Amid mounting pressure to do something about loot boxes, the Entertainment Software Rating Board will soon slap a label on any game that features in-game purchases.
The Board said the label will be placed on any game that features any kind of DLC, microtransaction, or loot box. So, it seems likely the label will appear on pretty much every modern game in existence that gets a retail release.
The Entertainment Software Rating Board (ESRB) was created in 1994 by the Entertainment Software Association, the video game industry’s trade group. It controls game ratings in the United States.
"You may have noticed that we’ve been a little quiet on the topic of in-game purchases and loot boxes, but we’ve been listening," said the ESRB.
"We’ve been working to develop a sensible approach to let gamers and parents know when a game offers the option to purchase additional content."
The ESRB has also set up a website that explains how to set up parental controls on common gaming devices.
"This is the first step of many!" it said.
"We’ll continue to discuss how to further enhance our rating system with publishers, developers, gamers and especially parents, and we’ll continue to make adjustments as the need arises."
ESRB president Patricia Vance told reporters that the Board felt the labels were an effective response to loot boxes, but also that it was just a first step.
"We are going to continue to look at this issue and determine if there are additional measures or guidelines to put in place," she said.
"This obviously an issue of concern to the gamer community.”
The ESRB didn't target loot boxes in particular because "a large majority of parents don’t know what a loot box is", said Vance.
"It’s important for us not to harp on loot boxes, per se," she said.
"When we did describe what a loot box is to parents, we found their primary concern by fair is their child spending money. This initiative [parentaltools.org] we’re launching is focusing on that, which we also think is an effective approach to managing loot boxes specifically."
The ESRB did not received any opposition from publishers over either the website or labelling initiatives.
Last October, the ESRB said it does not consider loot boxes to be gambling. Today, Vance expanded on that statement.
"We tried to find research on that," she said, “but we were unable to find any evidence that children were specifically impacted by loot boxes, or that they were leading them toward some tendency to gambling.
"We truly don’t know of any evidence supporting those claims. We continue to believe loot boxes are a fun way to acquire virtual items; most of them are cosmetic."
Vance then stressed that loot box items can often be earned without a purchase, but either way, "they’re always optional".
The ESRB's move comes after many politicians have spoken out against loot boxes.
Earlier this month, US Senator Maggie Hassan sent an open letter to the ESRB to examine whether games with loot boxes are being marketed "in an ethical and transparent way that adequately protects the developing minds of young children from predatory practices".
Hassan suggested that the Federal Trade Commission might need to get involved if the game industry does not take action.
Today, the ESRB responded to Hassan.
"I think it is important to clarify that these purchases are always optional, are often awarded at no cost to the player, can be acquired using virtual currency that can be earned through gameplay and/or purchased, and are never required to complete the game," it said.
"The ESRB has previously stated publicly that we do not consider loot boxes to be gambling for various reasons, nor am I aware of any legal authority in the United States that has classified loot boxes as gambling. In fact, the UK Gambling Commission recently determined that loot boxes do not constitute gambling.
"We believe that loot boxes are more comparable to baseball cards, where there is an element of surprise and you always get something," it added.
"Loot boxes are an optional feature in certain games that provide the player a fun way to acquire virtual items for use within the game itself. Most of the time, these items are cosmetic in nature. They are sometimes earned as an award to the player; other times they can be purchased. But at all times, they are optional. Additionally, there is no way to cash out in the game; the player can only use the item to customize game play experience."
Loot boxes have been a source of debate in the industry for some time, but attracted the attention of politicians after they were pulled from Star Wars Battlefront II amid massive fan backlash.
It seems that in general, they can't be regulated by current gambling laws, but there's a feeling among some that there needs to be greater regulation in place to protect children and vulnerable adults. It also seems that politicians aren't aware that you can indeed "cash out" your winnings from loot boxes using third-party sites.
Last December, New Zealand's Department of Internal Affairs said loot boxes were not gambling.
Belgium’s Gaming Commission is a rare government agency that has said loot boxes are gambling, and that it wants to ban them.
Australian government agencies are split on the issue.
The Australian Communications Media Authority, an independent body that regulates and oversees many things including the Interactive Gambling Act, does not believe loot boxes constitute gambling under the Interactive Gambling Act, but it is keeping an eye on things nonetheless.
The Victorian Commission for Gambling and Liquor Regulation (VCGLR) disagrees.
"What occurs with "loot boxes" does constitute gambling by the definition of the Victorian Legislation," said VCGLR analyst Jarrod Wolfe.
"Unfortunately where the complexity arises is in jurisdiction and our powers to investigate.
"Legislation has not moved as quick as the technology; at both State and Federal level we are not necessarily equipped to determine the legality of these practices in lieu of the fact the entities responsible are overseas."
Meanwhile, Queensland's statutory regulator said loot boxes would not fall within the meaning of a gaming machine as defined under the Gaming Machine Act.
Elsewhere, the UK Gambling Commission said that loot boxes are only gambling if the player has an ability to "cash out".