Microtransactions in games and apps alike have had a massive impact on the revenue of gaming companies. DLCs (Downloadable Content), loot boxes, or skins and items generate low-hanging profit for developers and potentially cause addictive behaviors in players. Over the past ten years, the industry has generated more revenue and profit than the music and movie industry combined.
More often than not, in-game content such as items and skins hold a real money value outside the games. This has brought investigations and increased oversight from lawmakers and the general public alike. A mix of politicians, behavioral experts, gamers, and concerned parents have advocated for stricter regulations due to the often exploitative nature of these microtransactions and related in-game content commonly found in Android and iOS apps.
While loot boxes have been in the crosshairs of lawmakers over the past years, an area that’s receiving more attention is Pay-to-Win (P2W). Many games offer this mechanism, allowing players to progress or gain a direct advantage over other players if they pay money. With people’s lower attention spans in this digital age, many have trouble mastering delayed gratification and putting time and effort into a game. Many companies develop P2W games, which could have an exploitative effect on certain individuals who have problems restraining themselves.
Implement preventative measures until everyone is in agreement
In the United States, the verdict on loot boxes is still out, making these virtual items a part of a legal gray zone until regulations are implemented at the state or federal level. Outside the US, most jurisdictions have ruled that loot boxes do not constitute gambling but that regulations should focus on stricter parental controls, putting responsibility on app stores like Google Play Store and Apple App Store and game developers.
One area where the laws are crystal clear is iGaming, the online casino industry, where real money gambling is heavily regulated for adults and minors. Most states that legalized online casinos have a minimum age of 21 years to register and play, along with a host of rules relating to preventing problem gambling, anti-money laundering, and overall safety of players. Some states, like Pennsylvania, require all licensed PA online casinos to have an Android or iOS casino app that fulfills the specific requirements in the respective app store. These rules are state-level and stipulated by the Pennsylvania Gaming Control Board (PAGCB). Such regulations encompass social responsibility through responsible gaming education and tools that can help players who may be at risk of developing problematic behaviors. The latest requirement from regulators in the Keystone State is that all mobile applications for Pennsylvania online casinos require Two-factor Authentication (2FA) to heighten the security of players’ accounts. Using 2FA also minimizes the risk of children accidentally logging into their parents’ accounts and accessing the games.
While politicians and lawmakers decide how to categorize and treat different practices used by game and app developers, they could educate and advise about responsible gaming and pressure Apple and Google to introduce stricter guidelines for app developers. This could include stricter parental controls and access, for example, usage of 2FA and requirements to set spending limits and time limits in games with microtransactions relating to P2W, loot boxes, and in-game items with real money value. Limits as such would allow adults to control their gaming behavior and limit their risk of developing gaming problems, which may adversely affect their lives financially, physically, or mentally. Prevention of addictive behaviors should and could be taken to higher levels in the gaming industry, reminiscent of what online gambling operators are forced to adhere to in states like Pennsylvania.