Journal
BUSINESS HORIZONS
Volume 62, Issue 4, Pages 483-495Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.bushor.2019.03.001
Keywords
Video games; Microtransactions; Loot boxes; Government regulation; Self-regulation; Electronic arts
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The video game industry has ignited a global controversy surrounding microtransactions in gaming, especially the use of loot boxes: randomized rewards with potential real-world value. Consumers and legislators are calling for the regulation of these revenue models on the grounds that they are unfair, predatory, or could be considered gambling. This article examines the controversy from a management perspective. First, I outline current regulatory responses to the controversy and what they mean for business practices. Then, I explain ongoing industry-level and firm-level attempts to self-regulate as a way to placate consumers and governments. These tactics highlight a wide range of broader strategies that game developers and other stakeholders can pursue in order to improve customer relations and, more publicly, signal their commitment to self-regulation and avoiding consumer harm. These practices can be applied more broadly to firms that offer controversial products or services that do not yet fit within current regulatory frameworks. (C) 2019 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.
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