The gaming industry has evolved rapidly in recent years, offering gamers an increasingly immersive and diverse experience. But with progress has come controversial practices, one of which has been loot boxes – paid randomized sets of in-game items. Critics have often compared them to gambling, fearing a negative impact on young people and accusing companies of unfairness.
In response to the public outcry, authorities in a number of countries announced the impending tightening of regulation of loot boxes. The pioneer was South Korea, presenting a package of new rules aimed at increasing the transparency of monetization mechanisms in games. These changes have the potential to fundamentally transform the industry, forcing companies to rethink their business models.
A new era in the gaming world is just around the corner. Honesty and accountability will be the key to trust between developers and players. While the transition period may be difficult, consumers will benefit in the long run by gaining access to fairer digital entertainment.
The origins of the problem and the reaction of the authorities
Lootboxes have long drawn criticism from players and human rights organizations. They have been accused of creating a gambling-like model, making them dangerous, especially for minors. Also, many companies misled players about the likelihood of getting valuable items from the lootboxes.
Obviously, gambling is adult entertainment and children need to stay as far away from it as possible. While an adult can register at 1win or create an account at another online casino and start playing for fun, a child’s psychological self-restraints usually fail and they can lose too much money.
However, many adults also face these problems, which has led to the spread of ludomania. But if the number of adults with problem gambling behavior – is only a few percent, then among children this problem is found everywhere. Therefore, lootboxes, the opening of which costs real money, and which are very similar to gambling, carry the same danger as any other gambling entertainment.
Under public pressure, authorities in a number of countries have begun to take action. South Korea was one of the first to announce upcoming legislative changes that will increase the transparency of loot boxes and protect the rights of consumers.
New transparency rules
As of March 22, 2024, new rules for gaming companies will come into effect in South Korea:
- Mandatory disclosure of the probabilities of various items falling out of loot boxes in mobile and online games;
- opening channels for refunds for in-game purchases within 30 days of game closure;
- introducing a system of direct compensation from companies to players for closed games without litigation;
- mandatory appointment of local representatives for foreign game companies.
Although the details of the innovations have not yet been disclosed, they will gradually be introduced into the relevant consumer protection laws.
More serious regulation is also being introduced in Europe. In particular in the UK or in Germany. Obviously, in the near future, it will be more difficult for developers to monetize their games in this way.
Impact on the gaming industry
The new rules will have a significant impact on the entire gaming industry:
- transparency of monetization mechanisms will increase, allowing players to make more informed choices about purchases;
- companies will have to rethink their business models based on aggressive monetization through loot boxes;
- alternative monetization methods, such as subscriptions or direct purchases of in-game content, are likely to grow in popularity;
- consumers will be more empowered to protect their interests when games are shut down.
In the coming era of digital entertainment, transparency, and honesty will be integral principles. The gaming industry will rise like a phoenix from the ashes of questionable practices to offer users a truly engaging and fair experience. The future of gaming is a symbiosis of creativity and responsibility, where everyone will find a path to their digital adventures.
