Loot boxes in games are gambling and should be banned for kids, say UK MPs – gpgmail


UK MPs have called for the government to regulate the games industry’s use of loot boxes under current gambling legislation — urging a blanket ban on the sale of loot boxes to players who are children.

Kids should instead be able to earn in-game credits to unlock look boxes, MPs have suggested in a recommendation that won’t be music to the games industry’s ears.

Loot boxes refer to virtual items in games that can be bought with real-world money and do not reveal their contents in advance. The MPs argue the mechanic should be considered games of chance played for money’s worth and regulated by the UK Gambling Act.

The Department for Digital, Culture, Media and Sport’s (DCMS) parliamentary committee makes the recommendations in a report published today following an enquiry into immersive and addictive technologies that saw it take evidence from a number of tech companies including Fortnite maker Epic Games; Facebook-owned Instagram; and Snapchap.

The committee said it found representatives from the games industry to be “wilfully obtuse” in answering questions about typical patterns of play — data the report emphasizes is necessary for proper understanding of how players are engaging with games — as well as calling out some games and social media company representatives for demonstrating “a lack of honesty and transparency”, leading it to question what the companies have to hide.

“The potential harms outlined in this report can be considered the direct result of the way in which the ‘attention economy’ is driven by the objective of maximising user engagement,” the committee writes in a summary of the report which it says explores “how data-rich immersive technologies are driven by business models that combine people’s data with design practices to have powerful psychological effects”.

As well as trying to pry information about of games companies, MPs also took evidence from gamers during the course of the enquiry.

In one instance the committee heard that a gamer spent up to £1,000 per year on loot box mechanics in Electronic Arts’s Fifa series.

A member of the public also reported that their adult son had built up debts of more than £50,000 through spending on microtransactions in online game RuneScape. The maker of that game, Jagex, told the committee that players “can potentially spend up to £1,000 a week or £5,000 a month”.

In addition to calling for gambling law to be applied to the industry’s lucrative loot box mechanic, the report calls on games makers to face up to responsibilities to protect players from potential harms, saying research into possible negative psychosocial harms has been hampered by the industry’s unwillingness to share play data.

“Data on how long people play games for is essential to understand what normal and healthy — and, conversely, abnormal and potentially unhealthy — engagement with gaming looks like. Games companies collect this information for their own marketing and design purposes; however, in evidence to us, representatives from the games industry were wilfully obtuse in answering our questions about typical patterns of play,” it writes.

“Although the vast majority of people who play games find it a positive experience, the minority who struggle to maintain control over how much they are playing experience serious consequences for them and their loved ones. At present, the games industry has not sufficiently accepted responsibility for either understanding or preventing this harm. Moreover, both policy-making and potential industry interventions are being hindered by a lack of robust evidence, which in part stems from companies’ unwillingness to share data about patterns of play.”

The report recommends the government require games makers share aggregated player data with researchers, with the committee calling for a new regulator to oversee a levy on the industry to fund independent academic research — including into ‘Gaming disorder‘, an addictive condition formally designated by the World Health Organization — and to ensure that “the relevant data is made available from the industry to enable it to be effective”.

“Social media platforms and online games makers are locked in a relentless battle to capture ever more of people’s attention, time and money. Their business models are built on this, but it’s time for them to be more responsible in dealing with the harms these technologies can cause for some users,” said DCMS committee chair, Damian Collins, in a statement.

“Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the Government to explain why loot boxes should be exempt from the Gambling Act.

“Gaming contributes to a global industry that generates billions in revenue. It is unacceptable that some companies with millions of users and children among them should be so ill-equipped to talk to us about the potential harm of their products. Gaming disorder based on excessive and addictive game play has been recognised by the World Health Organisation. It’s time for games companies to use the huge quantities of data they gather about their players, to do more to proactively identify vulnerable gamers.”

