As microtransactions morph into a multibillion-dollar industry, regulatory bodies worldwide are beginning to scrutinize their impact on consumers, particularly children. This push for consumer protection and regulation comes amidst concerns about practices such as ‘loot boxes’ which mirror gambling mechanisms.
In a significant move towards increased consumer protection, regulatory bodies worldwide are beginning to scrutinize the burgeoning world of in-game microtransactions. Dismissed frequently as mere perks for gaming aficionados, microtransactions have gradually morphed into a multibillion-dollar industry brimming with potential pitfalls for consumers, particularly minors.
Microtransactions, or MTX, are small, digital transactions within video games to purchase added features, upgrades, or other forms of enhancement to the play experience. Although they often start out as minuscule expenses, a number of players often end up collectively spending billions worldwide on these in-game extras, with some individuals even spiralling into excessive spending.
Reports indicate that the digital games industry was propelled to an estimated net worth of over $150 billion in 2020, with a significant portion of this revenue growth attributed to in-game microtransactions. While these figures can be counted as impressive business achievements, they also signal the staggering depths of consumers’ pockets that game companies are reaching into. It’s worth noting how transformative in-game microtransactions have become for publishers. Pioneered by free-to-play games and mobile gaming platforms, they’re now a commonality even among premium, full-priced titles.
The lack of protection and regulation in this regard has been a long-standing issue, sparking concern among parents, gamers, and advocates for responsible gaming. The most contentious form of microtransaction is the ‘loot box’, a virtual grab bag offering randomized rewards, sometimes advantageous in gameplay, in exchange for real-world money. There’s a rising furor over the view that loot boxes mirror gambling mechanisms and that they are increasingly targeted and accessible to children. Countries like Belgium and the Netherlands have already outlawed them citing the breach of their gambling laws.
In response to these concerns, regulatory bodies have surfaced with renewed intentions of protecting the consumer. The United Kingdom, for instance, opened an official inquiry into the games industry’s use of loot boxes under their gambling laws last year following a report from the Digital, Culture, Media, and Sport Committee that deemed these practices deserve further investigation. The investigation continues with the possible repercussions likely to be influential on a global scale.
In the United States, following petitions by consumer rights activists, legislative action is beginning to gain traction against predatory microtransactions. Already, bills such as the Protecting Children from Abusive Games Act have been introduced, which aims to prohibit manipulative design in video games available to children. Although the bill awaits approval, it signals a positive stride towards necessary regulation.
The Entertainment Software Rating Board (ESRB), a self-regulatory organization for the video game industry in the United States, has also adopted a system to highlight games containing in-game purchases to parents and consumers. While this step is by no means a solution to the issue, it provides a degree of transparency that was previously absent.
Concurrently, developers and gaming companies are being nudged to take proactive action. Epic Games, known for Fortnite, and Electronic Arts (EA), known for FIFA and Battlefield, have begun disclosing odds for loot boxes, providing gamers a clearer understanding of what they are potentially purchasing.
It’s clear that the condemnation of predatory microtransactions is not conceived out of a desire to strip the gaming industry of its profit. Instead, it’s about ensuring fair play and protecting consumers – especially those most vulnerable to exploitation. The demanding call for improved guidelines and legislative measures is paving the way for a future where microtransactions are a choice rather than a compulsion in the gaming world.
While the course is far from run and emerging technologies will always present new challenges, these actions are timely and crucial. The focus now is on shaping a framework that will sacrifice neither consumer enjoyment nor protection. The hope is for the establishment of a well-regulated gaming marketplace, where consumer trust is paramount and where the industry can continue to thrive sustainably.
Sources:
1. Statista, “Digital Market Outlook: Video Games Revenue Worldwide”, 2020
2. UK Parliament, “Immersive and addictive technologies inquiry”, 2019
3. Protecting Children from Abusive Games Act, 2019
4. Entertainment Software Rating Board, “ESRB to Begin Assigning an In-Game Purchases Label”, 2019
5. Fortnite Loot Box and Microtransaction Policy Update, Epic Games, 2019
6. Electronic Arts, “Player-first experiences in EA’s Games”, 2019
