ESA chief defends loot boxes, warns against government “over-reaction”

overwatch loot box

In the wake of increased legal scrutiny over blind loot boxes in games, Entertainment Software Association president Mike Gallagher says the games industry should maintain its right to regulate itself without bending to government pressure.

Speaking at the Nordic Games Conference, Gallagher defended loot boxes as a business practice that allows game publishers to react quickly to the changing marketplace. He mentioned the recent push by governments in Belgium and the Netherlands to regulate loot boxes by classifying them as gambling, which Gallagher said limits the “ability to continuously test new business models, which drive creativity and engagement with our audience.”

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Gallagher was adamant that loot boxes are not gambling, because the goods found in them can’t be “withdrawn” as real-world cash, at least not by means of game clients on their own. But Belgian authorities disagree.

In April, the Belgian Gaming Commission ruled that Overwatch, FIFA 18, and Counter-Strike: Global Offensive all ran afoul of the country’s gambling laws. The Dutch Gambling Authority, meanwhile, has given games an eight-week deadline to make changes to their loot boxes or face fines. Holland’s regulators would like to see European Union-wide rules governing loot boxes.

However, Gallagher pointed out, the American ESRB and New Zealand’s gambling authority have both ruled that blind loot boxes do not constitute gambling.

Gallagher that industry leaders need to work to educate policy makers on existing tools available to protect minors and players in general from predatory practices. Companies that do the right thing, he says, will be rewarded with increased business, while those that engage in predatory or questionable practices will be punished by the market.

“Let’s inform first, continue to self-regulate, and move ahead that way,” Gallagher said. “It’s worked great for us over the last 20 years.”