U.S. Senator Says His Anti-Loot Box Bill Has The Video Game Industry Worried

Photo: Susan Walsh, AP

Is Republican senator Josh Hawley an advocate for video game players or an ambitious politician with a savvy staff who know a win-win argument when they see one? The freshman senator from Missouri, who plans to soon introduce a bill that will ban loot boxes and pay-to-win microtransactions, spoke to Kotaku yesterday about his plans.

If this loot box bill passes as proposed, it will make it a fineable offence for publishers to put loot boxes in games that target children or are played by children. It will also ban “pay-to-win” mechanics in those games.

U.S. Senator Introduces Bill To Ban Loot Boxes And Pay-To-Win Microtransactions

Senator Josh Hawley (R-MO) today announced a bill that would ban loot boxes and pay-to-win microtransactions in “games played by minors,” a broad label that the senator will include both games designed for kids under 18 and games “whose developers knowingly allow minor players to engage in microtransactions.”

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In a short phone interview on Monday, I asked Hawley some questions about whether this loot box bill can pass, how it came about, and whether it’s all just a publicity stunt. You can read the interview here, lightly edited for clarity:

Jason Schreier: First of all, I’m curious: Do you have a personal stake in this issue? Is this something you’ve encountered in video games you’ve played?

Senator Josh Hawley: I have to be honest with you, Jason, I am not myself a gamer, so it does not stem from my personal experience. It stems from being a parent of two little boys and talking to lots of parents, and also hearing, by the way, from lots of gamers who are concerned about what the C-suite is doing here, basically adding casinos to children’s games.

Schreier: Do your kids play games with loot boxes in them?

Hawley: They do not yet. They’re six and four. So they are not playing any games at the moment. But I’ve heard from lots of parents who say that their kids, the stories about all of a sudden these charges, ‘What are these weird charges on my card? I thought I already paid for the game, how is it I’m being asked to pay more? Did I authorise this, how did the kid buy it?’ We’ve heard from gamers, too, talk about this ruining the integrity of the game by essentially changing the way the game works.

Schreier: You mention parents finding charges from their kids suddenly showing up on their credit card bills. That can happen a lot with microtransactions that aren’t loot boxes. Why focus specifically on loot boxes?

Hawley: Both loot boxes and pay to win. We think the reason why is that it’s foremost addiction development. It’s an attempt for kids to, as I said before, adding casinos to kids’ games in an attempt to get them hooked, in an attempt to exploit them. We don’t allow actual casinos to exploit children in this way. Why should we allow the gaming industry to do so? These C-suite executives who are driving this trend.

Schreier: Why focus specifically on children? Adults can’t also be exploited by these casinos?

Hawley: Adults can for sure be exploited. I think that children—there are a couple of things as we know in a variety of contexts, whether it’s casinos proper or public health issues, we often look at kids and say they’re uniquely vulnerable. They don’t necessarily know the nature of these microtransactions, being on the lookout for them in the way that an adult might.

And while I realise that these microtransactions, these particular kinds, compromise the integrity of the game no matter who is subject to them, there’s something I think that’s pretty unique to kids and the addiction angle I think is pretty unique to kids as well. So this is an area too where I think we ought to be able to come together on a bipartisan basis and say, ‘Look, when you’re directing this sort of pro-addiction activity, pro-addiction behaviour toward children, or practices toward children, we oughta be able to say no to that.’

EA’s FIFA 19 would be one of the games targeted by Hawley’s loot box bill

Schreier: Have you been in conversations with the ESA, the video games lobbyist group, or any other video game companies about how this might impact them?

Hawley: Yes, yes we have.

Schreier: Can you describe the nature of those conversations?

Senior policy advisor Jacob Reses: This is Jacob here. I think it’s fair to say the industry has concerns about this... We’ve been trying to be very transparent with them, but there may be some difference of opinion.

Hawley: Jacob’s being very diplomatic.

Schreier: Yes, any elaboration you can make here? I ask because I pay a lot of attention to these financial calls that these companies have, and EA for example is very reliant on the loot box income that comes in from FIFA games. A lot of these companies are very reliant on this stuff.

Hawley: And FIFA would indeed be covered by this legislation, to be clear. They’ve certainly expressed their, shall we say, concern over this legislation. But I think that’s probably a good indication that we’re getting somewhere.

Schreier: Do you think you’re getting somewhere? I’ve seen cynicism from financial analysts, from people in the games sphere, scepticism that this will actually pass. Certainly some concerns that this might just be a publicity stunt.

Hawley: I think if they thought it were a publicity stunt they wouldn’t be so concerned. I think the reaction of the corporate lobbyists… sort of strongly suggests that they’re very worried about this. I think it probably also suggests that they know this practice is not going to stand up to public scrutiny. Once parents really understand what’s going on here, and once the general public understands how these games are being manipulated, how their integrity is being compromised, how basically these companies have found a way to make whole gobs of money without really being upfront about it, and of course the addictive nature of it, I think they’re pretty worried that it’s going to result in public backlash, and it should.

