ESRB Launches New Warning Label for Video Game Loot Boxes

The move by the ESRB follows a wave of scrutiny by regulators and lawmakers regarding the legality of in-game elements such as loot boxes. Critics contend that loot boxes and similar elements that require players to pay for a chance to obtain a valuable digital good or premium (with the exact item often unknown until after purchase) may be misleading or deceptive to consumers, particularly young consumers. There are also concerns that they may violate state lottery laws, which typically restrict the presence of a payment where there is a chance element present to receive a reward.

Moving forward, ESRB is requiring games that include loot boxes and similar items to display a label that states: “In-Game Purchases (Includes Random Items).” This extended transparency measure is intended to place consumers (or their parents) on notice when a game offers the ability to use real-world money to purchase randomized items in video games. While ESRB’s ratings and labeling system is voluntary, all console manufacturers, as well as certain US retailers and mobile or online storefronts, require ESRB ratings for the games or apps they offer.

The new label supplements the original “In-Game Purchases” notice that the ESRB put into place in 2018. While the “In-Game Purchases” notice is intended to inform consumers and parents when a game offers the ability to purchase additional items without leaving the game, the new label—“In-Game Purchases (Includes Random Items)”—is intended for use with the subset of games that include loot boxes and other features where the digital good or premium is unknown at the time of purchase and determined by chance.

As loot boxes continue to draw intense scrutiny from regulators and lawmakers, game developers should take steps to ensure in-game offers, marketing materials, and product labels clearly communicate the terms of any offer. For loot boxes, this includes disclosing the odds of receiving advertised or valuable items. While the ESRB’s new label may help reduce the risk of regulatory scrutiny, it likely will not be sufficient on its own. For assistance complying, reach out to Arent Fox’s Advertising & Promotions team.