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Loot Boxes and the Law.

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National Law Review

 

The Legality of Loot Boxes: A Primer

Tuesday, December 1, 2020

What is a Loot Box?

Loot boxes are virtual items that may be redeemed to receive a randomized selection of additional virtual items. In some instances, they are free. In others, loot boxes can be a lucrative monetization mechanic. These random sets of virtual items can range from aesthetic items, which make something in the game look good (e.g., a visual customization for a player’s avatar or weapons), to functional items that improve in-game performance (e.g., weapons, power-ups, powers, etc.). Loot boxes can be “accessed” in a variety of ways, such as by earning access via game play or purchasing a “key” using virtual currency or real money to unlock the loot box.

Legal Considerations with Loot Boxes

With the proliferation of loot boxes over the past 15 years, the use of them in games has received increased attention from legislators, regulators and the plaintiffs’ bar. The primary legal issue is whether a loot box mechanic constitutes gambling. Other issues include whether the age rating of games with loot box mechanics should be impacted based on the inclusion of the game mechanic, and whether consumer protection laws require disclosure of the odds of obtaining certain virtual items through loot boxes. Some of these key issues are discussed below.

Gambling. There is a great debate about whether loot boxes constitute gambling. The gambling laws vary by country, and in the United States, by state as well. In the US, few if any laws specifically address gambling based on virtual items. At a high-level, an overly simplified definition of gambling involves: staking something of value (consideration) for a chance to win something of value (a prize). If all three elements are present in an activity (prize, chance, and consideration), it may be gambling.

Impact on Children. Content ratings typically indicate the appropriate age group for and type of content included in a video game. Some advocate that even if loot box mechanics are not gambling, they have an addictive effect and therefore this should be reflected in the games rating. Some commenters have suggested modifying the ESRB rating for games with loot boxes, for example by rating all such games as Mature or Adult Only, or by creating a new rating.

Disclosure Considerations

• Disclosure of Loot Box Odds. Currently, Apple and Google require all mobile apps that have loot boxes to disclose odds. By the end of 2020, Nintendo and similar companies manufacturing consoles are supposed to require disclosure of loot box odds for new games and existing games that add new loot box features. Many major game publishers have also committed to disclosing loot box odds by the end of 2020. Disclosure of loot box odds must be accurate and non-misleading to avoid a FTC Act Section 5 violation.

• In-Game Purchase Disclosures. In April 2020, the ESRB announced a new “Interactive Element”—used to describe disclosures for video games that highlight a game’s interactive or online features that may be of interest but do not influence a game’s rating. The “In-Game Purchases (Includes Random Items)” disclosure sits just below a game’s content rating assigned to any game that contains in-game offers to purchase digital goods or premiums with real world currency (or with virtual coins or other forms of in-game currency that can be purchased with real world currency) for which the player doesn’t know prior to purchase the specific digital goods or premiums they will be receiving (e.g., loot boxes, item packs, mystery awards).

• Content Creator Disclosures. With the rise of avid video game players livestreaming gameplay to followers, these players are reminded of the need to follow FTC Endorsement Guidelines. These guidelines require, among other things, disclosure of any material connections between the players and the products they are touting, such as compensation agreements.

Increasing Litigation from Consumers

The legality of loot boxes may be challenged through a variety of paths. For example, state attorneys general may bring criminal or civil actions, or aggrieved consumers may bring challenges directly under most states’ anti-gambling laws. Even if loot boxes are presumptively legal and do not constitute gambling under applicable law, consumers may bring lawsuits based on consumer protection or false advertising laws if they believe that the loot boxes are promoted in an arguably misleading way.

Several class action lawsuits have been brought recently in California against game developers, game publishers, and distributors of games. While some of the lawsuits have alleged violations of unfair competition laws by engaging in an “unlawful” business under the states’ gambling law, other cases claimed that the defendant misrepresented its marketing and selling of the loot box. We discussed one of those lawsuits in this post.

