Are Slot Machines Invading Your Home? Mobilize the Regulators
The video game industry has faced a lot of backlash recently. If you listen closely you might be able to hear an ongoing cacophony that can only be described as the world’s largest simultaneous rage quit. Mountain Dew and Adderall fueled screams of frustration coupled with the occasional video game controller being thrown across the room has become the norm lately as gamers have grown increasingly frustrated with microtransactions in the video game industry’s biggest new releases.1
Downloadable content, or DLC, is additional content made available after a game’s initial release.2 DLC has become common for many video game titles since high speed internet capabilities allowed online gameplay to become a mainstay in people’s homes,3 but normally the premium content could be purchased as a luxury, for extra levels or objectives to play or equippable outfits or gear that allowed for additional character customization.4 The premium content could be avoided just as easily without diminishing the enjoyment of the $60 game. Recent releases, however, have employed a much detested “pay to win” model, where buyable content allows a player to gain a competitive advantage over someone who would rather achieve unlockable content by progressing through gameplay.5 “[Players] could spend a huge number of hours collecting in-game credits to unlock new features and cooler characters, or pay real money to get them instantly.”6 Some of the season’s most highly anticipated titles have faced criticism for employing this model, such as Middle-earth: Shadow of War, Forza Motorsport 7, NBA 2K18, Assassin’s Creed Origins, and Star Wars Battlefront II. 7 The model has been typically used in free to download mobile games,8 but consumers are understandably angry that they are being strong-armed into paying more for a game that they already paid for upfront.
Consumer backlash may not be all that video game developers have to worry about, as legislators and investigators in the U.K. and Belgium respectively have begun to look into whether a loot box reward system may constitute gambling.9 A video game loot box is a “consumable virtual item which can be redeemed to receive a randomised selection of further virtual items.”10 Loot boxes may be given out as promotions to attract players, rewards for leveling up a player, or may be purchased with real money and can be redeemed for a random selection of items of different rarity and value to the gamer.11 The United States is unlikely to be far behind in questioning the legality of these practices, as courts faced a similar question in 2016 regarding betting exclusively virtual items on the outcome of e-sports competitions, known as skin gambling.12
Whether or not a venture is gambling in the United States usually depends on three elements, a prize is offered, consideration is given for the opportunity to participate, and the recipient is determined by chance.13 Although there may be interesting legal questions as to whether the elements of consideration and prize are met, the gaming industry has thus far rested its defense on chance.
The Entertainment Software Rating Board issued a statement explaining why they don’t believe that loot boxes constitute gambling.14 “ESRB does not consider loot boxes to be gambling. While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want).”15 The ESRB then likened it to purchasing a pack of collectible cards, where you may receive something new and rare or you may get a duplicate of a card you have already, but you always get something.16 Electronic Arts, a major developer, said something similar: “The crate mechanics of Star Wars Battlefront II are not gambling. A player’s ability to succeed in the game is not dependent on purchasing crates . . . [and] players are always guaranteed to receive content that can be used in game.”17
While these arguments might be sufficient to prevail legally, it may not be enough to keep concerned citizens and legislators at bay. Critics care less about the mechanics of the system and more about the characteristics it shares with the hallmarks of gambling and casinos.18 A number of different games share a recognizeable “carefully designed formula of animations and sound effects work their magic to create a great sense of anticipation,”19 not unlike a slot machine, working off of the idea that a “randomised system of reward [in gaming] is the one that creates the most addiction.”20 When it comes to your brain’s regulation of dopamine, it doesn’t discriminate between the opening of loot box and the pulling of a slot machine lever, but the greater concern with gaming is that children and adolescents are in the most danger of adopting these addictive behaviors.21 Why should a system that developers admit is designed to be attractive and manipulative22 be treated differently from gambling, when the end result with the consumer is precisely the same?23
Many think it should not matter much whether it satisfies the current definition of gambling, when the system is designed to feed the addictive habits that so many people have in the same way that gambling does. If the game developers continue to roll out these manipulative models to pump their players for cash, they may face more than just consumer backlash. It is an easy step for legislators to think that if it looks like gambling, sounds like gambling, and manipulates our physiological behaviors like gambling, it should be regulated just as much as gambling.
