Loot boxes were under intense scrutiny in 209, but it was only four years later that Europe decided to take action against them.
You’re not alone if you’ve ever looked at the gaming industry and thought that every AAA game has turned into a mini-casino. Even Europe noticed and called on its representative legislative body—the European Parliament—to knock on the European Commission’s door and address the issues affecting players and the gaming industry. These include exploitative microtransactions such as online gambling, loot boxes, subscriptions, and the lack of various protections for minors.
Loot boxes have been under intense scrutiny since 2019, and the governments worldwide that are taking note are increasing. Since then, we’ve seen significant steps forward across multiple jurisdictions in the form of court cases, new legislation, and draft bills being introduced.
Cracking Down On Predatory Practices
When 2023 started, the European Parliament voted to adopt new, standardized rules that offer better protection for gamers from microtransactions such as loot boxes. Spearheaded by MEP Adriana Maldonado López, the report had 577 in favor, 56 against, and 15 abstentions. The report has 16 recommendations, including implementing a set of rules that should provide consumers with clear information on the content of the video games they’re playing.
Another recommendation is to enshrine the Pan European Game Information—otherwise known as PEGI—age rating system in EU law. Currently, 38 countries use this system, but it’s not a legal requirement for all of them. The European Commission is requested to assess how loot boxes are sold and to take the necessary steps to “protect” consumers (minors in particular). Gold farming was also mentioned in the report, as it’s been associated with human rights violations and financial crimes.
Overall, the recommendations on the report are mostly consumer-focused, with the Commission tasked with gathering data on money spent and average time on games, including the socio-psychological effects.
Belgium and the Netherlands Take the Helm
Belgium’s one of the first countries in Europe to adopt a strict approach concerning loot boxes. The Belgian Gaming Commission published a report in 2018 that antagonized loot boxes, stating that these online purchases made with real-world money constitute gambling. The enforcement of a ban raised concerns, resulting in many major companies deciding to remove loot boxes from the local version of their games altogether or refraining from publishing their titles there, including Blizzard Entertainment’s Diablo Immortal.
Another country that used a strict approach was the Netherlands. A published study in 2018 by Gaming Authority revealed that four out of ten of the reviewed loot boxes contravened the law. Whenever the content of loot boxes is determined by RNG and the prizes you win can be traded outside of the game for cash, it offers a chance for people to sell or gamble on these items without a license.
Then, in November 2022, after the kerfuffle regarding EA’s FIFA games, the Netherlands Authority for Consumers and Markets proposed banning loot boxes in video games altogether. Considering that this happened not too long ago, we may see further developments regarding this in the near future.
Spain and Finland Compose A Draft
While countries like Belgium and Spain are pioneering the ban on loot boxes, Finland and Spain are just getting started. The Ministry of Consumer Affairs of the Spanish Government published a draft law on July 1, 2022, concerning regulating randomized reward mechanisms in video games. Of course, that includes loot boxes. The obligations and prohibitions include:
- Restrictions on related advertising of loot box ads
- The implementation of self-exclusion mechanisms, which would allow players to suspend loot boxes temporarily
- A ban on minors being able to access loot boxes by requiring age verification through the use of biometric analysis systems
- Adding more information concerning the probability of a consumer winning items via RNG
Should publishers not comply with the new law, authorities can impose sanctions of up to €3 million and suspend their services. Should everything be smooth sailing, we could see this regulation come into force in January 2024.
Meanwhile, a member of the Finnish Parliament proposed a bill in September 2022 to mark loot boxes as a form of gambling. This would be done by amending the Lotteries Act, which would consider purchasing loot boxes as gambling—even if the said prizes don’t have any monetary value and can only be used in-game. However, since the legislative process will take some time, it will be a long wait before we see the outcome.
Lawmakers Need to Catch Up
Loot boxes are an old trend at this point, as developers have primarily transitioned to battle pass systems to receive recurring payments. Sadly, the law moves slower than how technology progresses. If the lawmakers don’t catch up, they’ll be stuck in this unending race against publishers prioritizing profits above all else.