Tech companies in hot water over “loot boxes”

Opening a loot box in FIFA 13. (Photo Source: arstechnica.com)

What do Google, Apple, and EA Sports all have in common? They are each being sued over their use of “loot boxes.” Before we get into the lawsuit against each company, it may be helpful to define what a loot box is. Loot boxes are in-game options that allow users to purchase a randomized group of virtual items – sort of like a mystery box. Loot boxes can, but sparingly, have rare items that are difficult to obtain. On the other hand, loot boxes tend to have common items that the user may already own.

EA Sports, a subdivision of Electronic Arts, develops and releases sports video games every year. Some of their most notable games are: FIFA, NHL, NBA LIVE, and Madden NFL. In FIFA and Madden, there is a game mode called “Ultimate Team.” This mode allows you to create your dream team to play with based on the cards you collect. Loot boxes offer a great way to earn a Joe Montana card for your Madden Ultimate Team. Most of the time, however, loot boxes are just a slim chance at winning a legendary card. Instead of winning Joe Cool, you end up with Gardner Minshew II as your quarterback. Keven Ramirez, the plaintiff in the class action lawsuit filed in the Northern District of California, is alleging that EA Sports’s Ultimate Team breaks California’s gambling law.

The complaint alleges that EA Sports “relies on creating addictive behaviors in consumers.” The complaint goes on to claim that the loot boxes are nothing more than a gambling bet, similar to spinning a slot machine. It can promise big, but it rarely delivers. Ramirez claims he was induced to spend over $600 on loot boxes alone in FIFA and Madden since 2011. In the United States, there is no consensus on whether loot boxes are equivalent to gambling. However, Ramirez’s complaint seems to be taking a page out of Belgium’s book. In April 2018, the Belgian Gaming Commission found that EA’s loot boxes constituted gambling. The Commission even went as far as recommending criminal prosecution against companies that continued to sell loot boxes. As a result, EA Sports removed loot boxes from their FIFA games in Belgium. It seems that Mr. Ramirez is hoping for the legislature to take that same stance here, or, at a minimum, force EA to voluntarily remove loot boxes.

The same firm representing Mr. Ramirez even brought similar class action lawsuits against Apple and Google. The lawsuits, both brought in federal court in California, allege that users of the Apple App store and the Google Play Store have been allowed to engage in illegal gambling through mobile games. Similar to EA Sports, some games on the respective App Stores allow for in-app purchases. Some of these in-app purchases include the option for loot boxes. Despite not creating the games that allow for in-app loot box purchases, the complaint alleges that Apple and Google both benefit heavily from the increased revenue as a result. The lawsuits allege that loot boxes rely on the psychology of gambling. This includes a build-up of anticipatory music, flashing lights, and some games even providing a disappointing sound.

While it is unclear how a judge will rule on these cases, it is clear that Mr. Martinez, the Law Offices of Andrew J. Brown, and Blood Hurst & O’Reardon, LLP are determined to stop companies from offering consumers loot boxes. Whether they succeed in their lawsuits or will need to lobby legislators, only time will tell. Until then, best of luck to everyone buying loot boxes. I hope you find your game’s Joe Montana.

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