New US Bill Against Loot Boxes Could Devastate Video Game Industry

May 10, 2019 by Natalie Whitehead

Loot boxes and microtransactions are a big part of the current video game industry. However, a new bill may change all of that very quickly.

Josh Hawley, a Republican Senator from Missouri, has proposed a new bill called ‘The Protecting Children from Abusive Games Act‘ which looks to impose consumer protections on video games mechanics that use manipulative monetization methods.

This new bill is very comprehensive and covers all of the various monetization efforts that video game companies have come up with in the recent years. This includes loot boxes and pay-to-win mechanics that Hawley says encourages players to pay a lot in microtransactions.

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The proposed bill immediately drew a response from the Entertainment Software Association (ESA).

In a statement, the ESA said

Numerous countries, including Ireland, Germany, Sweden, Denmark, Australia, New Zealand, and the United Kingdom, determined that loot boxes do not constitute gambling. 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.

At An Interesting Time

This new bill comes out at an interesting time. Concerns about loot boxes have been growing for some time now and has turned out to be a controversial topic. One of the most recent examples was the controversy surrounding Star Wars Battlefront 2. The protests forced the developers of the game and to revamp their monetization schemes and also pushed other developers to rethink their strategies.

Though many companies have pulled back on these attempts at cashing in on their customer’s enthusiasm, it is still a major part of the industry. This bill could devastate companies like Electronica Arts (EA) which draws 50 percent of its live services revenue from it. Plus, the mobile gaming industry is practically built around pay-to-win and loot box payments.

Video game companies have been pulled up in multiple countries over microtransactions in recent years. In 2018, several European countries fought hard to regulate loot boxes. For example, in Belgium, multiple companies had to pull loot boxes from their games after they were classified as gambling. Additionally, the US Federal Trade Commission (FTC) has started looking into them from last year.

Though companies say they can have it under control, self-regulation does not seem to be the answer. This is because many gaming executives love the revenue that loot boxes generate. Their popularity among gamers, on the other hand, is not that high and many of them won’t miss loot boxes if they are removed. It will be interesting to see how this fight in the US will turn out for the video game industry.

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If there is one topic that really gets Natalie excited it has to be the mathematics of gambling, having worked for a major gaming company in the audit department she loves nothing more than revealing all manner of facts and figures. Many of her news stories relate to both online and bricks and mortar gaming and are always worth checking out.

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