There are really only two big news stories from the last week in gaming business. The biggest story is the ongoing lootbox controversy and the fact that 16 countries have now signed a declaration to investigate lootboxes and skin gambling, and news on the Chinese regulation of new games entering the market is grim as it looks like it could continue for some time to come. Plus, there’s a surprise in this week’s UK gaming charts as an MMORPG that is several years old enters the top 10. Find all of that below in this week’s MMO Money.
China’s Freeze on New Games May Continue Another 4-6 Months
There’s more bad news this week for Tencent and in fact, any game company hoping to break into the Chinese games market from outside of China. It looks as though the government mandated freeze on new games may continue another 4-6 months. It began in March as the government announced they would be implementing new procedures and systems for games entering their market but these things take time to create. In the meantime, there has been a massive reduction in the number of new foreign made games released in China. Part of the reason they’ve cited for not approving new games has been a recommendation from the Ministry of Education who suggest that limiting games and the amount of time young people can play them may reduce child myopia. This, despite there being no scientific proof that looking at a screen all day causes myopia.
So far this hasn’t had a massive impact on larger publishers like Tencent and Netease. Yes, Tencent lost billions in its market value, but it still only amounted to a small percentage of their worth. Larger companies like this will have had permission for games well in advance of their release and they’re still banking on those, but the longer this hold continues the fewer games they will have left to release in China. That lack of growth will end up impacting the bottom line of these companies in a big way. The Chinese market is already starting to feel the effects too, as market growth is down to just 5% from 30% at the same time last year.
This week The Elder Scrolls Online was the big surprise on the charts. It entered the charts at number 8 ahead of the release of their latest DLC Murkmire. At the same time, GTA V has dropped down a few places to number 6. PUBG was also pushed down to 11 from 9. Ultimately, Spider-Man managed to keep the number one spot for another week, which isn’t surprising at all given how universally loved it is. Check out the full top 10 below.
|This Week||Game||Last Week|
|2||Shadow of the Tomb Raider||New Entry|
|3||NBA 2K19||New Entry|
|4||Crash Bandicoot: N.Sane Trilogy||5|
|5||Mario Kart 8: Deluxe||7|
|6||Grand Theft Auto V||3|
|8||The Elder Scrolls Online||New Entry|
|9||LEGO The Incredibles||10|
|10||Super Mario Odyssey||15|
Just when it seemed like we might be able to stop talking about lootboxes because news was slowing to a complete standstill on that front, it jumps back up to be the center of attention again. Since the last MMO Money was released, we’ve had three different stories coming from Europe about lootboxes.
The first one is actually a continuation from last week. Belgium has officially started criminal investigations into EA’s noncompliance with the country’s gambling laws. EA has continued to maintain that lootboxes aren’t gambling, which seems like a pretty massive gamble on EA’s part. We’ll just have to wait and see how things turn out in Belgium.
Just a couple of days later researchers in the UK identified a link between lootboxes and gambling. They surveyed adults playing 10 major games with lootboxes and found there is an important relationship between problem gambling and the use of lootboxes. The more severe a participant’s gambling problem, the more money they spent on lootboxes. They also go on to say the following:
“However, regardless of the direction of causality, the games industry faces a crisis of conscience. Industry bodies such as the ESRB can no longer claim that there is little evidence of a link between problem gambling and loot box use. We call on individual companies within the games industry to remove loot boxes from their products. When companies include loot boxes in their games, our results suggest that they are either profiting from problem gambling or causing problem gambling. Loot boxes have no place in video gaming culture. We also follow Drummond and Sauer in recommending that ratings agencies incorporate additional parental advisories into games that feature loot boxes. We recommend that games with loot boxes are restricted to players of legal gambling age. Given the severity of the link seen here we also strongly recommend that relevant authorities restrict access to loot boxes as if they were a form of gambling.”
Your move EA.
Finally, 15 member nations of the 2018 Gambling Regulators European Forum signed a declaration in which they expressed concern over third-party game related betting and skin-gambling sites, as well as the potential for lootbox models to bleed over into legitimate gambling. This is mostly a declaration stating that they intend to begin investigating lootbox regulation. The declaration was signed by the 15 nations that take part in the forum, which are Austria, Czech Republic, France, Gibraltar, Ireland, Isle of Man, Jersey, Latvia, Malta, The Netherlands, Norway, Poland, Portugal, Spain, Washington State, and the UK. Finland also joined in the signing of this declaration, though they aren’t involved in the forum. This could represent a major shift in lootbox regulation just as it seemed like the whole issue was dying out. It’s going to be interesting watching this story develop over the coming months, and could finally mean the big change so many consumers have been hoping for. Everyone cross your fingers!
And no, I don’t know why the United States has a representative on the Gambling Regulators European Forum, I’m still trying to work that out myself.
Related: Business, China, Column, EA, Financials, Gambling, Grand Theft Auto Online, Loot Boxes, MMO Money, Tencent, The Elder Scrolls Online