The Government's Response To The Loot Box Inquiry: ¯\_(ツ)_/¯

The Senate's cross-party inquiry into loot boxes delivered their findings late last year. Late last night, the Coalition government finally tabled their response.

The gaming micro-transactions for chance based items inquiry received plenty of inquiries from state government, statutory federal bodies, concerned Australians and the gaming industry at large. But after a split amongst its members, the majority recommendation from the inquiry was that the Australian Government ask the Department of Communications and Arts to lead another review into loot boxes specifically, with the Department of Social Services, Office of the e-Safety Commissioner, Classification Board, ACCC and ACMA all taking part.

Senate Inquiry Calls For 'Comprehensive Review' Of Loot Boxes

The Senate inquiry into "gaming micro-transactions for chance-based items" - otherwise known as the loot box inquiry - has tabled its report to Parliament, recommending that the Federal Government undertake a "comprehensive review of loot boxes in video games".

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The Australian Greens - who chaired the inquiry through Senator Jordon Steele-John - offered five dissenting suggestions that went much further. Some of those suggestions aligned with the views of state government and regulatory bodies, including the addition of loot boxes in some form to the current classification system, as well as the joint development of a consumer protection framework with community groups and the video game industry.

Those recommendations, however, are just that: recommendations. And even the consensus view of the review can be ignored at will, which is more or less what the government has opted to do in their response:

The government response goes on to say that while gambling is a "serious public health concern", they pointed back to the committee's admission that "research on gambling-related harms experience as a result of loot boxes in games" isn't far enough advanced to warrant any legislative changes.

The committee's sole unanimous recommendation of a formal departmental review into loot boxes was also rejected out of hand, with the government saying that the Department of Communications and the Arts would continue looking into the matter nonetheless:

While the Australian Government considers that a formal departmental review of loot boxes in video games immediately after the inquiry is not warranted at this point in time, the Department of Communications and the Arts will continue to examine regulatory frameworks, working with other Australian Government agencies. As part of this, it will monitor academic research and consider the need for further research; continue conversations with international counterparts and industry; gather further views from public interest groups; and monitor changes in the video game industry as game developers' monetisation strategies evolve.

It will also consult with the Department of Social Services with respect to potential harm minimisation measures applicable to gaming micro-transactions for chance-based items, as well as any linkages to the National Consumer Protection Framework for on line wagering announced in November 2018.

It's a bit of a catch-22: the government notes that there's community concern, but won't enable the department to launch a formal review and says that there's not enough research to warrant moving forward. But the government also isn't making any moves to assist or boost that research in any way, which means the status quo will continue.

The government did add that the Classification Board has updated their website with the results of a survey into loot boxes and simulated gambling. That survey is part of a larger report commissioned from Whereto Research Based Consulting, which was also uploaded to the research documents portal on the Classification Board website.

The conclusion from that research, which can be read here, found that most of those surveyed believed that loot boxes that could be paid for with real money, or traded to earn real money, should be restricted to gamers aged 18 or older:

Microtransactions and loot boxes are a hot topic within the gaming community. In this project, participants felt that loot boxes containing items that confer in-game advantages did not constitute harmful gambling activity, so long as they: could not be purchased with real-world money, or be traded either within or outside the game for real money. Loot boxes that can be purchased using real-world currency or traded for real currency equivalent were deemed by most to be gambling activity that should be restricted to those over 18 years of age.

Simulated gambling games that include or focus on a direct simulation of casino games were seen as potentially harmful for children and young people. There was a fear that exposure to this type of gaming would normalise habitual poker-machine playing and lower the barrier to potentially harmful gambling behaviours later in life. However, participants emphasised a need for education around the potential harms of simulated gambling for young people and parents as well as restricting this kind of material to those legally allowed to gamble.

The commissioned research also covered community attitudes into gaming classification more broadly, finding that parents were "not necessarily aware of the range of socially sensitive material that computer games can include" and operated on the assumption that "all games are designed for young people". It also found that depictions of domestic violence in video games (a scene from Detroit: Become Human is referenced) were more problematic than high impact or violent themes, like those found in Counter-Strike or Fortnite.


Comments

    It sucks how they say more research is needed.. But there are tonnes of research already on gambling and its effects.
    It's like they are saying all the research into pokies doesn't apply to blackjack?

