Game developers fined for loot box irregularities

News on 11 Apr 2018

Accusing three developers of deceiving customers about the odds used in their in-game loot boxes, the South Korean government’s Fair Trade Commission has imposed fines totalling almost a million dollars.

Loot boxes are the randomised “crates” of prizes and accessories that video game players can buy for real money, enhanced their chances in the game. They have been the subject of global debate regarding allegations that buying the crates is no different to gambling.

The most famous loot box dispute involved Electronic Arts last year, when the company’s Battllefront II launch was impacted by complaints that the loot boxes were overly aggressive and gave an unfair advantage. EA halted micro transactions whilst it overhauled its plans, and suffered some reputational and stock price damage. (see previous reports).

In the South Korean issues, the developers of top games like “Counter Strike Online 2” – Nexon Korea – was hit the hardest, with a fine of $890,000 regarding its promotional activity around loot boxes. The FTC accused the company of misleading players on the chances of winning specific prizes and didn’t properly inform customers of their right to withdraw in-game item purchases.

The remainder of the penalties were levied on NextFloor, which developed “Destiny Child” and “Ys Online” and NetMarble, creator of “Star Wars-Force Arena”.

The FTC directed all three companies to change the manner in which they promote and disclose loot box odds.

The fines in South Korea mark the highest ever levied against a local game company by the FTC there and could be part of a wider effort to regulate the sale of loot boxes, the Korean Herald points out.

Nexon Korea has announced that it disputes the FTC finding and intends to petition for a review of the issue.

Related and similar