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Electronic Arts’ in-game transactions and ‘loot boxes’ under scrutiny as California gamers launch class action suit

More than 100 gamers are suing EA sports over 'loot boxes' used in the Ultimate Team game mode, part of games such as Madden NFL and the FIFA soccer franchise.

Electronic Arts Inc. - Electronic Arts’ in-game transactions and ‘loot boxes’ under scrutiny as California gamers launch class action suit

Electronic Arts Inc (NASDAQ:EA) is reportedly the subject of a class action lawsuit in California with more than 100 gamers seeking damages of US$5mln.

The basis of the suit is the claim that ‘loot boxes’ contained within EA Sports ‘Ultimate Team’ game mode, most popular within the FIFA 19 and Madden NFL, are a form of gambling and are illegal.

Lead plaintiff Kevin Ramirez, who says he spent US$600 on Ultimate Team items since 2011, filed the suit on August 13.

The suit claims that Ultimate Team use of ‘loot boxes’ are “are predatory and designed to entice gamers to gamble.”

It alleges that EA “relies on creating addictive behaviors in consumers to generate huge revenues”.

“EA’s Ultimate Team Packs are Loot Boxes. Buying the Packs are nothing more than a gambling bet,” the suit claims.

The legal claim of US$5mln belies the potential scale of the threat to the wider monetisation model used in contemporary games which are designed and developed to operate as ‘live’ and continuous gaming platforms, increasingly reliant upon in-game transactions.

EA saw digital revenue streams, comprising game downloads and in-game transactions, surge above US$4bn during the months of COVID-19 lockdown.

In-game monetisation through the sale of ‘loot boxes’ and other download content items is seen as important and increasingly a core part of the commercial model for video games, especially for sports based games, where the primary elements of gameplay remain largely constant from one year to another.

Such transactions are deeply designed into the fabric of certain game modes.

In the case of Ultimate Team - a game mode in both the Madden NFL and FIFA soccer franchises – gamers begin with a base squad of ‘bronze’ level (average-to-mediocre) players and then through gameplay challenges and tournaments upgraded players can become available.

Gamers can, however, skip over the arduous grind of unlocking premium players for their squads by paying for ‘packs’ (more generically known across the industry as ‘loot boxes’) which provide a randomised allocation of players and other gameplay related items.

Game developers, such as EA, sell different versions of these packs across price tiers, which purport to vary the probability that the gamer will receive premium level players or items.

Within EA’s Ultimate Team, meanwhile, there’s a secondary market within which gamers can trade the individual players and items (acquired either by pay or play) for in-game (non-monetary) currency.

EA’s use of ‘loot boxes’ and microtransactions has been scrutinised previously, as have other similar commercial practices and methods in other games by other game studios – Candy Crush, Angry Birds and perhaps most famously Fortnite have all been under the microscope at one time or another.

Typically, the scrutiny has been triggered by examples of excessive spending among young players (typically on their parents’ credit cards).

EA has previously defended its Ultimate Team transactions saying that gamers are guaranteed to receive items from a loot box, so they do not constitute gambling.

Last year, amid pressure across the industry, games console makers Nintendo, Sony, and Microsoft required games developers to display the odds of obtaining virtual items in the digital store front.

In an example for FIFA Ultimate Team, EA notes that a ‘Premium Gold Pack’ will have 100% chance of containing a ‘Gold 75+’ rated player, an 18% chance of containing a ‘Gold 82+’ rated player and a 4.2% chance of containing a ‘Gold 84+’ rated player.

For context, that means there’s a 100% chance of getting a player at or above the level of Newcastle’s Andy Carroll or Watford’s Tom Cleverly, but only 4.2% chance of getting a player of at least the level of Manchester United’s Bruno Fernandes or Crystal Palace’s Wilfired Zaha.

EA’s website meanwhile adds “pack probabilities in FIFA are calculated by simulating the opening of a very large number of packs for each pack in the store.

“The number of packs opened in a simulation varies based on rarity, but it will always be enough to be statistically valid.”

A ‘Premium Gold Pack’ contains 12 items and are priced at 150 FIFA Points – 1,600 points cost around £11.99 or 1,050 for £7.99 or 500 for £3.99.

Quick facts: Electronic Arts Inc.

Price: 127.24 USD

NASDAQ:EA
Market: NASDAQ
Market Cap: $36.42 billion
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