ESA president defends loot boxes, warns against government regulation

Entertainment Software Association president Michael Gallagher defended loot boxes during an address at the recent Nordic Game Conference, telling the audience (via GamesIndustry) that the effort to regulate them as a form of gambling "challenges our industry's freedom to innovate, and impairs our ability to continuously test new business models, which drive creativity and engagement with our audience." 

Gallagher said monetization mechanisms similar to loot boxes have existed in videogames for "a long time," a fact that individuals and agencies seeking to regulate them often aren't aware of. He also reiterated the opinion expressed by multiple game publishers that loot boxes cannot be legally defined as gambling because they always deliver something for the player's money. 

"When you look at the definitions of gambling throughout the world, and how this is done and how it's regulated in places like Las Vegas and the US, it's quite different to the mechanism with loot boxes in games," he said. "That conclusion has been reached—in other words, that this game mechanic is not gambling—by the Entertainment Software Ratings Board in the US, by New Zealand's gambling authority, and by the UK's gambling authority."

Despite overt challenges to that position in recent months by countries including Belgium and the Netherlands, Gallagher called for continued self-regulation rather than loot box legislation, pointing to the ESRB's relatively quick implementation of an "In-Game Purchases" label as evidence that the system works. 

"We can't go to the lowest common denominator of government around the world, and make that the standard the rest of the world has to live by, and limit the trajectory of the industry," Gallagher told the site. "That's not the best approach. Instead, we believe it's best to be clear about the facts, and make sure those carry the day around the world, so we drive an outcome that best extends the [games industry's] frontiers and looks after the interests of gamers." 

Despite the pushback against loot boxes from both government bodies and the general public, Gallagher's support for them is not at all unexpected. The ESA was formed in 1994 as the Interactive Digital Software Association, and serves as the trade association for the videogame industry in North America. It's also the parent company of the ESRB, and operates the E3 trade show.