan has now claimed loot boxes and other microtransactions could represent a massive $50 billion industry by 2022, suggesting their impact is growing exponentially. “Loot boxes are now endemic in the video game industry and are present in everything from casual smartphone games to the newest, high-budget video game releases,” said Hassan.

“Children may be particularly susceptible to engaging with these in-game purchases, which are often considered integral components of video games. Just this month Great Britain’s gambling commission released a report finding that 30% of children have used loot boxes in video games. The report further found that this exposure may correlate with a rise of young problem gamblers in the United Kingdom.”

Just in case you missed the report from last week, a study from the UK Gambling Commission discovered gambling addiction among under 16’s has quadrupled during the past two years. As Hassan says, this may correlate with the rise of loot boxes in games.

A number of big publishers that have increasingly based their business models around loot boxes are going to find themselves backed into a corner soon enough. Global pressure is now mounting on the business of randomised loot crates and it doesn’t sound as if this is something that’ll just be brushed under the carpet anytime soon.

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04:37 Nov-29-2018

What really amazes me is how greedy these AAA publishers are. They are trying to convince everyone that the obvious gambling in their games is not actually gambling.

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09:20 Nov-29-2018

It is the hill they choose to defend and die on, no matter how ridiculous it makes them look. It's about money, and these sorts will sell their souls for it. Integrity and dignity are things of the past.

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11:00 Nov-29-2018

What amazes me is their investors, who want them to have a higher profit(percentage) with each new game than the last.
After Activision-Blizzard released CoD Black Ops 4 in October, their stocks dropped by about 15$, due to investors pulling out hard. Why? Because Black Ops 4 made "only" 550 million dollars in the first three days, and 3 years earlier, Black Ops 3 made the same "only" 550 million dollars and there was no growth so investors at Activision-Blizzard's Treyarch studio pulled out... -_-


That's why Captialism's model of constant growth is unstainable and bad economy design.

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11:41 Nov-29-2018

You can blame investors in this case, but the whole blame doesn't lie on them.
Capitalism supports constant growth, but doesn't support explosive growth. The faster you grow the earlier you're going to hit the upper limit after which point everything goes downhill and investors starts leaving.
Which is at the point where AAA publishers are reaching, some are even there it seems.

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11:41 Nov-29-2018

The issue here is that AAA companies didn't control their growth. They saw the money racking in, so they wanted it more and wanted it faster without ever taking any considerations about the future apart from the next quarterly earnings report. They are as guilty as investors asking for way too much, because they made those investors ask for way too much. Now the problem is that they can't keep up with those demands they put on themselves.

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13:22 Nov-29-2018

that's also absolutely true, but that's their job, I mean the job of the CEO/COO. Make the biggest profit possible, or be changed with another one that has the same job. They go to a shareholder meeting, they haven't made maximum profit, some other dude stands up gives a speech backed up by facts how the profits could be much higher, current one gets fired, new one gets hired... sad but true. Either way, a guy who will make as much money as possible for the shareholders and thus the company will be hired.


There needs to be a reset switch for this that doesn't allow them to do the same after restart XD
A reset switch where there are no investors and only them and if they screw up, there would be no excuse.

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13:54 Nov-29-2018

Well yes, that's what I meant. Their future predictions go only as far as the next quarterly report, disregarding anything that might and will happen even in the near future of a year or two in order to achieve the absolute most amount of profit right now.
There will be a reset switch, and it might be sooner rather than later. Investors will leave, companies will shut down and other ones will rise. It's up to them whether they repeat the same thing or play a smarter game.

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20:23 Nov-28-2018

ban them, ban them all

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16:44 Nov-28-2018

Meanwhile the Entertainment Software Association continues to defend the use of loot boxes in games because they "enhance the experience"( words used three times in one paragraph!). It seems the triple A companies have their work cut out for them, those deep deep pockets at ESA will not fill themselves.

