FTC Wants Some Loot

Advertising Law

Loot boxes are the subject of an upcoming Federal Trade Commission (FTC) workshop, with stakeholders encouraged to take part in the discussion of the controversial in-game rewards gaining popularity in online games.

Purchased with real or virtual currency, loot boxes contain a random assortment of virtual “loot” to assist a player in advancing in the game. They also provide a significant income stream for game developers and have been the subject of recent criticism.

Last year, researchers at York St John University and the University of York released a study raising concerns about the impact of loot boxes on gamers, suggesting that regulation may be necessary given the findings that connected “problem gaming” habits and loot boxes.

In a recent lawsuit, a father accused Fortnite of employing manipulative techniques to push minors, like his son, into paying real-world money for loot boxes that turned out to be worthless.

Now, the FTC has scheduled a public workshop on August 7 to examine consumer protection issues related to loot boxes. “Inside the Game: Unlocking the Consumer Issues Surrounding Loot Boxes” will gather industry representatives, consumer advocates, trade associations, academics and government officials to discuss the marketing and use of loot boxes and other in-game purchases, as well as the potential behavioral impact of these virtual rewards on young consumers, the agency said.

Topics for the workshop include the in-game transaction landscape and research examining consumer behavior (including child and adolescent behavior) in the context of video and games. Discussion will also cover digital transactions and consumer awareness and education about in-game digital transactions, such as the mechanics, marketing and financial commitments associated with loot boxes.

To read more about the upcoming workshop, click here.

Why it matters: Public suggestions for discussion topics and participants will be accepted through June 7, the FTC announced, and written comments on the issues discussed at the workshop can be submitted until October 11.