Though the film and music industries have enjoyed significant surges in popularity thanks to the growth of streaming services like Netflix and Spotify, video games have quietly dominated the entertainment world in recent years. Video games generated $119.6 billion in revenue during 2018. Compare that to the global film box office’s haul of $47.1 billion and music’s $19.1 billion.
So what’s putting video gaming so far ahead of these other industries? For one, purchasing a video game is typically more expensive than seeing a film or listening to an album. But a significant factor in the growth of video gaming revenue is “loot boxes.”
Loot boxes are virtual items that players redeem for a randomized selection of in-game goodies, ranging from customizable outfits to game-changing weapons or power-ups. Loot boxes act, in essence, like a slot machine. Some games allow players to earn loot boxes through quality play, but many encourage players to purchase loot boxes with real money to gain access to cooler or superior items in the game. The digital technology forecaster Juniper Research estimates that loot boxes will rake in more than $50 billion by 2022.
Adults are free to make their own decisions with their money. If someone wants to spend hard-earned cash on a gamble for some colorful armor or powerful sword, that’s their choice. But the real concern is that loot boxes are grooming children, one of video gaming’s largest demographics, to become gamblers.
The digital marketplace has made it shockingly easy for children to spend money — not always their own — on loot boxes. Many games now require an online connection or access to a subscription service, like Xbox Live. Parents will put a credit card on file, which a child can then easily use to make additional purchases, including for loot boxes. Children, eager to get the latest and coolest items, will keep pulling the proverbial lever, spending money each time. And many kids are unaware of the consequences.
Several years ago, actor and comedian Jack Black shared a story about how his son spent over $3,000 on loot boxes using credit card information that Mr. Black had used to purchase a mobile game. For a high-earning celebrity like Mr. Black, that’s frustrating. For most parents, however, paying for such an indiscretion could be devastating.
The issue came onto Congress’ radar earlier this year. Sen. Josh Hawley, R-Mo., introduced in May a bill with bipartisan support that would ban loot boxes in “games played by minors.” Mr. Hawley’s pressure already motivated the gaming industry to discuss self-regulation, but more stringent rules will likely be necessary. Congress has had its attention focused elsewhere in recent months, but Mr. Hawley should press the issue.
Parents throughout the country bought lots of consoles and video games this holiday season. They shouldn’t have to worry that their gifts will help groom their children to make irresponsible and risky money decisions.
First Published: January 7, 2020, 11:15 a.m.