      The Liberal party gets kickba-- donations from pokie vendors, so it's in their best interest not to upset that apple cart.

        Frustratingly, it's just about every snout in the country feeding at that fucking parasite-laden trough.

        With a few, rare, ethical exceptions, there is bipartisan support for gambling lobby money.

          I am so glad that NZ doesn't allow these types of kick backs, I mean donations to occur. little america, sorry Australia is getting closer and closer to having a lobby system like america its stupid.

          You only need to look at how much hurt it has caused in America to know that you should want nothing to do with it.

            The LNP in particular saw the strides America's 'conservatives' have been making in the centralization of wealth and generally punching down, and decided they'd like very much to get in on that action. And the ALP has not fought them in any way beyond, "We'd rather prefer it was our cronies who have the advantage, thanks," rather than contesting that the advantage should even exist.

            It's disgusting that this kind of don't-call-it-corruption-because-it's-technically/mostly-legal corruption hasn't been dragged out into the light for the public to see why fighting over, 'fuck off, we're full' is a bullshit distraction that hurts EVERYONE.

        Don't forget the Labor party owns clubs which get a huge share of their revenue from pokies as well.

          The Labor party aren't in government, though, so they're not the ones currently making these decisions.

        Except that doesnt make sense, pokie revenue is down due to microtransactions and online gambling rise... also video games are actually in breach of patents and copyrights that the poker machine manufacturers have been atracking each other in Federal Court for over a decade.

        I was expecting the poker machine industry to be reacting, cause they are regulated and loot boxes are not. Gambling laws exist to protect the industry, having mobile phone ganes being the new addictive money eater doesnt help them.

          I get the feeling that they prefer not to stir those still, cloudy waters. What if special ruling created for lootboxes is later used as precedent to tighten regulations across the board?

            Except... Pokies pay taxes. Microtransactions dont! Pokies are already at a far greater disadvantage, while most microtransactions are paid through online stores through some of the largest companies in the world that offshore bank every cent they earn.

            There is no reason, none, I can see the government has for protecting loot boxes. If anything their continued existence is actually hurting the Australian economy.

              Oh I don't mean the government or anybody should protect lootboxes. Rather, that the pokies people already are getting away with a lot of stuff (more exactly, paying to get away with it). As much as it must sting to them that lootboxes do not have even the few regulations pokies get, it's more convenient for them if nobody talked about regulating any sort of gambling, ever.

              Besides, it's not like lootboxes eat into their profits, anyway. They have very little overlap of customers.

      What I don't get is why more research is needed but the government won't fund or run that research.

      "I don't know enough to make a decision.... but I don't want to educate myself either"

        If you can't make an educated decision and refuse to become educated, you can just never make the decision. Sorted.

        Lootboxes won't get the redneck vote, so Scotty's Merry Men aren't going to care.

      It's more akin to trading card packs than it is to gambling. Gambling the majority of the time you get 0 but are also fed enough small wins to keep you on the hook. Trading card packs you always get something for your money, the value of which varies.

      The difference with loot boxes are they're trading card packs with the trimmings of gambling skinner boxes to trigger the addiction centre of your brain. That distinction that separates it from conventional gambling is enough for regulatory authorities to have doubt on using the research from gambling alone to assess loot boxes.

        That's my takeaway as well. You can buy a MTG pack for a random selection of content, and either get good or bad cards. Then trade them to other people. Apparently that's gambling to a point it needs legislative control.

        Is it really a problem, and if so how do you deal with it? I've seen one story on Apex Legends about it, and it was just someone being stupid. While I know there are more than just 1 person doing similar, it still isn't coming across as something hitting a statistically significant portion of the playing population. Try saying that 5 times...

        Being tradeable, you cant even limit the amount being bought as you can just use burner accounts to get around that. Which is reflective of the players personality, not the game.

        How big an issue is this in practice though? What percentage of players consistently spend more than, say, $100 a week? Or $50? Or even $20.

          Seriously I've seen someone blow $2000 on MTG cards in one hit before...

            One person though. Out of countless millions that have bought those packets. It seems to me that means the problem is the person, not the game. And yes, I know it wouldn't be an isolated incident, but as a percentage of player population, is it a trivial amount? What would be statistically relevant? 10% overspending? 5%? 1%?