Regulatory Attention

Various federal, state, and foreign officials, have proposed regulating loot boxes. In 2018, state legislatures in at least four states (California, Hawaii, Minnesota, and Washington) introduced bills aimed at regulating loot box sales. All failed to pass. At the federal level, the most notable effort to restrict loot boxes was “The Protecting Children from Abusive Games Act,” a 2019 bill introduced by Sen. Josh Hawley aimed at prohibiting loot boxes in any game played by minors (which we covered here). In August 2020, the FTC released a staff perspective paper in response to the workshop held a year prior in 2019 about loot boxes and microtransactions. The FTC paper summarizes key concerns from panelists and commenters about how loot boxes function, as well as recommendations to address the concerns.

There is no consistent approach internationally either, although many EU member states have released position papers within the last few years.

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Its gambling. And treated as such.

I have made my purchases and enjoyed what i received. Sold what I did not want for credits or something else.

 

Now.

The bigger issue is the game design. In the casino of big time gambling you have numberous Audio and visual feedback that stimulates your brain's Pleasure center upon winning something. And the background does not have clocks or anything of the real world inside the front door. There is a constant hum and sounds applied to the player that is a form of hypnosis. And you will see them sitting like statues at the slot machine emptying a cup of coins like a auto bot. coin, pull coin pull coin pull small winnings disregarded.

The video game design with micro transactions started some years ago. And then evolved. Smart Phones gaming specifically. I am desktop online gaming and in Wows there is always a few ships I would like to own someday because they cannot be acquired with any amount of dollars to doubloons or any steel or gold. So it must be a lockbox.

Thats why so many people spend say hundreds to try and get that particular ship whatever it is. If you open enough lockboxes theoretically you will finally have your ship in the end.
While Wows walk to the bank laughing at your expenditure of money. Spending like a drunken sailor you did. This year is different. The Marakov issue and the information about the Short list which really corralled many players not being able to get any of the better premium ships at any amount of boxes. You would have to own all fo the ships on the short list, long list and hundreds more before you start getting maybe one of the unavailable ship like the Jean Bart. Normally I would not pay attention to the JB but I acquired the JB B in the Black Friday crates and then find out there is missions for doubloons that are useful for once. But you need the original JB. You will not be able to buy it at any price.

 

But you can spend a thousand dollars feverishly opening loot boxes until you have that goddamn Jeanbart.

Nice huh? Dangle a hook, bait it and then give a suggestion that you need something that is impossible to get. In so trying you seriously enrich the cash flow into Wows and WG etc. They are going to the bank laughing. Christmas indeed. Not for us Americans this winter. I hope you enjoyed your lockboxes this month.

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Commanders,

We've received a lot of questions and comments regarding 2020 Santa Containers, and we would like to clarify the situation. 

As some of you noticed, certain ships in the containers have much higher drop rates than others. Santa Containers have worked like this since the very beginning, and until 2018 we even mentioned that peculiarity in the items description. After 2018 it was not present in the description anymore, as it was deemed excessive to the already detailed description.

We're sorry that some of you are left disappointed by the Santa Containers this year. We know this is something that a lot of our players look forward to and the last thing we want is to see you upset approaching holiday season. Thus, we will do the following:

  • We will work on improving the next Santa event with the feedback and concerns you voiced.
  • Until Sunday, Dec 13, any player is eligible for a one-time refund request for the Santa Crates they purchased. Please refer to Customer Support if you would like to have a refund, and please note, in order to prevent longer queue times, all purchases you want to refund should be in one request. The refunds will be handled according to the normal procedure – the goods from the containers should still be on your account, otherwise, Customer Support will have to do a roll-back to restore them and process the refund.

Regardless of whether you were considering Santa Containers at all, we hope you will enjoy all of the holiday activities and gifts this year – stay tuned for more news on the upcoming celebration.

Thank you, good luck, and fair seas.

World of Warships team

 

https://forum.worldofwarships.com/topic/230805-santa-crates/

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