See, e.g., Jethro Mullen & Ivana Kottasová, Star Wars Video Game Maker Apologizes After Uproar from Fans, CNN Money (Nov. 17, 2017), http://money.cnn.com/2017/11/16/technology/battlefront-ii-star-wars-game-ea-costs/index.html [https://perma.cc/Y6WR-5UMB].↩
See Jeffrey Cook, From Expansion Packs to DLC: The Evolution of Additional Video Game Content, The Artifice (Oct. 2, 2016) https://the-artifice.com/expansion-packs-dlc-evolution-additional-video-game-content/ [https://perma.cc/X5NX-927Z].↩
See Mullen & Kottasová, supra note 1.↩
See Allegra Frank, OpenCritic Joins the Loot Box Backlash, Polygon (Oct. 9, 2017), https://www.polygon.com/2017/10/9/16447682/opencritic-microtransactions-backlash-loot-boxes-shadow-of-war [https://perma.cc/5TTT-R3JP].↩
Mullen & Kottasová, supra note 1.↩
Owen S. Good, U.K. Lawmaker Gets Involved in Loot-Box Controversy, Polygon (Oct. 15, 2017), https://www.polygon.com/2017/10/15/16478458/loot-box-microtransactions-legality-uk [https://perma.cc/QZ6N-7MF9]; Eddie Makuch, Battlefront 2, Overwatch Being Investigation By Gambling Authority In Belgium, Gamespot (Nov. 16, 2017), https://www.gamespot.com/articles/battlefront-2-overwatch-being-investigation-by-gam/1100-6454989/ [https://perma.cc/XW7T-NC9H].↩
See generally Joshua Brustein & Eben Novy-Williams, Virtual Weapons are Turning Teen Gamers into Serious Gamblers, Bloomberg (Apr. 20, 2016), https://www.bloomberg.com/features/2016-virtual-guns-counterstrike-gambling/ [https://perma.cc/2LN3-3LJG]; Ferguson Mitchell, The Rising Tide of Esports Regulation and Lawsuits, The eSports Observer, (Apr. 21, 2016) https://esportsobserver.com/rising-tide-esports-regulation-lawsuits/ [https://perma.cc/WW8A-J7Q6].↩
Stepnes v. Ritschel, 663 F.3d 952, 960 (8th Cir. 2011).↩
Erik Kain, The ESRB is Wrong About Loot Boxes and Gambling, Forbes (Oct. 12, 2017), https://www.forbes.com/sites/erikkain/2017/10/12/the-esrb-is-wrong-about-loot-boxes-and-gambling/#2869f4a52a64 [https://perma.cc/QX86-7J63].↩
Erik Kain, Why EA is Wrong to Say That ‘Star Wars: Battlefront II’ Loot Crates Aren’t Gambling, Forbes (Nov. 16, 2017), https://www.forbes.com/sites/erikkain/2017/11/16/why-ea-is-wrong-to-say-that-star-wars-battlefront-ii-loot-crates-arent-gambling/#2b1f9152d6c9 [https://perma.cc/68RD-Q3JF].↩
See Alex Avard, Video Games Have a Loot Box Fetish, and it’s Starting to Harm the Way We Play, GamesRadar (Oct. 10, 2017), http://www.gamesradar.com/loot-boxes-shadow-of-war/ [https://perma.cc/7MXX-XBTC].↩
See Kain, ESRB is Wrong, supra note 13.↩
”When you start opening a loot box, we want to build anticipation . . . [w]e do this in a lot of ways—animations, camera work, spinning plates, and sounds. We even build a little anticipation with the glow that emits from a loot box’s cracks before you open it.” Heather Alexandra, Loot Boxes are Designed to Exploit Us, Kotaku (Oct. 13, 2017), https://kotaku.com/loot-boxes-are-designed-to-exploit-us-1819457592 [https://perma.cc/FM9D-ENPH].↩
See id. The author describes her personal gambling addiction with the pay-to-win system, such as paying through iTunes gift cards to hide the charges on her credit card bill.↩