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.