"Social media and video games prey on user addiction, siphoning our kids' attention from the real world and extracting profits from fostering compulsive habits."
Senator Josh Hawley, R-Mo., is introducing legislation that seeks to ban exploitative video game industry practices that target children like loot boxes and pay-to-win, he announced on Wednesday.
"Social media and video games prey on user addiction, siphoning our kids' attention from the real world and extracting profits from fostering compulsive habits. No matter this business model's advantages to the tech industry, one thing is clear: there is no excuse for exploiting children through such practices," Sen. Hawley said.
"When a game is designed for kids, game developers shouldn't be allowed to monetize addiction. And when kids play games designed for adults, they should be walled off from compulsive microtransactions. Game developers who knowingly exploit children should face legal consequences."
Loot boxes are in-game treasure chests that contain random items. They're typically purchased using in-game currency or real-world money and they've become a common sight in online video games in the last few years, generating millions in profit for publishers.
But some critics fear they're too much like gambling and are exploitative. Some countries, like Belgium and the Netherlands, have already taken legal action and forced publishers to modify or remove loot boxes from their games.
The Entertainment Software Association (ESA) pointed out in a statement to Variety on Wednesday that many other countries don't see the harm in them.
"Numerous countries, including Ireland, Germany, Sweden, Denmark, Australia, New Zealand, and the United Kingdom, determined that loot boxes do not constitute gambling," said Stanley Pierre-Louis, acting president and CEO of the ESA.
Sen. Hawley's proposed bill is called the Protecting Children From Abusive Games Act. If it passes, it will apply new consumer protections to games targeted at children under the age of 18. It will define what those games are by using subject matter, visual content, and other indicators similar to those used to determine applicability of the Children's Online Privacy Protection Act (COPPA).
The protections will also apply to games with a wider audience where the developers knowingly allow minors to play and engage in microtransactions. The bill will ban loot boxes with randomized or partially randomized rewards. It will also prohibit certain exploitative pay-to-win mechanics. For example, developers won't be able to manipulate the competitive balance of multiplayer titles to encourage players to buy microtransactions that give them an advantage.
Manipulating a game's progression system to entice players into spending money to progress won't be allowed as well. The FTC will be responsible for enforcing the rules. If developers break them, state attorneys general could file suits to defend the residents of their states.
Hawley is not the first U.S. politician to propose loot box legislation. Lawmakers in Hawaii introduced four bills in February 2018 that aim to regulate the sale of video games containing loot boxes. Two of the bills would ban selling such games to people under the age of 21. The other two require publishers to clearly label games that have loot boxes and disclose the odds of winning items.
Meanwhile, Senator Maggie Hassan, D-N.H., asked the Federal Trade Commission to investigate the practice of video game loot boxes last year. The FTC plans to hold a workshop about the issue in August, where it will discuss the origins of loot boxes, how they're being marketed to consumers, and the potential behavioral impact they could have on children.