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  1. UK Parliament: Ban all loot boxes until evidence proves they’re safe for kids Call comes as part of massive inquiry into "immersive and addictive technologies." Enlarge / UK Parliament sends a clear signal: loot boxes in series like FIFA are on notice. EA / Machkovech UK Parliament published a wide-ranging inquiry on Thursday looking into the rise of "immersive and addictive technologies" and what the British government should do to recognize manipulative, unsafe, and otherwise uncouth business practices in a rapidly changing industry. The report covers a lot: user tracking, cyberbullying, esports, social media, and on and on. Tucked into this sweeping report is at least one wholly firm rebuke of a notorious games industry practice: the loot box. And as far as Parliament is concerned, loot boxes should be banned outright in any games targeted to minors. "We recommend that loot boxes that contain the element of chance should not be sold to children playing games, and instead in-game credits should be earned through rewards won through playing the games," the Parliament report reads. "In the absence of research which proves that no harm is being done by exposing children to gambling through the purchasing of loot boxes, then, we believe the precautionary principle should apply and they are not permitted in games played by children until the evidence proves otherwise." Not Kinder about it This statement follows an awkward exchange between Parliament and an EA executive during a June hearing. At that time, EA Legal and Government Affairs VP Kerry Hopkins copped to the "surprise" factor attached to games' loot boxes—which ask players to blindly pay for a wholly random in-game item, outfit, or reward. After comparing loot boxes to retail items like Kinder eggs (and never acknowledging that with those eggs, customers at least get a guarantee of some chocolate), Hopkins went on to call gaming's loot boxes "quite ethical and fun [and] enjoyable to people." Thursday's statement from Parliament recalls this specific description from Hopkins, then responds: This [description] is noticeably out of step with the attitude of many of the gamers who contacted us following our evidence session, including those who vehemently rejected her characterisation of packs not as loot boxes but as “surprise mechanics.” One gamer called the company’s testimony to us “a bare face lie." Another told us that the company has "heavily marketed and referred to their systems as ‘loot boxes’ for several years and... the mechanics of the system are exactly the same no matter what they choose to call it." Coincidentally, much of Parliament's Thursday commentary on loot boxes revolves around EA, particularly the company's top-selling FIFA series of video games. The commentary points out EA's bullish admission that FIFA's "Ultimate Team" mode, which revolves around wholly random drops of purchasable cards, accounts for hundreds of millions of dollars of digital sales revenue. After quoting EA sales figures, the report explains how the annualized game series routinely wipes players' card collections when jumping from one year's version to the next. "One gamer told us that this cycle resulted in them spending 'almost £800 to £1000 a year annually on FIFA,'" the report says. "Another gamer told us that because a pack’s contents 'directly affects gameplay because some players are not as good as others,' it incentivises people to keep buying packs in the hope of getting better players and, therefore, performing better in the game." The heart of this inquiry subsection can be found in a quote taken from a concerned UK citizen, which acknowledges, then obliterates, the gaming industry's common "only cosmetic" defense of loot box elements: "Children are especially vulnerable because they lack the maturity to understand that these purchases are manipulative, and their parents may not understand that these purchases are entirely unnecessary." What’s to be done? The inquiry takes a further scientific look at the psychology of game players enticed by loot boxes. After citing multiple studies, the inquiry concedes that a clear, causal link has yet to be established between loot boxes and problem gambling. Still, the current preponderance of evidence has at least convinced researchers that more transparency about loot boxes in games, and about their effective overlap with games of chance like slot machines, should be made apparent to game players and their parents—if not used as consideration to slap age restrictions on said games on par with gambling. To buffer this argument about the gambling-like qualities of loot box acquisition, the study takes a lengthy dive into the black market of virtual item sales, particularly attached to Counter Strike: Global Offensive. "The volume, variety and sophistication of websites advertising opportunities to exchange in-game items for cash, indicates that to term such circumvention of regulation as ‘occasional’ understates the extent of this issue for certain games," the report reads. But gambling-like regulation of loot box practices is stymied by