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Video game companies issue new regulations on loot boxes

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The loot box, or Apex Crate, store in the video game Apex Legends, developed by Respawn Entertainment and published by EA Games. Image sourced from Twitter.
The loot box, or Apex Crate, store in the video game Apex Legends, developed by Respawn Entertainment and published by EA Games. Image sourced from Twitter.

A ‘Loot box,’ based on a definition from tech website TechTarget, is”an in-game purchase consisting of a virtual container that awards players with items and modifications based on chance. Loot boxes are considered to be a type of microtransaction.” A ‘microtransaction,’ based on a definition from the aforementioned publication, “is an e-commerce transaction involving a very small sum of money in exchange for something available online, such as an application download, service or Web-based content.”

Loot boxes are placed in games to help game developers recoup some of the money that was used in the development of the game, as well as to pay the company’s staff and to help produce future gaming content. This system, however, has become increasingly unpopular and controversial in the gaming community over the years. Gamers and game journalists alike view loot boxes as a form of ‘gambling,’ as players use real-world money to purchase randomly-selected items. Loot boxes are considered optional, but some loot box systems can give an unfair gameplay advantage to those willing to pay for them. The advantages and content vary from game-to-game, but some of them include more powerful weapons, stronger armour, unique abilities and other special content only available in loot boxes.

On August 7 2019, the Federal Trade Commission of America (FTC) held a public workshop, titled ‘Inside the Game: Unlocking the Consumer Issues Surrounding Loot Boxes,’ to discuss and examine consumer protection issues related to video game loot boxes. The event was attended and featured discussions given by academics, industry officials, consumer advocates and other attendees. The Entertainment Software Association of America (ESA) issued a response to the public workshop. The statement highlighted steps that the ESA has been taking to make loot boxes fairer.

“Last year, in response to growing concerns about in-game spending, the Entertainment Software Rating Board (ESRB) expanded its [ratings] disclosures to include an “In-Game Purchases” label on packaging for video games that offer the ability to purchase additional in-game content. In addition to checking ratings, parents can also utilize password-protected controls available across video game consoles, computers, tablets, and mobile phones to limit or prevent children from making purchases within games, as well as managing screen time, age-appropriate game content, and other features.  For more than 25 years, the ESRB rating system has been a pillar of our industry’s commitment to our players and parents.  In fact, the FTC has repeatedly praised the industry’s self-regulatory practices,” the statement from the ESRB highlights.

The ESRB also added that major video game companies and publishers are creating new policies and initiatives to tackle the loot box issue: “Several video game industry leaders are announcing new initiatives to help consumers make informed choices about their purchases, including loot boxes. The major console makers – Sony Interactive Entertainment, operator of the PlayStation platform, Microsoft, operator of Xbox and Windows, and Nintendo, operator of the Nintendo Switch gaming platform – are committing to new platform policies that will require paid loot boxes in games developed for their platforms to disclose information on the relative rarity or probability of obtaining randomized virtual items. These required disclosures will also apply to game updates if the update adds new loot box features. The precise timing of this disclosure requirement is still being worked out, but the console makers are targeting 2020 for the implementation of the policy.”

The ESRB continued to outline further steps they are taking to solve this problem: “In addition, several of ESA’s publisher members already disclose the relative rarity or probability of obtaining in-game virtual items from purchased loot boxes, and other major publishers have agreed to do so no later than the end of 2020.” With these plans and steps outlined and in the works, as well as the on-going conversation around loot boxes, gamers are eager to see a change in how their favourite games are monetized.

Edited by Kojo Essah

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