If This New Video Game Loot Box Bill Becomes Law, It Could Shake Up The Industry

[UPDATE] A spokesperson for the Entertainment Software Association told GI.biz that providing "greater awareness and transparency about the wide range of in-game experiences" is a never-ending job. The organisation added that it believes self-regulation is the right way forward as opposed to regulations from the government.

"We strongly believe that the industry's robust, self-regulatory efforts remain the most effective way to address these important issues, and that system has a proven and long record of doing so," the representative said.

"Some consumers and parents may have questions about how loot boxes work, and ESA has demonstrated a commitment to providing information to guide consumers, especially parents, in their purchase decisions."

The original story is below.

Lawmakers in Hawaii have put forth a pair of bills that, if enacted, would limit the sale of video games with "gambling mechanisms" to minors and require that loot box odds be disclosed. The bills were introduced into Hawaii's legislature recently by Democrat Chris Lee, who you may remember was the politician who called out Star Wars: Battlefront II for being "predatory."

The first bill is HB2686. It states that video game publishers have recently begun to use "predatory mechanisms" in their games that are "designed to exploit human psychology to compel players to keep spending money in the same way casino games are designed." It goes on to say that things like loot boxes--which are popular and prevalent in games today--are similar to slot machines because they let users pay money for a chance at winning something.

"One common variety of this type of predatory mechanism, known as a loot box, can present the same psychology, addictive, and financial risks as gambling," reads a line from the bill. The document goes on to note that digital stores exist where players can sell the items they acquired through loot boxes and other "gambling-like mechanisms." In turn, this gives players the ability to "effectively cash out their winnings," as they might in a casino, the author wrote.

HB2686 goes on to reference the World Health Organisation's recent announcement that "gaming disorder" is a real mental condition that requires more clinical research. "Mental health experts have raised particular concern about the exposure of youth and young adults to gambling-like mechanisms, which can affect cognitive development and lead to addiction, and to which youth and young adults are particularly vulnerable," reads a line from the bill.

This bill's main focus is to prohibit the sale of video games that include a "system of further purchasing, including randomised reward or a virtual item that can be redeemed to directly or indirectly receive a randomised reward," to people under the age of 21.

The other bill, HB2727, includes much of the same text as HB2686, but it goes further to say that video games with loot boxes should be required to making "certain disclosure[s]" about the odds that players will receive a certain item. More, specifically, this disclosure must be featured "prominently" at the time of purchase and in the game itself when loot boxes appear. If this bill becomes a law, Hawaii's Department of Commerce and Consumer Affairs, potentially in conjunction with a third-party, may conduct audits on video games sold in Hawaii to ensure that accurate probability rates are disclosed clearly and transparently.

Both bills note that it is not uncommon for video games to get frequent updates after release. However, HB2727 states that "no video game publisher shall at any time modify a game to contain or otherwise permit the inclusion of additional content for which the game was not appropriately labeled at the time of original sale."

In the United States and most other parts of the world, video games generally do not disclose things like loot box odds, though regulators in China recently started enforcing this.

Bear in mind that these bills, if they become law, would only apply to games and gamers in Hawaii, whose population is only around 1.4 million. That being said, lawmakers from other states, such as Washington, have also put forth bills with similar language. Lee told GameSpot in an interview that it will be a combined effort to enact the kind of change he wants to see. Already, Lee tells us that he has seen bipartisan support for these efforts. More significantly, he said other elected officials across the country, including US Senators and members of Congress, have reached out to voice their support.

Battlefront II sold many millions of copies, but it failed to meet EA's sales expectations, a failure that the publisher attributed in part to the controversy over the game's use of mictrotransactions. Just before the game's public launch, EA removed all microtransactions from the game, but they are coming back soon.

If the new bills introduced in Hawaii and Washington, as well as other parts of the country and world, become law, it could significantly impact the world's biggest publishers such as EA, Activision, Take-Two, and others. Just recently, we learned that Activision Blizzard made $4 billion from microtransactions in 2017, while Ubisoft makes lots of money from add-on content as well. Not all of this money comes from loot boxes or what Lee and others might call "predatory" mechanics, but a portion does. So it stands to reason that these companies, and organisations that represent them in Washington--such as the ESA--would want to protect their interests. This is all to say, this is a story that we don't imagine will fade away anytime soon, but will rather pick up steam and debate in the days, weeks, and months ahead.

We will have more from our interview with Lee in the days ahead. Keep checking back with GameSpot for the latest.