at least one current British law. "Purchasing loot boxes does not meet the regulatory definition of licensable gambling under the Gambling Act 2005 because the in-game items have no real-world monetary value outside the games," the inquiry reads. (That's one big reason the inquiry cites so much data about these in-game items having cash value in the black market.) The report thus suggests that "the Government should bring forward regulations under section 6 of the Gambling Act 2005 in the next parliamentary session to specify that loot boxes are a game of chance." From there, either a rewriting of the law may begin, or regulators would at least be held to public scrutiny in explaining why they wouldn't do so. Source: UK Parliament: Ban all loot boxes until evidence proves they’re safe for kids (Ars Technica)
  2. EA: Loot boxes actually “surprise mechanics” that are “ethical and fun” Gaming reps at UK parliamentary panel also answer charges of addictive game design. Enlarge / If this image seems irrelevant to the story, may I suggest you need to catch up on your "Spaceship Surprise" viewing. YouTube / Sesame Street Representatives from EA and Epic Games spoke in front of a UK parliamentary panel Wednesday (transcript). They were there to defend the game industry against charges of addictive game mechanics and encouragement of gambling via loot boxes. But at least one of those representatives took issue with the basic premise that randomized item purchases should be labeled as "loot boxes" in the first place. "That is what we look at as 'surprise mechanics,'" EA Legal and Government Affairs VP Kerry Hopkins told the panel when asked about the ethics of loot boxes. "It is important to look at this. If you go to—I don’t know what your version of Target is—a store that sells a lot of toys and you do a search for surprise toys, you will find that this is something people enjoy. They enjoy surprises. It is something that has been part of toys for years, whether it is Kinder eggs or Hatchimals or LOL Surprise!" As implemented in a game like FIFA, Hopkins went on to argue that these surprise mechanics are "quite ethical and fun [and] enjoyable to people... We think it is like many other products that people enjoy in a very healthy way. They like the element of surprise. "The packs—the surprise that we talked about a little before—are fun for people," Hopkins said. "They enjoy it. They like earning the packs, opening the packs, and building and trading the teams." Hopkins cited decisions by UK and Australian gambling commissions that loot boxes do not constitute gambling, adding that contrary decisions by Belgium and the Netherlands are due in part to "different gambling laws" in those countries that criminalize loot boxes based on different standards. What counts as “addictive”? Aside from loot boxes, the hearing largely focused on whether games like Fortnite and FIFA were unhealthily addictive for at least a portion of the player base. Legislators suggested game makers might have a "duty of care" to prevent the most compulsive uses of their products, based on their reading of an Online Harms White Paper published by the UK government in April. When legislators called attention to the World Health Organization's recent listing of a "gaming disorder" diagnosis, though, industry representatives pushed back on implications of that decision. "We don't think our game is addictive," Epic Games Director of Marketing Matthew Weissinger said. "I think the use of the term addiction unfortunately masks the passion that our players have and the joy they get from our game. Personally, I think it is a mischaracterization of a term like 'addiction.'" When lawmakers brought up anecdotal reports of players spending extreme amounts of time or money on games like Fortnite, Epic Games General Counsel Canon Pence allowed that "like most things in the world, there is a way to have an unhealthy level of engagement, like even exercise." Hopkins added that "some people probably think I spend too much time reading books. I know that my partner spends too much time playing pool, but he spends that time playing pool because that is what he enjoys doing and he gets very good at it. It is really not something that we could look at and say, 'Well this person played too many hours and therefore it is unhealthy.'" "We work closely with our industry colleagues to provide tools and information," Hopkins said. "We are not able to go out and diagnose individuals; we are not able to go into their home and tell them how to play." When a lawmaker suggested that playing a game for ten hours straight "has to be unhealthy," Hopkins answered back: "I mean this in a very respectful way, but why can I say that? How can I say that? Has a doctor said that playing for 10 hours straight is unhealthy?" "Some players, such as FIFA and FIFA Ultimate Team players, are competitive and want to continue to improve," Electronic Arts UK Country Manager Shaun Campbell added. "For players who want to go into a career in esports, that is what they do: they practice and love spending time playing the game. It is difficult to characterize what excessive is. Ultimately, it is what feels out of balance for the individual." While there wasn't much agreement between the two sides of the hearing, and even less in the way of decisive action, there were some signs of compromise and conciliation. "I certainly acknowledge that there is more that the industry can do," Pence said. "I acknowledge that we have room to grow. I would not presume to say that you would not be able to come up with more questions for us in future, but I hope to continue to make improvements." Source: EA: Loot boxes actually “surprise mechanics” that are “ethical and fun” (Ars Technica)