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17:39 Nov-28-2018

Wasn't ESA created by AAA companies as someone to regulate and control the industry?
So it's hard really to expect something from them.

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17:54 Nov-28-2018

I know, but they could at least offer some more substantial arguments to support their course of action in defending LTs. The whole "enhance the experience" crap is driving me crazy!

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18:30 Nov-28-2018

Yeah, you're not wrong.

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20:00 Nov-28-2018

man so many people watching Jimbo.

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21:06 Nov-28-2018

Oh geez, you caught me! Spare me the bull**** assumptions, dude! It's quite possible to have a personal view on a certain subject. Not everything revolves around YT celebrities.

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07:07 Nov-29-2018

I know, but like already one person here basically quoted that dude and now a second comment that is almost a quote from him...
I personally don't see them as "YT celebrities", they are just random people making videos on the internet 1 subscriber or 100 million doesn't matter and I don't watch him often, it's just that he covered it first and youtube recommended it to me.


It's just that like how is it even possible to word it so closely, I guess coincidences do happen.


And damn you got sensitive real quick XD

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08:44 Nov-29-2018

Nobody quoted Sterling, just people expressing their disdain about this whole LT debacle. Just like you did, in your own comment. But I guess not everyone can share a similar thought and "get away with it". As for my over sensitivity, I guess we each have our own flaws. Like you being a presumptuous douche!

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11:04 Nov-29-2018

I love being a "douche" and an "arsehole", because I never intend to be, but people always read into my comments like that, and it's amusing as hell XD

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11:46 Nov-29-2018

That isn't amusing as much as it's worrying. You should really work on that a bit.
And about me "quoting" Sterling. I do watch Jim, but my opinions and views on these issues are still my own. I do my best to make sure they're as pure as they can be. Just because we all reach the same eventual conclusion doesn't mean we were influenced by the influencers.
It just shows how see through this presumably complex industry actually is.

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12:23 Nov-29-2018

No, it's not that your opinion is the same, I mean there can be only so many opinions on one topic, it's the wording that made me think of him. I mean words too are limited, expressions too, but still.


And again, I didn't mean it in any bad way. And I personally watch Jim Sterling once in a blue moon, since usually I get news faster elsewhere, It just happened that out of all my sources he was the first to cover this and for some reason I remembered a lot of what he said almost word by word, I guess he is good at what he does and I guess it could be the same for many people too.


And IDK what I have to work on, when people read into what I say in a totally different meaning and intentions than the ones I imply... Like seriously...

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12:27 Nov-29-2018

If I am to say something negative about someone, I say it straight, blunt and simple, I never use some dodgy soft language that is written one, but means another, metaphors and so on... hidden meanings... hidden implications... alternative meanings and implications to what it's written and so on... none of that...


How other people interpret what I say, is up to them, some people read in optimistically, some people read in pessimistically, but I'm quite literal, as I said straight, blunt and simple.

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12:28 Nov-29-2018

And you just replied perfectly btw. That's what I'd expect. You said that you agree with him, but it's your own opinion and etc, etc. that's what I'd expect.


Either "yeah I agree with him that's why I say it" or "yeah I agree(or disagree) and it's my own opinion"

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13:10 Nov-29-2018

How other people interpret what you say is entirely onto you. Unless you have an assistant who types what you say in somewhat free manner, those words you put down are the ones you came up with yourself. If you're being literal, blunt and straight then you're never implying anything, you can't really have it both ways.
That's why I said you need to work on it. If people constantly interpret what you meant in the wrong manner, than maybe they it's not the problem with them.

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13:25 Nov-29-2018

I don't think it's a problem at all, no matter how you say something, some people will interpret it one way, some in another. Optimists will see it more positive than it is, or positive at all, pessimists will see it negative or more negative, realists will see it literally and whatever is in between, on another abstract level and so on will get a different message and intentions from what is said.