Schreier: Public backlash is one thing, but I can’t imagine that many of your colleagues in Congress know enough or care about video games. Can this really get traction among those folks?

Hawley: I think everybody though cares about the health and safety of kids. And they also should care about this broader problem of what I’ve started calling the addiction economy, which this is a great example. We see this in other spheres by the way—we see it in social media, we’re seeing it here in the gaming industry, where you’ve got these corporations finding new ways to try to hook folks, extract personal information from them, in the case of social media.

Extract money of them in the case of games. Without regard to what that does to either in the case of gaming the game itself, and then to people’s general health and wellbeing. So I think there’s a lot of concern about that and we hope to drive a conversation in this space.

Schreier: Previous attempts to regulate the video game industry, most infamously in 2010 or 2011 with a Supreme Court case about violent video games have all failed. I believe a state senator in Hawaii was looking to introduce loot box legislation that also failed. So I guess you’ll have to count me as sceptical that this has much of a chance of getting traction in Congress.

Hawley: We’ll see. Certainly the reception we have gotten from parents, from gamers has been absolutely tremendous. And we intend to push forward. I think this is something that people should be aware of, I think it’s an issue that more and more people are going to care about as they learn about it, and it’ll be the start of a broader conversation.

Schreier: Republican philosophy is generally all about personal accountability. Microtransactions—nobody’s forced to pay for them or buy loot boxes. Why not let the free market decide their fate?

Hawley: Well, similarly, as with casinos, we don’t allow children to go into casinos. We very carefully control, regulate what our children are exposed to. This is well within that model. This is something every parent should care about, and I actually don’t think that exerting—when people understand that what’s essentially happening here is online gambling being inserted into these games, I think a concern about—

Schreier: But that’s not just what you’re talking about here. Your bill also includes pay-to-win games which are not gambling, they’re paying for perks in a game.

Hawley: Similar, though. Once again it’s a microtransaction that’s not necessarily expected, especially from a child up front. And it is meant to induce obviously further playing, but also further spending of money. So it works in much the same way I think. The same arguments would apply.

Schreier: What would you say to a video game company that says, ‘Hey, without these things, you’re going to cause us to crash, cause this entire industry to fold?’

Hawley: These are very resourceful people, and I’m sure they can design games that don’t rely on gambling directed at children in the center of the game.

PR guy Mike Berg: Hey Jason, we’ve got time for one more question.

Schreier: Sure. Something I’m actually personally curious about, and this is not related, but I know that you count Peter Thiel among your [contributors]. Have you guys ever talked about what it was like to try to obliterate my company?

Hawley: (laughs) We have not. So I don’t have any personal information there.


Comments

    And here we have exhibit A, Republicans talking sense. Hopefully it’ll get bipartisan support and not fall victim to the usual political shenanigans between parties.

    And if there is a crash of certain AAA publishers, and mobage as a result... well, they brought it on themselves.

      TBH, the ONLY companies that will crash will be the ones that relied on the shit. So bye bye EA and maybe Actzard. Ubi I don't think are as reliant on it as the others tho, so they should be fine. Same for Bethesda. Then again both are making moves in the mobile games, so who knows.

      The thing we gotta watch out for is that the bill doesn't becomes a vehicle for other things, as tends to happen with this sort of thing politics.
      Politicians don't have a good track record with games and have very broad ideas on what constitutes protection, not to mention a long history of using protection as means to do the opposite.

      The thing that already throws up red flags for me is how vague both the bill is right now and the name, "The Protect Children from Abusive Games Act".

      Then again Jasons scepticism could be well founded and the whole thing is just a clay pidgeon.

        "The Protect Children from Abusive Games Act" is just the title it is basically clickbait you have to read the act and keep an eye on it as it is likely to change shortly before the vote.

        As far as i can tell the 2 things to be worried about is what the democrats or other republicans might try to change in exchange for their support, certain republicans might for example want "gay and trans propaganda" made illegal, figments of their imagination or not. While democrats might want i don't know unflattering representations of socialism made illegal or maybe AOC will want cows banned from games, this is a tad hyperbolic but you get the idea we have to watch out for the frankly inevitable censorious political bullshit using "won't somebody think of the children" as the vehicle for backdooring something unpalatable.

        Both parties have a history of trying to use child safety as a smokescreen for attacking something they don't like.

        this post is too long already so i will post my solution to loot boxes somewhere else

          Exactly my point, these emotionally framed politics nearly always end up being about some form of control beneath the surface.
          Propaganda, censorship and other forms of information control, economic superiority and redistribution etc.

