FTC Building
Exterior of the Federal Trade Commission (FTC) in Washington, D.C.

FTC Chairman Promises to Look Into Video Game Lootboxes

Federal Trade Commission Chairman Joseph Simmons said on Tuesday he would investigate video game loot boxes. His goal is to ensure children are protected against possible gambling malpractices and their parents are educated on the matter. Moreover, certain forms of loot boxes may be illegal.

Yesterday, Simmons testified before the Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security. Following his testimony, Senator Maggie Hassan (D-NH) asked whether the FTC Simmons would investigate video game loot boxes. Simmons confirmed the investigation.

Growing Senate Involvement

Hassan had already mentioned the issue earlier this year. Nine months prior to yesterday’s events, Hassan sent a letter to the Entertainment Software Ratings Board. In the letter, she asked them to review the rating process as it relates to loot boxes. Moreover, she asked the group to examine how loot box marketing affects children and create a best practices guideline for developers. Hassan warned if they did not take sufficient action, she would ask the FTC for their involvement.┬áThen, during Tuesday’s testimony, Hassan was firm in saying the problem of loot boxes continues to grow.

She goes on, “Earlier this year, the confirmation hearing for most of you, I discussed the possibility of the FTC examining the issue of children in the video game space. Specifically, we discussed loot boxes, which allow end-game purchases with real currency for surprise winnings…most of you agreed this is an area that could use additional oversight…”FTC

The committee noted how endemic loot boxes are in the industry, with their presence felt in smartphones and high-budget releases. Loot boxes will represent a $50 billion industry by 2022. For comparison, in 2015, the industry was estimated to be worth $91.5 billion.

Despite the growing concern over the prevalent feature (Great Britain has generated a report linking loot boxes to a rise in young gamblers), the ESRB defends loot boxes.

“Contrary to assertions, loot boxes are not gambling. They have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase. They can enhance the experience for those who choose to use them, but have no impact on those who do not.”

What do you think of loot boxes? Should the United States create regulations against the prominent feature? Let us know in the comments!