Microtransactions in games and apps have proven to be highly profitable for gaming companies. DLCs, loot boxes, and in-game items generate significant revenue, but they can also lead players towards addictive and problematic behaviors. Over the past decade, this industry has surpassed the combined revenues and profits of the music and film industries.
The Value of Game Items and Skins
Often, in-game items and skins hold monetary value outside the game. This has led to investigations and increased scrutiny from legislators and the general public. Politicians, behavior experts, gamers, and parents have called for stricter regulations to curb the exploitative nature of these microtransactions and related content, common in Android and iOS apps.
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Pay-to-Win (P2W)
While loot boxes have been under scrutiny in recent years, an area gaining more attention is Pay-to-Win (P2W). Many games offer this option, allowing players to advance or gain advantages over others by paying with real money. With people’s reduced attention spans in this digital age, many struggle to resist immediate gratification and to dedicate time and effort to a game. Many companies develop P2W games, which can be exploitative for individuals with self-control difficulties.
Addictive and Problematic Behaviors in Gaming Apps, Implementing Preventive Measures Until Consensus is Reached
In the United States, there has yet to be a final decision on loot boxes, placing these virtual items in a legal gray area until regulations are implemented at the state or federal level. Outside the US, most jurisdictions consider loot boxes not to be gambling. They advocate for stricter parental controls, assigning responsibility to app stores like Google Play Store and Apple App Store, as well as game developers.
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Clear Regulations in iGaming Industry
A clear-cut area in terms of regulation is the iGaming industry, the online casino gaming sector, which is heavily regulated for both adults and minors. The vast majority of legalized online casinos set a minimum age of 21 for playing, along with a set of rules to prevent gambling problems, combat money laundering, and ensure player safety. Some states, like Pennsylvania, require all licensed online casinos to offer an Android or iOS casino app that meets specific app store requirements.
These state rules are set by the Pennsylvania Gaming Control Board (PAGCB) and include awareness measures and responsible gaming tools to aid players at risk of developing addictive and problematic behaviors. The latest requirement from state regulators is for all mobile apps for online casinos in Pennsylvania to have two-factor authentication (2FA) to enhance player account security. The use of 2FA also reduces the risk of children inadvertently logging into their parents’ accounts and accessing games.
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Emphasizing Education and Counseling – Addictive and Problematic Behaviors in Gaming Apps
While politicians and lawmakers are still deliberating on how to classify and address the various practices used by game and app developers. They could emphasize education and counseling on responsible gaming and urge Apple and Google to establish stricter guidelines for app developers. This could involve tighter parental controls and more controlled access, such as the use of 2FA and setting spending and time limits for games with microtransactions related to P2W, loot boxes, and in-game items with real monetary value.
These limits would enable adults to control their gaming behavior and reduce the risk of developing gambling problems, which can have negative financial, physical, and mental impacts. Preventing gaming addiction can and should be a greater focus of the gaming industry. Following the example of what is required of online gambling operators in states like Pennsylvania.
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