          I can't help but think about things like big data, the entrance of players like Google and Amazon and Americas sudden dislike for any money flowing offshore when I wonder about where this is all going.

    I'm all for protecting children. but at the same time, I can see this affecting games for everyone, and possibly not in the best ways.
    How does this effect the likes of Collection card games like hearthstone or MTG:A they are essentially loot boxes and or pay to win, but the likes of magic, has an almost 30 year history.

    I've not heard what the actually proposed legislation entails, but just banning such things is not the right solution.

      Yeah, I get what you're saying. But technically, the 'loot boxes' in FIFA are the same kind of deal. The whole thing works like a TCG.

        well that is my point. do you think MTG is bad? I certainly don't, but I don't like lot boxes in games such as FIFA. now part of that is because I feel it's ruining games that weren't designed for it to begin with and not really because I think loot boxes themselves are bad. As an adult you and I should be able to vote with our wallets.

          Yeah, but the only reason you're ok with MGT is due to that being how they have always done it. Then there are the hard limits in IRL on the cards them self, plus trading, which BTW MGT does not have but FIFA does.

        i think a solution that might help in regards to loot boxes in games aimed at adults is making the drop chances public, when i played wow we had 3rd party software tracking kills and loot so you had very accurate numbers on the chance of things dropping, this stops the company from screwing over the gamers by fucking with the drop chance and it also would help people make an informed decision about whether it is worth spending the money.

        These companies have the information they know who bought what and what dropped from the loot box, forcing them to publish this information helps gamers and curbs the most predatory behavior, i suspect very few of these companies would like to show us the drop chance of certain things.

        This solution is my compromise i think loot boxes should be removed completely because they are gambling regardless of how informed you are some people are being exploited, warframe has a great system there is no P2W on that store there is some things that will just save you time, something like league of angels is completely different they have actual P2W even though you can technically farm the stuff instead of buying it last time i logged in the people paying for shit had power ratings between like 60 billion and 500 billion the people who never paid a cent and played since release everyday might be 15 billion. Given they hide all the good loot in PVP events that are impossible for the non cashers to win this is literally P2W because if u don't pay you can never win, one of the guys in my guild estimated it would take 112 months of playing everyday just to earn enough of some crystal shit to completely upgrade his gear and some cashers had already finished these upgrades in just 3 months.

        P2W is very different to pay so i don't have to farm as hard somehow this argument has been split into cosmetics and then anything else is P2W which is just not accurate, there is incredibly insidious P2W games out there compared to games that just allow people with some disposable income to pay for something like in warframe for example you can buy a forma or you can spend 3-30 minutes farming a blueprint and then wait 12 hours while it builds.

        And this shit needs to stay away from TCG they just work with it and any changes would ruin the game.

        this might not be too coherent i'm sorry but i'm typing this while at work being constantly interrupted by phone calls from morons.

    So basically if a game is explicitly targeted towards adults and rated for them it won't actually do anything.

      Rating a game 18+, or equivalent, is going to massively reduce the potential audience of a great many games, as well as limit the distribution channels. Walmart, for example, doesn't stock any 'adult' rated media at all.

      Sure, some companies may suck up an 18+ rating and get on with their lives in the hope that parents will facilitate their children getting around the restriction, but past experience suggests that games and movies given provisional adult ratings typically bend over backwards to revise their product in order to sneak under the age gate unless the rating can be used as a selling point.

      In practice, the only games that will be able to sustain an adult only rating, and therefore that will be willing to offer loot boxes, are horror, porn and gore-style shooters.

    Hmm I'm for regulation (not banning) of loot boxes, but don't agree with the pay to win stuff. Yes pay to win is dirty but how would you define it? Most "pay to win" stuff is something you can also acquire with lots of time. So you either pay with your time or your money. Once you've cut out these kinds of purchases what can you expect players to buy? They're very unlikely to spend money out of the goodness of their own hearts. There is no "nice" way to make micro transactions while still making enough sales to run games company.

      there is a democratic way to influence P2W tactics in games, and that is to not play those games if you don't like it. everyone wins.

      Most "pay to win" stuff is something you can also acquire with lots of time

      your only seeing it that way becasue the argument is framed as cosmetics vs P2W we need a 3rd category for the stuff that just saves some time. There is a huge huge market in exploitative P2W games that make the argument oh "but u can just farm it over time and play for free"..... yeh but it will take you years to gather enough shit because they also have gating mechanisms to stop you farming the loot, they make sure you can only get a little bit each day while constantly advertising the fact you can buy 3 weeks worth for $5 US. it's predatory and it's a scam they intentionally design the game to keep these resources scarce and they prevent you farming them while they try and sell them to you.

      You probably just haven't seen as much as i have but trust me the majority of free 2 play games with P2W shit on the store are not really giving you the option of just farming the shit instead, they actively prevent you from doing just that.

