Some games use virtual currency but lawsuits and ongoing disputes are over real money transactions. Real money transactions are known as “micro-transactions” and “in-app purchases.”
Loot boxes produce a growing revenue stream for game developers and the platforms on which they are sold. Google Play and the Apple App Store receive an estimated 30% of the in-app purchase amount. Loot boxes generated up to $40 billion in 2018, this amount is estimated to increase to $50 billion by 2022.
The loot box controversy
The Federal Trade Commission (FTC) is reviewing the matter of microtransactions and the implications of video game loot boxes. The FTC is working with content creators and the platforms they use to encourage more self-regulation but is also considering the development of regulations surrounding loot boxes.
The game industry recently implemented the Entertainment Software Rating Board (“ESRB”) rating system, and are asking for in disclosures of in-game purchase odds and parental control features.
