The global video games market was worth approximately 71 billion U.S. dollars in 2015 and by the end of 2020 its value is expected to exceed 90 billion.
It comes to no surprise that the rise in the “free-to-play” (FTP) monetization model with the added bonus of microtransactions & loot-boxes have contributed to the recent boom, however this sudden increase might just take a big hit after global gambling regulators around the world join together to voice their concerns about if loot boxes, skin betting and other similar practices violate their gambling laws.
After the big Star Wars Battlefront II loot box controversy received mainstream attention many countries have been receiving more and more complaints from consumers and concerned parents feeling their children have been victimised by these types of tactics, which has in-turn got the attention of gambling regulators to investigate further.
Now fifteen gambling regulators across Europe, as well as the Washington State gambling commission have to joined together to release a declaration on September 17 expressing their concerns on what they call “blurring the line between gambling and gaming” in their statements they wrote;
“We are increasingly concerned with the risks being posed by the blurring of lines between gambling and other forms of digital entertainment such as video gaming. Concerns in this area have manifested themselves in controversies relating to skin betting, loot boxes, social casino gaming and the use of gambling themed content within video games available to children.”
They compared some of the characteristics to online gambling and went on to say;
“We commit ourselves today to working together to thoroughly analyse the characteristics of video games and social gaming. This common action will enable an informed dialogue with the video games and social gaming industries to ensure the appropriate and efficient implementation of our national laws and regulations.”
Also issuing a slight warning to video game publishers;
“to engage with [gambling] regulatory authorities to develop possible solutions.”
Read the full declaration here;
This could cause a few problems for some of big gaming publishers where loot boxes and microtransactions represent majority of their revenue in games like FIFA, NBA 2K & Clash Royale just to name a very few. This isn’t exclusive to just loot boxes either as their also looking at 3rd party sites like “Skin betting`’ & “Social casino gaming”
Countries like Belgium and the Netherlands have already decided loot boxes violate their national gambling laws and have declared the business model illegal in April 2018 leading publishers like Blizzard, 2K Games and Bandai Namco to change or remove the loot box system entirely from their games. EA on the other hand has resisted the ruling in Belgium and could be headed to court. Apple has also made some changes now requiring that any apps on the App Store that offer loot boxes must disclose the odds of the likelihood of players getting different types of items.
The change comes from Apple’s official developer guidelines, which now state that “Apps offering ‘loot boxes’ or other mechanisms that provide randomized virtual items for purchase must disclose the odds of receiving each type of item to customers prior to purchase.”
Only time will tell on how much further this will go, a wide scale ban will completely change the free-to-play monetization model we’re all so use to for better or worse but the industry is not new to government meddling, in the early 90s the US government started investigating video games with violent & mature content which promptly got developers and publishers forming their own rating board (ESRB) in attempt regulate themselves before government involvement, maybe something similar will happen again.