Joseph Simons, chairman of the Federal Trade Commission, pledged to Congress Tuesday (Nov. 27) that his agency would look into in-video game "loot boxes," which generate ongoing revenue from online games via virtual items that can be bought—say, new or more powerful weapons.
Sen. Maggie Hassan (D-N.H.) said that such revenue generators were predicted to be a $50 billion business by 2020.
She said that "loot boxes" are now "endemic" to the video game industry from smart phone apps to high-budget releases. She said children may be "particularly susceptible" to such purchases.
She also pointed to a UK report that 30% of kids have used loot boxes in video games, which could correlate with problem gambling later on.
She said it was time to investigate the boxes to make sure kids are protected and to educate parents about potential addiction. Simons, joined by all the commissioners, committed to "undertaking this project and keeping the committee informed about it."
Hassan was following on a line of inquiry by Sen. Ed Markey (D-Mass.) who got assurances the FTC was looking into issues he had raised about in-game purchases in kids-targeted games, including one he cited where a character continued to cry if a child did not make a purchase.
Simons assured Markey that he and the agency were concerned about manipulative in-app marketing, and that it was looking into, or likely would look into, various allegations against Google and others related to kids content, including that Google's YouTube, asserted that its toy review for the kids channel was not targeted to kids and thus not subject to the Children's Online Privacy Protection Act, which Markey authored two decades ago.
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.