U.S.

 senators propose strict rules on pay­to­win
microtransactions and loot boxes
By Charlie Hall @Charlie_L_Hall May 23, 2019, 5:27pm EDT

Democratic and Republican senators can hardly agree on what to order for lunch, but
as of Thursday they seem to agree that the video game industry requires additional
government oversight. Proposed legislation could ban loot boxes and other kinds of
microtransactions, and its co-sponsors include members from both major parties. The
devil is in the details, of course, and the bill itself could have far reaching implications
for the game industry.

The full text of the proposed bill is available online. Its intention is to “regulate certain
pay-to-win microtransactions and sales of loot boxes.” In order to do so, it first has to
define what those things are.
According to the proposed bill, a pay-to-win microtransaction means:

An add-on transaction to a interactive digital entertainment product that [...] eases a user’s
progression through content otherwise available within the game without the purchase of such
transaction; assists a user in accomplishing an achievement within the game that can otherwise be
accomplished without the purchase of such transaction; assists a user in receiving an award
associated with the game that is otherwise available in association with the game without the
purchase of such transaction; or permits a user to continue to access content of the game that had
previously been accessible to the user but has been made inaccessible after the expiration of a timer
or a number of gameplay attempts; or with respect to an interactive digital entertainment product
that, from the perspective of a reasonable user of the product, is a game featuring competition with
other users, provides a user with a competitive advantage with respect to the game’s competitive
aspects over users who do not make such a transaction.

The only exclusions listed in the bill are additional difficulty modes, cosmetic items,
and downloadable expansions. So, if a company wanted to charge for a new game plus
mode, they could do that. Also, the sale of skins in Fortnite and new content
expansions for The Elder Scrolls Online would be perfectly acceptable.

But, these guidelines as written leave a lot open to interpretation. Would it call into
question selling experience point boosters in games like Anthem, Destiny 2, and
World of Tanks? What about the practice of selling access to characters in Mortal
Kombat 11 and Apex Legends, and even new Champions in League of Legends? Do we
get to the point where, somewhere in the future, senators are arguing whether or not a
particular weapon or perk is overpowered and should not be for sale?

Loot boxes are somewhat more narrowly defined:

An add-on transaction [...] that in a randomized or partially randomized fashion unlocks a feature of
the product; adds to or enhances the entertainment value of the product; or allows the user to make 1
or more additional add-on transactions that the user could not have made without making the first
add-on transaction; and the content of which is unknown to the user until after the user has made the
first add-on transaction.

So the loot boxes from Star Wars Battlefront 2, the ones which were so controversial
that Electronic Arts voluntarily removed them from the game, would be straight out.
But that language also calls into question the practice of selling randomized packs of
cards in games like Hearthstone and Magic: The Gathering — Arena.
The wrinkle is that these prohibitions don’t apply to everyone, necessarily. The bill
pokes at a soft spot in the industry’s underbelly: how it targets children.

The bill would specifically prohibit pay-to-win microtransactions and loot boxes “in
minor-oriented games,” meaning games that are geared toward children under 18.
That seems fair enough. But the proposed bill would go even further than that. It
would also prohibit pay-to-win microtransactions and loot boxes in games “where the
publisher or distributor has constructive knowledge that any users are under age 18.”

Constructive knowledge, as it turns out, is very different from actual knowledge,

according to Georgetown Law professor Angela Campbell.

Proposed loot box bill text by on Scribd

 

LYN19247 S.L.C.

116TH CONGRESS
1ST SESSION 
S.  ll
To regulate certain pay-to-win microtransactions and sales of loot boxes
in interactive digital entertainment products, and for other purposes.

IN THE SENATE OF THE UNITED STATES

 llllllllll
Mr. H AWLEY  (for himself, Mr. BLUMENTHAL, and Mr. M ARKEY ) introduced
the following bill; which was read twice and referred to the Committee
on  llllllllll

A BILL
To regulate certain pay-to-win microtransactions and sales
of loot boxes in interactive digital entertainment prod-
 ucts, and for other purposes.

1 of 18

“Actual knowledge is a subjective test,” Campbell tells Polygon via email. “It asks
whether the company in fact knew that minors were using the service. Constructive
knowledge is an objective standard. It asks whether the operator knew or should have
known that minors were using the service.”
Essentially, if children can get access and play a video game, then there is a real risk
that this bill would force developers, publishers, and distributors to grapple with the
fact that children are playing that video game. And it would allow the Federal Trade
Commission, who would be chartered with enforcement on this bill, to force those
companies to do the grappling on the public stage.

The FAQ document that was released alongside the proposed bill puts it quite plainly:
“The onus should be on developers to deter child consumption of products that foster
gambling and similarly compulsive purchasing behavior,” it says, “just as is true in
other industries that restrict access to certain kinds of products and forms of
entertainment to adult consumers.”

Applying the constructive knowledge test to video games has the real potential to
throw up barriers between consumers and the games they want to play. But those
barriers may need to be strengthened in order to verifiably keep children out.

“Constructive knowledge requires the operator to make reasonable inferences and at

least in some cases, investigate,” Campbell continues. “For example, the operator of a
social media service that says in its terms of service that it is only for use by persons
over age 13, and yet anyone who uses the service can see that many young children use
it to post videos of themselves, would have constructive knowledge that children were
on the service. It probably would have actual knowledge as well, but actual knowledge
is harder to prove.”

The Entertainment Software Association is understandably up in arms over this.

When Polygon specifically asked about the concept of constructive knowledge, the ESA
offered a previously prepared statement, attributed to CEO Stanley Pierre-Louis.

This legislation is flawed and riddled with inaccuracies. It does not reflect how video games work nor
how our industry strives to deliver innovative and compelling entertainment experiences to our
audiences. The impact of this bill would be far-reaching and ultimately prove harmful to the player
experience, not to mention the more than 220,000 Americans employed by the video game industry.
We encourage the bill’s co-sponsors to work with us to raise awareness about the tools and
information in place that keep the control of video game play and in-game spending in parents’ hands
rather than in the government’s.

The bill right now is just a proposal, but bipartisan support gives it momentum that
few things in Washington, D.C. have at the moment. It casts a spotlight on the
industry, and even discussing the details of the bill could have implications for how
video game makers earn their money in the future. The industry may need to consider
more strict age verification, which could potentially limit the audience for its games.
Otherwise, both pay-to-win microtransactions and loot boxes may need to go.