The committee wants independent research to inform the development of a behavioural design code of practice for online services. “This should be developed within an adequate timeframe to inform the future online harms regulator’s work around ‘designed addiction’ and ‘excessive screen time’,” it writes, citing the government’s plan for a new Internet regulator for online harms.

MPs are also concerned about the lack of robust age verification to keep children off age-restricted platforms and games.

The report identifies inconsistencies in the games industry’s ‘age-ratings’ stemming from self-regulation around the distribution of games (such as online games not being subject to a legally enforceable age-rating system, meaning voluntary ratings are used instead).

“Games companies should not assume that the responsibility to enforce age-ratings applies exclusively to the main delivery platforms: All companies and platforms that are making games available online should uphold the highest standards of enforcing age-ratings,” the committee writes on that.

“Both games companies and the social media platforms need to establish effective age verification tools. They currently do not exist on any of the major platforms which rely on self-certification from children and adults,” Collins adds.

During the enquiry it emerged that the UK government is working with tech companies including Snap to try to devise a centralized system for age verification for online platforms.

A section of the report on Effective Age Verification cites testimony from deputy information commissioner Steve Wood raising concerns about any move towards “wide-spread age verification [by] collecting hard identifiers from people, like scans of passports”.

Wood instead pointed the committee towards technological alternatives, such as age estimation, which he said uses “algorithms running behind the scenes using different types of data linked to the self-declaration of the age to work out whether this person is the age they say they are when they are on the platform”.

Snapchat’s Will Scougal also told the committee that its platform is able to monitor user signals to ensure users are the appropriate age — by tracking behavior and activity; location; and connections between users to flag a user as potentially underage. 

The report also makes a recommendation on deepfake content, with the committee saying that malicious creation and distribution of deepfake videos should be regarded as harmful content.

“The release of content like this could try to influence the outcome of elections and undermine people’s public reputation,” it warns. “Social media platforms should have clear policies in place for the removal of deepfakes. In the UK, the Government should include action against deepfakes as part of the duty of care social media companies should exercise in the interests of their users, as set out in the Online Harms White Paper.”

“Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of the Speaker of the US House of Representatives, Nancy Pelosi,” adds Collins.


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EA Receives Guinness World Record for Most Downvoted Comment in History


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The Guinness Book of World Records has given EA a prestigious award in its annals of history. A sharp-eyed Redditor noticed the award, given to the video game publisher for one of its initial responses to the Star Wars Battlefront II loot crate controversy.

Redditor Amsha posted the following image, taken from the latest version of the book:

LootCrateControversy

The original comment in question is reprinted below:

The intent is to provide players with a sense of pride and accomplishment for unlocking different heroes.

As for cost, we selected initial values based upon data from the Open Beta and other adjustments made to milestone rewards before launch. Among other things, we’re looking at average per-player credit earn rates on a daily basis, and we’ll be making constant adjustments to ensure that players have challenges that are compelling, rewarding, and of course attainable via gameplay.

We appreciate the candid feedback, and the passion the community has put forth around the current topics here on Reddit, our forums and across numerous social media outlets.

Our team will continue to make changes and monitor community feedback and update everyone as soon and as often as we can.

On its face, this comment doesn’t deserve to have 667,821 downvotes (the next-most downvoted comment on Reddit, to give this some scale, has just 88,892 downvotes). A little context is in order.

This comment was dropped in a thread where players were expressing unhappiness about the amount of time it was going to take to unlock heroes in Star Wars Battlefront II. Players who had bought the Deluxe Edition of the game were angry that certain core heroes like Darth Vader were going to be locked by default and require a long grind to purchase. Players calculated that it could take up to 40 hours of play to unlock a single hero under EA’s proposed loot crate system.

Battlefront II’s loot crate system was infamously bad. Players earned currency at a snail’s pace and virtually all game advancement was tied to loot crates. The contents of loot crates, however, were entirely random. There was no way to spend time in a specific game mode to unlock features, weapons, or abilities — you might spend 12 hours playing in one mode and earn rewards for a class you didn’t use or a game mode you didn’t play. EA’s defense of this system as “providing heroes with a sense of pride and accomplishment” was seen as a slap in the face to the community and a laughable insult to its intelligence.