        True, but how do you define P2W within the realms of law? Describing loot boxes is fairly straight forward, but P2W could mean anything or nothing.
        You could say "anything that's exclusive that offers an in game advantage" but then you would have to define exclusivity and advantage. Is it exclusive if a free user can get it after 3 years of grinding? If not, how do you define a reasonable time period? If you have two items that function the same but one looks different and requires real money, is that exclusive?Does a camo skin provide an advantage? Does this weapon which is completely different to others confer an advantage or is it just a different way to play? It would be completely unviable for lawmakers to define these and would be too difficult to either enforce or comply with.

          all excellent points thanks for your reply.

          i am not arrogant enough to think i could think of and solve this issue solely on my own, especially if your talking about the legal framework or language used to frame the laws needed you need lawyers for that. What i am suggesting isn't all that nebulous however your entirely correct that lootboxes are easy to define and P2W is not, i think i laid some pretty solid if broad groundwork to get the ball rolling.

          If the games mechanics prevent you from farming a certain resource but you can buy as much of that resource as you like then that is predatory P2W, i am literally talking about games that you can play every single day and it only takes about 1 hour to complete all you daily quotas. In these games doing absolutely every piece of content possible nets you like fuck all resources but you can buy as much as you want i think that is probably not terribly hard to legislate against as a nice starting point.

          If the game is designed in a way that actively prevents you from gathering resources but will sell you said resources then that is predatory, i understand the argument of just don't play or if you do don't give them money but at the end of the day these scams do work and for all i know they are working on the mentally handicapped. I think the fact that these scams work is evidence enough that they need to be shutdown and we should start with the ones deliberately designed to scam people.

    While loot boxes certainly ruin games(p2w), the argument here seems that parents who give their kids unrestricted access to their bank accounts/cards are getting charged for these things without their knowledge... there is a fix, STOP BEING A SHITHOLE PARENT.

    STOP buying your kid the latest iphone trash, stop giving them creditcards, just STOP IT! But ultimately, STOP letting your kids play these games for 10hrs straight a day! put some limits in place you stupid dingbats.

      Agreed, parents need to be aware of what their children are doing. if they don't know what their children are doing, then they are failing in their parental duties.

        I'm going to guess that neither of you are parents.

        Either that or you have no time to play games yourself because you're too busy constantly looking over your children's shoulders.

          They don’t remember ever being children themselves either

          Well I know that none of parental friends keep payment details attached to any accounts their kids have access to. turns out that you don't have to leave 1 click payments enabled.

            The fact that the only way you can imagine kids getting access to loot boxes is parents leaving 1 click payments enabled demonstrates my original point better than I ever could. Cheers.

              please tell me then. how do kids who don't have automatic access to payment details pay for things? how? the only way they can pay for things otherwise is if you leave your card around and they take it or you tell them the details. if they take your card, you may have issues to deal with.

    If you can’t survive as a company without fleecing your consumer base you deserve a crash. Action of this sort has been a long time coming, the industry should have self regulated this a long time ago, I hope this hits EA and their ilk very hard.

      True that. They definitely deserve what's coming to them.

      well said, i mean the fact that this is just "wont someone think of the children" is kinda bugging me considering how many games out there designed specifically to limit the amount of resources available then try to sell you the resources, i mean why just the children these games are designed form top to bottom to exploit people. I used to think well they are just morons if they spend the money but i don't think that is right.

      These are predatory games designed to exploit people for money the fact is they do work and people should be protected from them, the same way we lock people up if they break into your house and steal your shit, or any other fraud like email scams and the old fake gasman at the door.

    Let's be real, if the government could find a way to tax loot boxes they wouldn't give a shit, trying to get them clasified as gambling is just one step towards throwing a "pokie" tax on them.

    disclaimer: I don't like loot boxes I'm just very cynical about government motivation.

      Every loot box sold to an Australian is subject to the GST. Every loot box sold to an American is subject to state sales tax in the state where that person lives (although not all US states have sales taxes).

        Aren't most loot boxes purchased with digital currency, I don't think digital currency can incur GST.

          Digital tokens are purchased with hard currency. The purchase of digital tokens with hard currency is the point at which the transaction attracts sales tax.

          Forcing you to convert hard currency to digital currency is just one of many psychological tricks used by loot box companies to distance your brain from the idea that you're throwing real money away opening virtual loot boxes, even though you are.

          Really nefarious companies even add a third conversion to really confuse your brain cash $ -> gems -> honor -> loot box. You're still spending real money though, even if it feels like you aren't, and the tax you are paying on the transaction was already collected earlier in the process.

    Loot boxing is a part of 'the' live service cancer affecting EA and Activision that makes them ruin other companies like Bioware and Blizzard, not to mention franchises and brands. Anthem would have been much better if it was a pure single player game with no live service with a decent amount of time and no marketing/accounting execs sticking their noses where they don't belong.

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