The video games industry is once again facing political oversight in the way it handles monetisation.
The Republican senator for Missouri Josh Hawley (pictured) yesterday introduced a bill designed to ban loot boxes and pay-to-win monetisation mechanics in games played by children.
“Social media and video games prey on user addiction, siphoning our kids’ attention from the real world and extracting profits from fostering compulsive habits," he said in a press release.
"No matter this business model’s advantages to the tech industry, one thing is clear: there is no excuse for exploiting children through such practices.
“When a game is designed for kids, game developers shouldn’t be allowed to monetise addiction. And when kids play games designed for adults, they should be walled off from compulsive microtransactions. Game developers who knowingly exploit children should face legal consequences.”
In a short video on Twitter (below), Hawley described loot boxes as providing advantages to players for a monetary fee, in addition to saying that these games are "generally free". While we agree that consumers need to be given more information about monetisation options in games, the lack of nuance on Hawley's argument leaves cause for concern in the industry.
There is broader concern in the games business about whether legislators and politicians fully understand loot boxes and monetisation options in games, especially after the congressional hearings with Facebook's Mark Zuckerberg and Sundar Pichai of Google, which saw representatives betraying some severe ignorance about how tech and social media platforms work.
That being said, it's hard to feel sympathy for many of the companies that this legislation will affect. Time and time again, the industry has had chances to reign in its - at times, aggressive - monetisation practices and has failed to do so.
But at the same time, development costs have increased exponentially in recent years with the price tag of many triple-A games remaining the same as they have been for decades now, in the region of $60. As has been pointed out before, taking into account inflation, games have never been cheaper to buy. This creates enormous pressure to recoup development and marketing costs.
In a statement to Kotaku, American video games trade body The Entertainment Software Association pointed to other countries which it says have deemed that games "do not constitute gambling" - an accusation that Hawley doesn't actually level at the industry.
“Numerous countries, including Ireland, Germany, Sweden, Denmark, Australia, New Zealand, and the United Kingdom, determined that loot boxes do not constitute gambling," the organisation said.
"We look forward to sharing with the senator the tools and information the industry already provides that keeps the control of in-game spending in parents’ hands. Parents already have the ability to limit or prohibit in-game purchases with easy to use parental controls.”
If we are to be pedantic, however, the ESA's statement isn't 100 per cent honest. A rep of German games rating body USK said - as reported by PC Gamer - that "a closer discussion" is taking place into whether loot boxes in video games constitute gambling, while in Ireland this definition is caught in an on-going overhaul of how gambling is regulated in the country, as reported by The Irish Times.
Meanwhile, the Swedish government opened an investigation into whether loot boxes are gambling just yesterday, with results set to be published on October 1st, 2019. In Denmark, local regulator the Danish Gambling Authority is blocking websites that "illegally provide games with gambling elements aimed at children and young people", per its 2018 Annual Report. That follows a statement at the end of 2017 saying that loot boxes can be gambling. In June 2018, the Danish Parliament reached a majority vote to launch a research project into addiction to video games, too.
The Australian Government has been advised by a Parliament committee to "take a comprehensive review of loot boxes in video games", saying in a 90-page report that said review should "commission further research into the potential for gambling-related harms to be experienced as a result of interaction with loot boxes."
In the United Kingdom, whether video games are addictive is the subject of an ongoing enquiry by a committee for the Department for Digital Culture Media and Sport.
So, in fact, New Zealand is the only country the ESA cites where loot boxes have 100 per cent been deemed not gambling.
Today, Sen. Hawley announced upcoming legislation banning the video game industry's use of "pay-to-win" and "loot box" monetization schemes → "They need to be upfront about what their games are actually doing, and they need to stop practices that intentionally exploit children." pic.twitter.com/huQsl8eRV4— Senator Hawley Press Office (@SenHawleyPress) 8 May 2019