They weren’t wrong. EA tried to hold the line on these decisions until Disney executives forced the company to pull the loot crate system just hours before launch. Now, the entire event — and EA’s worst-in-class loot box system — are recorded for posterity.

Hopefully, the executives in question get complementary copies of the tome. They could keep them on their desks as a reminder of what happens when greed and hubris overpower good game design. The reason I’m willing to frame the issue so bluntly is specifically that the entirely randomized nature of the loot crate system EA was poised to implement was obviously terrible to anyone who spent even a few minutes contemplating the question. Making your loot random and tying all loot into a loot crate mechanism is a terrible way to reward players. Most games tie at least some rewards directly to the core gameplay loot because players like to be rewarded for content they are running as opposed to receiving rewards that may have nothing to do with the parts of the gameSEEAMAZON_ET_135 See Amazon ET commerce they enjoy playing.

EA hasn’t stopped trying to argue that its conduct in these events was blameless; the company took substantial heat earlier this year for describing its game mechanisms as ‘Quite ethical surprise mechanics.’ Thus far, neither the public nor legislators investigating whether loot boxes are equivalent to gambling have been willing to buy what the company is selling.

Now Read:




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Mobile gaming is a $68.5 billion global business, and investors are buying in – gpgmail


By the end of 2019, the global gaming market is estimated to be worth $152 billion with 45% of that, $68.5 billion, coming directly from mobile games. With this tremendous growth (10.2% YoY to be precise) has come a flurry of investments and acquisitions, everyone wanting a cut of the pie. In fact, over the last 18 months, the global gaming industry has seen $9.6 billion in investments and if investments continue at this current pace, the amount of investment generated in 2018-19 will be higher than the 8 previous years combined.

What’s interesting is why everyone is talking about games and who in the market is responding to this and how.

The gaming phenomenon 

Today, mobile games account for 33% of all app downloads, 74% of consumer spend, and 10% of all time spent in-app. It’s predicted that in 2019, 2.4 billion people will play mobile games around the world – that’s almost one third of the global population. In fact, 50% of mobile app users play games, making this app category as popular as music apps like Spotify and Apple Music and second only to social media and communications apps in terms of time spent.

In the US, time spent on mobile devices has also officially outpaced that of television – with users spending 8 more minutes per day on their mobile devices. By 2021, this number is predicted to increase to over 30 minutes. Apps are the new primetime and games have grabbed the lion’s share.

Accessibility is the highest it’s ever been as barriers to entry are virtually non-existent. From casual games to the recent rise of the wildly popular hyper-casual genre of games which are quick to download, easy to play, and lend themselves to being played in short sessions throughout the day, games are played by almost every demographic stratum of society. Today, the average age of a mobile gamer is 36.3 (compared with 27.7 in 2014), the gender split is 51% female, 49% male, and one-third of all gamers are between the ages of 36-50. A far cry from the traditional stereotype of a ‘gamer’.

With these demographic, geographic, and consumption sea-changes in the mobile ecosystem and entertainment landscape, it’s no surprise that the game space is getting increased attention and investment, not just from within the industry, but more recently from traditional financial markets and even governments. Let’s look at how the markets have responded to the rise of gaming.

Image courtesy of David Maung/Bloomberg via Getty Images

Games on Games 

The first substantial investments in mobile gaming came from those who already had a stake in the industry. Tencent invested $90M in Pocket Gems and$126M in Glu Mobile (for a 14.6% stake), gaming powerhouse Supercell invested $5M in mobile game studio Redemption Games, Boom Fantasy raised $2M from ESPN and the MLB and Gamelynx raised $1.2M from several investors – one of which was Riot Games. Most recently, Ubisoft acquired a 70% stake in Green Panda Games to bolster its foot in the hyper-casual gaming market.

