Video games are one of the most popular forms of recreation, and the United States has the largest video game market in the world. In 2023, the estimated value of video games is expected to reach over $56 billion. Fortnite is one of the most successful video games in history, with over 400 million registered players. The company behind Fortnite, Epic Games, rakes in billions of dollars annually. Last year alone, they made over $6 billion. But as with most success stories, they have a couple of skeletons in their closet. When these dark sides come to light, they shed light on the ethical shortcomings of the video game industry and its need for regulations.
iGaming Makes Strong Case for Regulating Monetization in Gaming
A Powerful Example of The Needs For Regulation
Earlier this year, the Federal Trade Commission (FTC) slammed Epic Games with $245 million in fines. These fines result from court procedures where the FTC brought forward charges related to children’s privacy and a $520 million settlement. Besides fines, FTC requires that Epic Games discontinue its use of design tricks that confuse players about digital purchases. They need to obtain express consent for digital purchases and prohibit the company from locking players’ accounts that dispute wrongful charges for digital products.
Unscrupulous Business Models That Require Regulations Similar to the iGaming Industry
The debacle is an important reminder that private corporations cannot go unchecked. If renowned, trusted actors can actively exploit customers, only the government can stop them.
Epic Games are not alone in cultivating a culture where players feel obliged to buy in-game items and skins. In-game purchases and freemium models are common in video games. These types of business models are inherently abusive. It is not difficult to draw parallels to the online gambling industry, which similarly employs game mechanics and incentives that effectively makes players lose money. The difference between that industry, called iGaming, is that online gambling operators in the US are under strict obligation to comply with local regulations. Within the iGaming industry, all incentives for applying shady business tactics are removed by regulations. As a result, misconduct is easier to identify and penalize. In extreme cases, penalties can force the gambling operator to close their operations.
How Video Game Regulations Could Look Like
The government can provide a moral compass to prohibit corporations from making unethical decisions. Regulations, as with the iGaming industry, discourage these abusive business models. For example, rules from the US government could require regular disclosure of how much a player spent on in-game purchases, requirements for intrusive pop-ups before purchasing, and even putting limits on micropayments entirely. One page the video game industry could take from iGaming regulations is to allow players to set their own rules and limitations when they create their accounts. Such limits could include how much they are comfortable spending weekly, monthly, and yearly. Once a limit is reached, they cannot spend more on digital purchases.
There are many ways to go about it, but if Epic Games’ ethical misconduct taught us anything, it’s that the video game industry is in dire need of guidance and regulations.
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