In Uncategorized

Video games can be a gateway to problem gambling, the Federal Trade Commission was warned Wednesday.

The danger comes from a feature that has become embedded in a majority of the most popular video games in recent years: loot boxes, according to experts who spoke in an all-day seminar held by the agency.

A loot box is a virtual box a player can buy in a game with real or pretend money with the potential for getting virtual weapons and other aids to help the chances of winning  the game or the ability to customize characters.

The payments are made through “microtransactions.” The name can hide the true financial hit on a child or other video game player because while a single loot box can cost 99 cents, repeated purchases or buying a bundles or bundles can go into thousands of dollars over time.

For some players the lure of loot boxes is a pathway to problem gambling with young men and boys particularly at risk, cautioned National Association On Problem Gambling Executive Director Keith Whyte.

Young veterans and active duty members of the military are also viewed as vulnerable. On average they show at least twice the rate of gambling problems as civilians since they have high rates of risky behavior, said Whyte.

“Of concern are the possible negative effects of loot video games with loot boxes on veterans seeking treatment for a variety of behavioral health issues, especially those with Post Traumatic Stress Disorder  (PTSD),” the expert said.

He pointed out gambling addiction can trigger financial harm, emotional difficulties, poor work or school performance, poor mental and physical health, depression, substance abuse and suicidal behavior.

“Every study we are aware of has found an association between loot boxes and gambling problems,” Whyte asserted.

In an analogy, he noted many of the features of loot boxes are similar to those in slot machines.

Whyte said a portion of video game company loot box revenue must be set aside in a public health trust fund or other independent vehicle for robust prevention of problem gambling education, treatment, recovery and research services.

The pressure on video game companies to maximize revenue through loot boxes and other means has soared as the cost of creating and running the entertainments with life-like action and graphics is in the ballpark of popular movies.

Hit video games like Red Dead Redemption 2 and Call of Duty Black: Black Ops 4 can cost their makers the $100 million to $250 million to put blockbuster flicks such as those in the Avengers series on the screen.

National Consumers League Fraud Vice President John Breyault called loot boxes “predatory.”

He cited research by the Society for the Study of Addiction that criticized the in-game purchasing system or loot boxes for disguising and withholding the true long-term costs for the players until they are financially and psychologically committed.

One way this can happen is when a maker offers a video game for free but only discloses to a player who has used it numerous times that the coolest features will mean spending money, explained Jeff Haynes, senior editor of video games and websites for Common Sense Media, which publishes reviews on the kid suitability of games, books, movies and other media.

Loot boxes have the danger of getting people who were cured of gambling problems addicted again, wrote a commenter to the FTC’s announcement of the seminar who said he fell into the trap.

“My addiction was slot machines, which is regulated in my country. And after years addicted, I got free, and became gambling free. The loot boxes started it all over again. It has exactly the same dopamine trigger, and the same programing of a slot machine. The cool colours, and sound effect please the addicted,” wrote Mo Kalifi.

Another respondent to the FTC hearing announcement stressed the danger of loot boxes to children.

“As a gamer let me tell you, loot boxes have gotten out of control in the last 3-5 years. Gaming companies have time and time again expanded loot box systems, made them more predatory, and even done what they could to specifically target children with them,” wrote a commenter, Andrew Liebmann.

On the same day of the workshop, the Entertainment Software Association announced three dominant video game makers—- Sony Interactive Entertainment, operator of the PlayStation platform; Microsoft, operator of Xbox; and Nintendo, operator of the Nintendo Switch gaming platform—-have agreed to try to address a concern of the consumer activists by disclosing the odds a player can get what he or she wants by buying a loot box and the rarity of the items in the containers.

Patricia Vance, president of the Entertainment Software Rating Board, a video game industry trade group, applauded the move.

“Self-regulation has worked very well. We have done a lot in the last 25 years, said Vance.

She noted seven out of 10 parents prohibit their kids from spending money on loot boxes.

The newly announced disclosures likely to be very helpful for video game users and their parents because the listing of an “odds” could be as broad as from 5 percent to 60 percent, said Common Sense Media Senior Policy and Privacy Counsel Ariel Fox Johnson.

Whyte also doubted the value.

“Some people like long odds. It’s part of the thrill, part of the addiction,” said the problem gambling expert.

He said what could help limit the danger of loot boxes would be for video game makers who have impressive skills at creating entertaining, compelling content, to employ those skills in providing direction and disclosures for users.

The National Council on Problem Gambling will be coming out with a website soon to help parents concerned the negative consequences of their children’s online video gaming and for the youngsters themselves: www.responsibleplay.org

The site will include self-tests to see it loot boxes are propelling them into problem gambling and links to organizations providing gambling addiction aids.

Personal Finance

I cover financial regulatory issue, cybersecurity, fintech & bitcoin.
Recent Posts
Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.