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14:36 Nov-29-2018

A blunt and straight statement can be interpreted only one way regardless of who's on the other side. The very reason why we're having this conversation is because you weren't straight nor blunt but very, very vague. The sentence you wrote can be interpreted in plethora of different ways because you wrote it that way. You might've meant it exactly as you said it, but wording matters and your wording was very vague.

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14:37 Nov-29-2018

Wording matters, a lot. Especially when you're talking to someone you've never talked before. They cannot know what you meant without you telling them what you mean, and they certainly cannot possibly know whether you're always being straight or not without you explicitly either saying so, or wording your response in a way to represent that.

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14:37 Nov-29-2018

You did neither. So complaining in a way that they don't understand you when you weren't being understanding is a pointless complaint. Being blunt is not as easy as you think, especially when only thing you have are written words.

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16:05 Nov-29-2018

I said that I would be straight, blunt and simple when saying Negative things, not all the time. Obviously, I was not saying anything negative, at least obvious to me.

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15:36 Nov-28-2018

Am i the only one who isnt sure what loot boxes are? or is it because i dont play fortnite and pubg? and in general new games but stay to my old good online games

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15:39 Nov-28-2018

Depends on what online games you're playing. Most online games nowadays have microtransactions in it. And EA is the highest of them all.

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17:12 Nov-28-2018

I think technically StarCitizen, train simluator or [insert f2p game] has worse microtransactions than EA
The hate with EA is that they're doing mainstream AAA games at full price, that aren't very good and still have microtransactions in.

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13:19 Nov-29-2018

StarCitizen, train simulator or other F2P games may have the worst microtransactions than EA. But Most people criticize EA. More than those games could've done.

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13:21 Nov-29-2018

With so many crappy and worst companies on the rise(Like EA, Ubisoft, Activision, bethesda and such). It won't be long there would be a ranking for that and would be titled "Top ten worst gaming companies of all time".

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15:31 Nov-28-2018

Good news, this needs to die but im sure this is not the end from those greedy c*nts...

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14:06 Nov-28-2018

The FTC is just useless they waited this long to act and even then they're only doing so be other European countries decided to take action months before!

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14:08 Nov-28-2018

I bet if the EU hadn't started fighting against lootboxes in gaming the FTC would have just sat there and let EA and its greedy ilk do whatever they wanted.

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13:54 Nov-28-2018

ahh, I miss the times when kids were just addicted to the gameplay itself... even that feels hollow now

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17:13 Nov-28-2018

Too much grind in many games these days just to fill up the 'hours to complete'

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17:56 Nov-28-2018

the problem is that it's way too basic and repetitive grind, with almost no satisfaction.

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12:48 Nov-28-2018

Who is Hassan referenced in the article?

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12:52 Nov-28-2018

Senator Maggie Hassan

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13:20 Nov-28-2018

ohk

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12:35 Nov-28-2018

Now that lootboxes are slowly burning up like trash they are, what's the next exploitative thing our "beloved" AAA games industry is going to pull?
My speculation, considering they're really into "Live Services" lately, I wouldn't be surprised if we see a resurgence of a subscription model incorporated into it. Of course, next to the full entry price, microtransactions galore, season passes, DLC's and staggered releases as it seems to be the case we've seen with EA and RDO.

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12:37 Nov-28-2018

Jim is that you? XD

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12:44 Nov-28-2018

If there's one thing I agree with Jim, it's his cynicism for this industry. I had a much more positive outlook, I disagreed with him on many occasions, but I can say that he's is right more often than he is not, at least on these issues.
It's a shame though. He shouldn't be right. I shouldn't be right.

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13:14 Nov-28-2018

Yeah, I think he is right about pretty much I've heard him talk about, but often he's not completely right.

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15:32 Nov-28-2018

Uhm which Jim you guys are talking about?

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15:46 Nov-28-2018

Jimbo Sterling

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12:24 Nov-28-2018

Yes, accept that it's gambling and virtual casinos and tax and/or ban those exploitive bullcraps.

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