The FTC and Loot Boxes

Loot boxes are randomized rewards in video games. They’ve been around for a while and a lot of players dislike the use of this controversial reward mechanic. Governments in Europe have given loot boxes some attention because when players are allowed to pay real money for them, the mechanic could be seen as a form of gambling. Recently, the U.S. Federal Trade Commission (FTC) announced that they would be investigating the issue.

Governments in Europe, including those of the Netherlands and Belgium, have classified loot boxes as gambling. Belgium even banded them outright about half a year ago. On Tuesday, New Hampshire Senator Maggie Hassan expressed her concern for children affected by the issue, saying “Given the seriousness of this issue, I think it is in fact time for the FTC to investigate these mechanisms to ensure that children are being adequately protected and to educate parents about potential addiction or other negative impacts of these games.” Upon receiving this request, FTC chairman Joseph Simons agreed to investigate the issue, though gave no further details as to how he planned on conducting such an investigation.

What Else Could This Affect?

If the FTC is investigating the issue of loot boxes because it potentially qualifies as gambling, it would stand to reason that collectible card games would fall under the same umbrella. If players are paying for a product without a guarantee of what they’re getting, should they qualify as gambling as well?

Some Things That Could Happen

This investigation has many implications for game developers, players, and retailers on a national level. Some resulting legislation could range from being as extreme as banning loot boxes outright to as mild as requiring retailers to reveal the contents of a loot box before selling them. If this investigation does lead to new regulations on loot boxes in video games, it could also set a precedent for the U.S. government to further regulate things involving commerce in the industry, like microtransactions.

The exact nature and ramifications of this action by the FTC remain uncertain, but there will still be lots of great video games to play. No matter what comes of this, the portions of the video game industry which are not directly utilizing loot boxes will likely remain unaffected.