Additionally, bigger gaming studios began to acquire smaller ones. Zynga bought Gram Games, Ubisoft acquired Ketchapp, Niantic purchased Seismic Games, and Tencent bought Supercell (as well as a 40% stake in Epic Games). And the list goes on.

Wall Street wakes up

Beyond the flurry of investments and acquisitions from within the game industry, games are also generating huge amounts of revenue. Since launch, Pokemon Go has generated $2.3B in revenue and Fortnite has amassed some 250M players. This is catching the attention of more traditional financial institutions, like private equity firms and VCs, who are now looking at a variety of investment options in gaming – not just of gaming studios, but all those who had a stake in or support the industry.

In May 2018, hyper-casual mobile gaming studio Voodoo announced a $200M investment from Goldman Sachs’ private equity investment arm. For the first time ever, a mobile gaming studio attracted the attention of a venerable old financial institution. The explosion of the hyper-casual genre and the scale its titles are capable of achieving, together with the intensely iterative, data-driven business model afforded by the low production costs of games like this, were catching the attention of investors outside of the gaming world, looking for the next big growth opportunity.

The trend continued. In July 2018, private equity firm KKR bought a $400M minority stake in AppLovin and now, exactly one year later Blackstone announced their plan to acquire mobile ad-network Vungle for a reported $750M. Not only is money going into gaming studios, but investments are being made into companies whose technology supports the mobile gaming space. Traditional investors are finally taking notice of the mobile gaming ecosystem as a whole and the explosive growth it has produced in recent years. This year alone mobile games are expected to generate $55B in revenue so this new wave of investment interest should really come as no surprise.

A woman holds up her cell phone as she plays the Pokemon Go game in Lafayette Park in front of the White House in Washington, DC, July 12, 2016. (Photo: JIM WATSON/AFP/Getty Images)

Government intervention

Most recently, governments are realizing the potential and reach of the gaming industry and making their own investment moves. We’re seeing governments establish funds that support local gaming businesses – providing incentives for gaming studios to develop and retain their creatives, technology, and employees locally – as well as programs that aim to attract foreign talent.

As uncertainty looms in England surrounding Brexit, France has jumped on the opportunity with “Join the Game”. They’re painting France as an international hub that is already home to many successful gaming studios, and they’re offering tax breaks and plenty of funding options – for everything from R&D to the production of community events. Their website even has an entire page dedicated to “getting settled in France”, in English, with a step-by-step guide on how game developers should prepare for their arrival.

The UK Department for International Trade used this year’s Game Developers Conference as a backdrop for the promotion of their games fund – calling the UK “one of the most flourishing game developing ecosystems in the world.” The UK Games Fund allows for both local and foreign-owned gaming companies with a presence in the UK to apply for tax breaks. And ever since France announced their fund, more and more people have begun encouraging the British government to expand their program saying that the UK gaming ecosystem should be “retained and enhanced”. But, not only does the government take gaming seriously, the Queen does as well. In 2008, David Darling the CEO of hyper-casual game studio Kwalee was made a Commander of the Order of the British Empire (CBE) for his services to the games industry. CBE is the third-highest honor the Queen can bestow on a British citizen.

Over to Germany, and the government has allocated 50M euros of its 2019 budget for the creation of a games fund. In Sweden, the Sweden Game Arena is a public-private partnership that helps students develop games using government-funded offices and equipment. It also links students and startups with established companies and investors. While these numbers dwarf the investment of more commercial or financial players, the sudden uptick in interest governments are paying to the game space indicate just how exciting and lucrative gaming has become.

Support is coming from all levels

The evolution of investment in the gaming space is indicative of the stratospheric growth, massive revenue, strong user engagement, and extensive demographic and geographic reach of mobile gaming. With the global games industry projected to be worth a quarter of a trillion dollars by 2023, it comes as no surprise that the diverse players globally have finally realized its true potential and have embraced the gaming ecosystem as a whole.


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