            Some people demand its a problem if a single person does it. I happen to disagree, believing the person should bear responsibility for their choices. Demands like that are like demanding to speed limit all cars to 40kmh because one person sped through a school zone. You don't do that, you put rules in place to deal with the individual.

            How you could have limited MTG purchases, I have no idea. Any system that might be effective would be ridiculous. And easy to get around anyway.

          My opinion is that it's different from trading cards in the way that it's implemented by developers, and not in an easily quantifiable way.

          Developers go out of their way to research ways to make their lootboxes more appealing and more addictive in ways you just don't see in trading card games. Whether it's a company patenting a method to match players up against someone who has equipment from lootboxes, intending for the first player to loose and show them that they might win if they opened up some lootboxes or whether it's designing a "social space" for players to open their boxes in big, gaudy, flashy ways between games to make people watching want to open some too.

          In my mind it's that intention to go above and beyond to get the audience hooked that separates the two. Developers constantly try to push the boundary to find out how to push those dopamine receptors more and more, rather than letting it be organic.

          It's hard to quantify and measure objectively, but even basic things like having a secondary currency that helps to dissociate the real price of a lootbox from it's dollar cost is something that you don't see in real life trading card games. I'm not saying that TCG's don't also try to boost sales through getting people to fear missing out, but it's definitely at a more reasonable level than video games. And it's that extra step that makes Lootboxes more insidious and in need of regulations in my mind than trading card games.

            Thanks for the considered reply, you make some good points. In the end, its gambling. Whether its the lure of a rare MTG card that's become the Must Have of that season, or matchmaking with better geared players, they're all trying to do the same thing. Separate you from your money. They're a business, that's what they do.

            And they aren't breaking any laws doing so. If they got rid of that matchmaking crap (and I totally agree its dodgy AF) people would still complain. Most complaints are about the gambling aspects, and doing no research into whether its an actual problem, or just gamers being entitled.

            The Battlefront 2 saga that started all this was because of the pay to win side of it - THAT is an issue to me. And it was sorted. Pay to look pretty isn't, but people now demand that it is. If you're chasing that rare cosmetic, just to make your e-dolly look different to most others, the fault is on you, not the process.

            This is what makes the issue so sketchy to me. There are so many different views that nobody can come up with a basic summary of what the issue actually is. Is it gambling? Is if gambling for pay to win? Is it the rarity of drops? Is it the psychology being used?

            To combine this with other comments I've made on a totally different subject, games cost lots of money to make. But the cost to buy them has gone down, not up. There are reasons for this, but one of them is the belief that keeping the entry level cost low brings in more players, who can then might spend money ingame to build revenue. But with games costing up to $300m to make, they still need to get that money back. While keeping the entry level cost low...

            Its a business model that helps gamers, but now the problem is that every angle they take to make money gets shot down by the players. They just want that $60 up front price tag, and nothing else. Not understanding that if its just the upfront price tag, that's going to end up being $200...

            By the way, don't think that CCG's weren't as bad. To me, they were worse - the entire game is pay to win, meaning you needed to keep hunting those rare cards just to have a chance of being competitive. And when they changed the meta regularly with new sets, you were forced to keep spending more if you wanted to keep playing.

            New set comes out, you were going to be left behind if you didn't buy them. That's preying on the gambling aspects, and with the time side of it, creating a gambling aspect lootboxes don't approach.

              And they aren't breaking any laws doing so. If they got rid of that matchmaking crap (and I totally agree its dodgy AF) people would still complain. Most complaints are about the gambling aspects, and doing no research into whether its an actual problem, or just gamers being entitled.

              I think it definitely is a problem, and I think it's easier to see that when you look at it from a broader perspective than just loot boxes. I think it's the same root problem as a lot of microtransactions from mobile games. There's a *lot* of stories of people who find themselves addicted to Candy Crush or Angry Birds but don't realize it until someone shows them that their spending upwards $500-$1000 per month on it.

              There's massive issues with even children stealing parents cards to fund these transaction to the tune of hundreds or thousands of dollars, with Facebook even doing an internal investigation and finding that not only was their rate of chargebacks on microtransactions in the range of 9%, 18x that of most businesses and almost 5x more than what the US Trade Commission considers a red flag for deceptive products.

