Loot Box Investigation to Begin at the US Federal Trade Commission

The US Federal Trade Commission (FTC) is poised to begin a video game loot box investigation. The investigation follows a number of other country’s investigations into loot boxes, their legality, and how loot box-type microtransactions relate to gambling.

Joseph Simons, chairman of the FTC, pledged that his agency would investigate loot boxes. Loot boxes have become common in many multiplayer games like Overwatch and even single-player titles like Middle-earth: Shadow of War (although they were patched out later). These microtransaction systems generate continued revenue through real-world purchases of mystery items. Simons’ pledge came in front of Congress on Tuesday, November 27.

Senator Maggie Hassan (D-NH) said that loot box-esque systems were “endemic” in the video game industry, and could be found in all kinds of games. Hassan argued that children could be “particularly susceptible” to the systems driving loot box purchases. Hassan believes it is time the FTC investigates loot boxes, to ensure kids are protected, and that parents are educated about potential problem gambling in the future.

Senator Ed Markey (D-MA) followed Hassan, with specific interest in games targeted at children that had in-game purchases. The FTC assured Markey that it would investigate these issues, and that the agency would look at manipulative in-app marketing.

The investigation could lead to regulations and differing taxes on games with loot box systems. The ESRB began placing a blanket “in-app purchases” label on games that offered any form of DLC in March 2018. That move was criticized sharply, as it made no attempt to differentiate between loot boxes, premium currency, and story expansions.

Unlike the ESRB, which is a trade organization run by the Entertainment Software Association, the FTC is a government entity. An FTC loot box investigation could lead to nothing, or wide-ranging changes to how games are marketed in the United States.

Other countries have begun investigating loot boxes and gambling in games over the past year or so. UK and Irish investigations concluded that loot boxes were not gambling. An Australian investigation suggested that loot boxes were “akin to gambling.” Belgium and Netherlands blocked loot boxes in CS:GO, Overwatch, and several other games. Publishers have tried to push back against the negative press, with 2K games asking fans to contact the Belgian government and voice their support for loot boxes in games. A number of other countries are currently investigating loot boxes, microtransactions, and their connections with gambling.