Posted in: Games, Video Games | Tagged: e3, Electronic Entertainment Expo, Entertainment Software Association, ESA, loot boxes, lootboxes, Michael Gallagher

ESA President Defends Loot Boxes and Warns Against Government Intervention

The president of the Entertainment Software Association (ESA), Michael Gallagher, has defended the practice of offering loot boxes in video games during his address at the Nordic games Conference. According to GamesIndustry.biz, Gallagher warned that efforts to regulate them as a form of gambling "challenges our industry's freedom to innovate, and impairs our ability to continuously test new business models, which drive creativity and engagement with our audience."

Gallagher's statements echo the ESA's continued stance on loot boxes, insisting that they do not constitute a form of gambling. The Association has also offered responses to Hawaii's continued attempts to regulate the sale of lot boxes.

Gallagher asserts that monetization mechanisms similar to loot boxes have existed in video games for a long tome, something of which he says individuals and agencies seeking to regulate them are often unaware. He reiterated the opinion expressed by multiple game publishers and the ESA itself, arguing that loot boxes cannot be considered gambling because they always deliver something for the players money.

"When you look at the definitions of gambling throughout the world, and how this is done and how it's regulated in places like Las Vegas and the US, it's quite different to the mechanism with loot boxes in games," he said. "That conclusion has been reached—in other words, that this game mechanic is not gambling—by the Entertainment Software Ratings Board in the US, by New Zealand's gambling authority, and by the UK's gambling authority."

In essence, loot boxes are less like a slot machine and more like a sticker dispenser. You remember the ones, insert four quarters and you'd get a set of stickers from one of several options. Loot boxes work in pretty much the same way, just with more computerized randomness.

Gallagher went on to insist that game developers and publishers must continue to self-regulate the sale of loot boxes, rather than resort to legislation. He pointed to the ESRB's quick adoption of the "In-Game Purchases" label as proof that self-regulation is the best way to go.

"We can't go to the lowest common denominator of government around the world, and make that the standard the rest of the world has to live by, and limit the trajectory of the industry," Gallagher told GamesIndustry.biz. "That's not the best approach. Instead, we believe it's best to be clear about the facts, and make sure those carry the day around the world, so we drive an outcome that best extends the [games industry's] frontiers and looks after the interests of gamers."

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