              To me, the lootboxes look a lot like a reskin on the same mechanics used there. And no, they're not breaking the law, but I think we should seriously consider regulating it. We regulate gambling for a reason, because it exploits people by creating addictions. I feel we should do the same for lootboxes, if studies find that they too exploit people by creating addictions.

              This is what makes the issue so sketchy to me. There are so many different views that nobody can come up with a basic summary of what the issue actually is. Is it gambling? Is if gambling for pay to win? Is it the rarity of drops? Is it the psychology being used?

              My personal take is that it's not quite gambling. It's different, but it hits the same psychological spots that makes gambling something that we consider in need of regulation. And it's that ambiguity, that difference, that gives there so many different viewpoints. I think that as a society we're realizing that there is a problem, but we're still trying to articulate what the problem actually is because it's so new.

              To combine this with other comments I've made on a totally different subject, games cost lots of money to make. But the cost to buy them has gone down, not up. There are reasons for this, but one of them is the belief that keeping the entry level cost low brings in more players, who can then might spend money ingame to build revenue. But with games costing up to $300m to make, they still need to get that money back. While keeping the entry level cost low...

              My general opinion on this is that games might cost more to make, but they also reach a far wider audience. The top selling game of 2007 was Halo 3, a massive success. It moved almost 5 million copies. In the same year COD 4, a classic, sold just over 3 million. In 2017 COD WWII moved 20m units. In fact, there were 14 games that sold more in 2017 than Halo 3 did in 2007 (according to https://vgsales.fandom.com/wiki/2017_in_video_games).

              On top of that older games absolutely cost a tonne to make. Halo 2 had a total budget of $212m (after inflation), almost $50m more than Destiny. FF7's budget was at least $125m, maybe $200m, easily costing more than Shadow of the Tomb Raider or Battlefield 4. Hell, Halo 2, almost 14 years old, ranks in the top 5 most expensive video games to develop at all times.

              I don't think that video game companies need to be bumping prices to be quite honest, but I'm not someone who follows their finances so maybe I'm wrong. I do know that if they want to do it, doing it by exploiting the same things that gambling exploits to create an addiction is not something that they should be doing

                Again, nice considered reply.

                I agree with everything your saying here, dont get me wrong. The one thing I disagree with is who's fault it is.

                There's a *lot* of stories of people who find themselves addicted to Candy Crush or Angry Birds but don't realize it until someone shows them that their spending upwards $500-$1000 per month on it. Define a *lot*. Hundreds? Thousands? There has been no proper research on this, its all anecdotal. We've all seen those stories, but if its a couple of thousand out of the 50 million people playing Candy Crush or Angry Birds, so what? The problem isnt with the game, its with the player.

                On top of that, what IS an acceptable amount? Those are free games, they're entitled to make a profit. $1000 a month might be extreme, but you dont know the persons circumstances. That might be trivial to them, so theres no harm. And again, where there is, the problem is with that person.

                There's massive issues with even children stealing parents cards This, right here, is an ideal example. Kid steals credit card to buy something, and the reaction is to punish the maker of what they're buying, just because its popular? Cant you see the stupidity there? That kid steals the parents car and goes for a joyride you dont force the car companies to put better locks on the car, do you? Those kids are thieves, and the game didnt make them that.

                Again, not saying there arent gambling aspects here, there most certainly is. But so many times the issue is with the player, not the game. If this is being done by adults, why arent they being held accountable? Where its kids, where the hell are the parents in all this? Why arent they parenting?

                My general opinion on this is that games might cost more to make, but they also reach a far wider audience. Yeah, discussion was more around why games havent gone up. If they had merely gone up the same as inflation, they'd be hitting $300 by now. They arent, for a range of reasons. One of which is the wider audience, another is they smoothed out the cost to the player so its no longer a single up front payment. They have these ways to get more out of players later, and on average get a reasonable return.

                There are other reasons, and they all play their role, but if you start taking those reasons away something has to give. If you're taking away an income source, another income source has to change, or a new one introduced.

                Not the point here really, just one of the possible results of denying them one of their income streams.

                Main thing I'm trying to get across is that the blame isnt all on the game. Most of it should be put onto the person and thats the big difference between us I think. Those kids stealing the credit card are thieves. Its pretty simple, and is not the games fault.

