Connect with top gaming leaders in Los Angeles at GamesBeat Summit 2023 this May 22-23. Register here.
The Entertainment Software Ratings Board revealed a new form of self-regulation for video games today. In the “near future,” the ESRB will assign a warning label that will inform customers that a product contains “in-game purchases.” This indicator will apply to games at retail and on digital stores that include any form of purchasable bonus content, such as extra multiplayer maps, expansions, digital currency, and — yes — loot boxes.
Game industry critics are already pointing out that virtually every new game has in-game purchases, so this label will show up everywhere — and that might make it ineffective. But while the ESRB’s goal is to inform customers, it has always existed to help publishers avoid government regulation. To accomplish this, the organization needs to convince lawmakers that it is doing enough to protect consumers, but at the same time, it doesn’t want to promise too much. So the ESRB is haggling to get what it wants (no new laws) without making firm commitments to drastic changes (anything that costs money or limits the sale of loot boxes).
An update on in-game purchases from your friends at ESRB: pic.twitter.com/pqmfJe0Ywz
— ESRB (@ESRBRatings) February 27, 2018
“I’m not sure it makes much of a difference at the point-of-sale to prospective buyers,” IDC gaming research director Lewis Ward told GamesBeat. “If they like a game, they’re probably still going to get it. The real checks-and-balances, of course are all about what happens on the digital side.”
GamesBeat Summit 2023
Join the GamesBeat community in Los Angeles this May 22-23. You’ll hear from the brightest minds within the gaming industry to share their updates on the latest developments.
The GameDev Business Handbook author Michael Futter points out that it introduces yet another consideration for game makers.
“If a developer is releasing their game at retail, they’ll need to think all the way through the product life cycle,” Futter told GamesBeat. “If they release without the new label and decide later to add in-game purchases or DLC in any form, retail boxes will no longer accurately reflect game content. The boxes will need to be altered with stickers or new manufacturing will need to take place, otherwise the game could be pulled from sale.”
To avoid the headache of shipping out “In-Game Purchase” stickers to retailers around the United States, Futter thinks developers should just assume that they will have some form of additional spending in their game.
“But if every game carries the label, how valuable will it be in the long run?” said Futter.
So as a regulatory tool to protect consumers from what some people perceive as predatory business models, a label about in-game purchases won’t accomplish much. But by offering up this solution, the ESRB has come to the bargaining table.
In October, the ESRB dismissed any criticism and calls for regulation of loot boxes. The group said that it did not consider loot boxes gambling. ESRB president Patricia Vance said during a roudtable with reporters (via Kotaku) that it still doesn’t believe loot boxes are gambling.
“We certainly considered whether or not loot boxes would constitute as gambling,” said Vance. “We don’t believe it does. We think it’s a fun way to acquire virtual items for use within the game.”
While many people would disagree with Vance’s definition of “fun” (and I may agree with her), mounting public and government pressure has the ESRB shifting its approach to loot boxes. And as a division of the Entertainment Software Association, the lobbying group that represents a number of major gaming publishers in public-policy debates, the ESRB wants to do the minimum while letting game publishers operate unfettered.
So is this it? Does an “In-Game Purchases” label convince legislators in Hawaii and elsewhere that the gaming industry is on top of their loot-box-related concerns? Maybe, but I doubt it. Gamers are angry and mobilized, and many of them despise this business model. I expect them to remain loud while calling their representatives to pass a blanket ban on loot boxes or to classify them alongside slot machines as gambling.
If gamers do remain active in this debate, the ESRB could return with a different way of handling loot boxes. It might agree to force publishers to reveal the drop rates for certain items or to include a running total of how much money you’ve spent in a game. But since all the ESRB has to do is convince a few state senators that it is doing enough, it was never going to come out with comprehensive industry reform as its opening bid. It wants to see if it can get away with slapping a meaningless sticker on some boxes first.
GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.