  3. Expansive prohibitions could heavily impact large swathes of the game industry. Unlike this ceramic replica, video game loot boxes are not filled with real candy. ThinkGeek Weeks ago, Senator Josh Hawley (R-Mo.) released an outline for the The Protecting Children from Abusive Games Act, aimed at stopping randomized loot boxes and pay-to-win mechanics in the game industry. Today, Hawley was joined by Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.) in formally introducing that bill in the Senate, complete with an 18-page draft of its legislative text. Perhaps the most interesting portion of the bill attempts to define so-called "pay-to-win" mechanics in games. Those are defined broadly here as purchasable content that "assists a user in accomplishing an achievement within the game that can otherwise be accomplished without the purchase of such transaction" or which "permits a user to continue to access content of the game that had previously been accessible to the user but has been made inaccessible after the expiration of a timer or a number of gameplay attempts." For multiplayer games, this would also include any purchasable in-game content that "from the perspective of a reasonable user, provides a competitive advantage." As far as loot boxes are concerned, the act targets games where purchasable in-game content is randomized or partially randomized. This includes games where you purchase one item for the chance to purchase unknown or random items in the future, closing one potential loophole before it even starts. Any games fitting the above definitions would be illegal to publish or sell under the act, provided those games were shown to be "minor-oriented" (based on guidelines similar to those laid out in COPPA) or that publishers had "constructive knowledge" that some players were under 18. The FTC and state attorneys general would have authority to enforce the act via civil penalties, and the FTC would be required to release a report on compliance within two years of its passage. "The onus should be on developers to deter child consumption of products that foster gambling and similarly compulsive purchasing behavior, just as is true in other industries that restrict access to certain kinds of products and forms of entertainment to adult consumers," according to an FAQ on the bill from Hawley's office. A huge potential reach The expansive definitions for prohibited content in this act would have far-reaching consequences across the game industry. In mobile gaming, ultra-popular mobile titles from Candy Crush Saga to Clash of Clans, and countless games in between, use gameplay timers and in-game items to gate progress as almost a matter of course. Separately, major games ranging from FIFA to Overwatch rely on randomized loot boxes for the vast majority of their revenue these days. Rulings against loot boxes in Belgium and The Netherlands have forced major publishers to stop selling games in those countries. But the United States is an overwhelmingly larger market where similar prohibitions could have a much larger effect on these publishers' bottom lines. "These are very resourceful people, and I'm sure they can design games that don't rely on gambling directed at children in the center of the game," Sen. Hawley told Kotaku in a recent interview. Today's introduction brings legislation on these issues one step closer to a reality. But similar legislation will also have to be introduced in the House and survive likely committee hearings and markups in both chambers before it can even get to a full vote by all legislators and potential signature by the president. "Certainly, the reception we have gotten from parents [and] from gamers has been absolutely tremendous," Hawley told Kotaku regarding the bill's prospects for passage. "I think it's an issue that more and more people are going to care about as they learn about it, and it'll be the start of a broader conversation." (Sen. Hawley has not responded to a request for comment from Ars Technica) Lobbying groups including as Focus on the Family, Common Sense Media, the Parents Television Council, and the Campaign for Commercial-Free Childhood offered support for the bill in a statement. The introduction of the act comes after Sen. Maggie Hassan (D-N.H.) separately urged the FTC to look into loot box regulation early last year. The FTC plans to convene a workshop on the issue later in 2019. Source: GOP, Dem Senators officially introduce loot box, “pay-to-win” legislation (Ars Technica)
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