                ...doing it by exploiting the same things that gambling exploits to create an addiction is not something that they should be doing Its in gaming as far back as you care to look, so where do you start? Its randomised rewards, and plenty of games have meant people grind a certain mob/fight to get the drop they need. When theres a subscription involved, its no different - game is making money on you repeatedly doing something for a random reward. So do you ban WoW? Gambling aspects in general can be seen in Super Mario games, with simple visualisations in end of level rewards. Its everywhere, both in gaming, and society in general.

                  I mean, I definitely agree that there needs to be studies on this. I think a lot of the people being loud about this and a lot of the articles being written rise from the lack of studies. It looks like there's a large portion of people who believe this is a legitimate issue that needs looking in to, but Governments don't appear to be starting any decent in-depth studies into it.

                  Even this inquiry, which was the Government looking into it, was brushed away with "There's no studies showing any issues, and we don't want to study it".

                  Personally I'd like to see lootboxes gone from videogames. But separately, I do think there needs to be a study into it. Hell, multiple isolated studies to see if they come with similar results. Even if those independent studies show that it's not addictive or detrimental to the audience. But until those studies occur, all we've got is frustration and a difficulty when it comes to trying to articulate what we're frustrated about.

                  This has been a good chat. It's been good to read your thought out replies. Thanks :)

      You can't make money buying loot boxes. Very different.

      You're not going to end up going bankrupt due to racking up losses buying loot boxes like you can with pokies or blackjack or poker.

      Anyone who thinks loot boxes is equivalent to those gambling games is delusional.

    It's so disappointing to see that parents-- most of whom are now in the same generation as me-- still think video games are for kids. This is a generation that grew up alongside games and absolutely should know better.

    What a waste of a generation we really are.

      Yeah I actually posted about this below. Video games are so mainstream nowadays that it is hard to conceive that a parent would not know that there is some video game content that is just not for children.

        eh, it's less about "not knowing" and more about deflecting responsibility. It takes much less parenting effort to let the government remove all potentially harmful content than educating one's kids and keeping an eye on the stuff they consume.

      What a waste of a generation we really are.You speak for all generations with that statement. It's confident and valid.

    There is one way to fix this.

    Ring or email or mail your local rep over this. If people started to actually tell their rep that this is what needs to happen, they have to take note, especially if everyone says it will lose them a vote. The only way this is going to get anywhere is if we push it hard. Best way to go would be for someone far wordier than me to come up with a letter that we just sign and send to our local reps, that clearly outlines that they need to do something.

      Did that... they all said its not their issue or redirect you to the government agency that says its not their issue. States cant do anything and the DCAs pisition is its not a breach of current laws...

      Seriously they all miss the point cause its "Not my Problem" cause the charter/law doesnt say it clearly.

      Even ACCC wont touch it as a consumer law breach for illegal marketing and hidden charges, even though they get daily scamwatch reports of shoddy mobile games.

    Wow. How are parents still thinking "All games are for kids"? Look Im 50 and started gaming in my early teens. Most of my friends my age play games too. Most of them have kids. Most of them play games with their kids. They are well aware that not all games are for all ages. Gaming is so mainstream nowadays that its baffling that a large proportion of parents are so naïve. Sure I tend to hang around folks with like interests but its not that common these days to meet someone who doesn't play video games at least in a casual capacity.

    We need a senate inquiry into senate inquires, what a joke and a waste of time and money.
    Time and time again money is wasted.
    1 the fuel watchdog is a joke instead of policing the overcharge of fuel it tells you where the cheapest fuel is.
    This is another example of a system that gives recommendations instead of actually making a difference.
    Do you think the loot box style gambling and esrb style warning system will allow parents to make an informed decision?
    Here's a free non taxpayer funded answer NO.
    Kids are already conning their parents into buying FORTNITE SEASON 7 PASS.
    Parents are buying it thinking it's a new game and or required to play fortnite.
    Uninformed parents are even thinking there's a disc in the case and its not a DLC code.
    That's the bottom of the barrel you need to be catering this towards uninformed uneducated parents.
    Here's a hot tip fortnite itself is already making enough waves with the kids addicted to it.
    Now couple that with vbucks and pinatas and tell me it's not a possibility of a worse outcome.

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