The Federal Trade Commission will investigate the so-called video game loot boxes, FTC chairman Joseph Simons said during a congressional oversight hearing on Tuesday.
What Are Loot Boxes?
Loot boxes, which can be found in popular video games that include Counter Strike, Overwatch, and Star Wars: Battlefront II, are a form of microtransactions in which players spend real money to win in-game packages.
The digital goods can range from new characters and weapons to dance moves.
Players do not actually know what they will get before they open the box. While some loot boxes offer rare and valuable digital goods, many contain common items. Some of these items can be sold in secondary markets for real cash.
Pushback Against Loot Box Practices
Loot boxes provide a major source of income for video game companies. The $30 billion industry, however, has raised concern among psychologists and anti-gambling advocacy groups over fear that consumers can exhibit gambling-like behavior when buying loot boxes.
During a U.S. Senate Commerce subcommittee hearing on Tuesday, New Hampshire Senator Maggie Hassan, who has requested for an investigation of loot box practices, asked FTC commissioners about additional oversight regarding loot boxes and how these may appeal to children. Hassan said that children are particularly susceptible to loot boxes.
"Given the seriousness of this issue, I think it is in fact time for the FTC to investigate these mechanisms to ensure that children are being adequately protected and to educate parents about potential addiction or other negative impacts of these games," Hassan said.
In response to Hassan, Simons said that the regulator would look into in-game loot boxes, albeit he declined to discuss more details about FTC's current position on loot boxes and if they constitute a form of gambling.
Other countries such as Japan, Belgium and the Netherlands have already brought in legislation to control use of video game loot boxes.
