Should you be worried about proposed gaming laws?

When EA provoked the entire gaming base with loot boxes in their progression system for Star Wars: Battlefront II, it was hard to know the extraordinary backlash that would ensue. Since then, we’ve seen a myriad of articles and even many attempts at regulation legislation around the concept of loot boxes and their place in entertainment.

Fast-forward a few months later to after the Parkland shooting: President Donald Trump blamed video games for the violence, even going so far as to call a summit with video game industry leaders to solve this problem. While the summit looked to be largely a PR stunt—as nothing of any real meaning was accomplished—it brought back memories of California Senator, Diane Feinstein and her goal of regulating violent video games.

How concerned should we be about these laws and their impact on this industry? Of course that depends on where you live and how your state’s laws might impact you, but on a Federal level, there isn’t a huge cause for concern.

Ongoing Dialogue

There is dialogue occurring on the federal level. As Senator Hassan (D-NH) wrote to the Entertainment Software Ratings Board (ESRB) about loot boxes in February;

“The prevalence of in-game micro-transactions, often referred to as ‘loot boxes,’ raises several concerns surrounding the use of psychological principles and enticing mechanics that closely mirror those often found in casinos and games of chance.”

The sentiment is essentially expressing concern for loot boxes as gambling. With laws as they are now, you have to be twenty-one in the United States, and eighteen in international waters. For video games, there are no universally enforced age limit, and virtually no geographical restrictions.

The ESRB issued a response a couple weeks after Senator Hassan wrote to them. The result? A label on video games sold in physical boxes that says “In-Game Purchases,” similar to their warnings about content depicting sex and violence. The ESRB went on to also strongly rebuke the claims of a “Gaming Disorder” as proposed by the World Health Organization, and the claim that loot boxes target children. If you wish to read the entire letter, Bring Crecente of RollingStone uploaded it here.

The most poignant point made by the ESRB is the fact that loot boxes could easily be akin to a pack of baseball cards. Or, more appropriately, a pack of Magic: The Gathering Cards.

In the end, the discussion continues to develop, but it looks like the ESRB is staying ahead of the conversation. They even launched a website to help parents with parental controls. Check it out at www.Parentaltools.org.

State Level Proposals

Hawaii made the news with their bills on loot boxes, though they have a long way to go. House Bill 2686 would prohibit the sale of video games containing a system of purchasing a randomized reward to consumers under 21 years of age.

There are concerns over this restriction. Games like Overwatch, where loot boxes are purely for cosmetic items, would now be restricted to those who are 21 and over. Say goodbye to many of those who play video games professionally.

But the problems don’t stop there. The bill defines a “retailer” as any person who offers video games for sale, including resale by the purchaser, through any means, including sales outlets, catalogs, or the internet.

Were this proposal to go into effect, games like Overwatch could be completely crippled. It would make more sense for Blizzard Entertainment and other game companies to simply not sell in Hawaii rather than adopt a new sales policy in keeping with potential restrictions.

House Bill 2727

The other bill going through Hawaii legislature is House Bill 2727, which would require video game publishers to publish the drop rates in loot boxes. If you recall, this is similar to what China did in 2017 when they passed a law requiring the exact same thing. It worked, until Blizzard Entertainment and other game companies found a loophole in the law by “giving” the loot boxes away to their Chinese customers. Chinese customers buy in-game currency and those transactions come with “free” loot boxes. There is nothing to limit Blizzard from doing the same thing in Hawaii, or anywhere else in the United States should similar laws be passed.

In Washington State, Senators Ranker (D), Carlyle (D), and Keiser (D) proposed Senate Bill 6266, calling for the state gambling commission to do a survey of video games and loot boxes and submit a proposal for regulation. Indiana Senators also proposed a similar bill, Senate Bill 333, but it got nowhere in the legislature, and has since been forgotten.

Should you be worried?

Let’s circle back to Hawaii for a moment, as they’ve been the most vocal of the states regarding legislation and loot boxes. It’s unlikely any of these bills will pass, but it certainly isn’t the end for Senator Chris Lee’s (D) attempts. The proposed bills bring up the interesting question of how similar loot boxes are to gambling and the dopamine mechanisms used to keep people playing.

We’ve all had the “just one more turn” problem when playing games like Civilization V, and this can translate into potentially dangerous behavior when real money is on the line.

But is restricting video game sales really the answer? As the ESRB points out in their staunch defense that loot boxes are not the same as gambling, “loot boxes always guarantee you something in return.” That is a stark contrast to what gambling is where you can lose everything with no return.

From the looks of it, most of the proposed bills look like they will fade away. Many are knee-jerk responses to tragedies around the nation and the EA fiasco.

It could be argued that the loot box problem isn’t really a problem. It’s the video game industry evolving, whether we like it or not. Loot boxes are something the mobile game industry has dealt with from its infancy, and Apple’s regulations seem to be doing a fine job at stopping kids from spending hundreds, if not thousands, of dollars on in-game purchases.

On a final note, the Entertainment Software Associate just joined the fight for Net Neutrality. They join other companies like Mozilla in the attempt to overturn the current FCC’s order eliminating net neutrality rules implemented underneath the Obama administration.

"Because the FFC’s Order permits ISPs to take actions that could jeopardize the fast, reliable, and low-latency connections that are critical to the video game industry."

This is, by far, the most critical regulation we should worry about. We’ve all seen throttling applied to mobile phones, streaming, and legal torrenting. What if that became legal? Many video games can be legally downloaded through bittorrent, but if ISPs can throttle that information, how long will it take to download the latest game? Final Fantasy XV came in at 150 gigabytes for the full 4k version. That’s without even going into the practice of buffering, something companies already do for some streaming services during high traffic times.

Overall, ESRB and the ESA are doing a fine job (something I never thought I’d say) at fighting our battles for us. But keep an eye out for the rhetoric that can come from politicians about video game violence influencing the youth. If one of these state bills moves forward, gaming companies will surely step up and fight it, after all… these types of laws would surely cut into their bottom line.

And let’s not forget, game companies like Activision and EA have the money to fight back hard.