Illinois House Approves Adding Warnings To Video Games That Include ‘Loot Boxes’

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“Loot boxes” are randomized digital items that either improve a player’s gameplay, like unlocking weapons, or alter a player’s aesthetics. A proposal moving through the Illinois General Assembly would require video game developers to warn players of the financial and psychological risks of a particular in-game microtransaction — “loot boxes”.

However, State Rep. Barabara Hernandez (D-Aurora) believes many younger players may not realize the virtual currency they use to purchase additional content like loot boxes are tied to real money, and as a result kids can run up substantial bills. The message would appear each time before a player purchases a loot box.

Attention Parents: A Loot Box System exists in this game that permits an unlimited amount of REAL MONEY to be spent without any age restriction. REAL MONEY is exchanged for random digital items. This process has been linked to REAL LIFE GAMBLING ADDICTIONS in both children and adults. Please regulate your own spending as well as your children’s spending. Industry Response

Hernandez has proposed adding a warning label about loot boxes to both physical video games purchased at brick-and mortar stores and video games bought on online marketplaces or smartphone app stores. The label would read: “Sometimes the parents are not aware of this and they get charged more than a hundred [dollars]…or sometimes thousands of dollars,” Hernandez said.

In a staff-perspective report released last August, the FTC detailed the suggestions of individual panelists who called on distributors to self-regulate and clearly disclose to players the exchange rates between real money and virtual money and the probability of winning valuable prizes. In August 2019, the Federal Trade Commission held a panel discussion on the rise of random prize options and other microtransactions in video games and whether these practices were deceptive.

Tara Ryan, Vice President of State Government Affairs at the Entertainment Software Association — a video gaming trade association that represents major distributors like Activision Blizzard, Bethesda, Capcom, Electronic Arts, and Epic Games — said the proposed Illinois-specific warning label is unnecessary and a solution in search of a problem. Unlike Hernandez’s proposal, the ESRB warning does not appear multiple times in-game and does not reference a player’s tendency to become addicted, only that items purchased from loot boxes are random. Last April, the Entertainment Software Rating Board — a “non-profit, self-regulatory body that assigns age and content ratings for video games” such as “E” for everyone and “M” for mature — added warning labels to games that incorporate loot boxes.

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