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Gaming mirrors Facebook's crisis of credibility

On addiction and loot boxes, the industry's lack of transparency will prevent it from getting the benefit of the doubt

"This model can feel opaque, and we're all distrustful of systems we don't understand. Sometimes this means people assume we do things that we don't do."

That's Facebook co-founder and CEO Mark Zuckerberg, writing in a Wall Street Journal opinion piece on Friday to mark the 15th anniversary of the social network. It's the editorial's most substantial defense against criticisms of the company, and it's essentially true. When people can't see for themselves that everything's on the up and up, some will infer all sorts of shenanigans going on behind the curtain, even when there's nothing underhanded going on at all.

That said, Zuckerberg is asking for the benefit of the doubt in his editorial, but he has very little credibility to make such a request. His editorial reads less like an explanation of the way Facebook works and more like a PR play to tweak the press narrative surrounding the company.

For the unfamiliar, Facebook has been under fire for privacy issues after a data breach that allowed consulting firm Cambridge Analytica (which worked for Donald Trump's presidential campaign and the pro-Brexit Leave.EU organization) to access the personal data of some 70 million Facebook users. As if the breach itself weren't bad press enough, Facebook is reportedly facing a record fine from the Federal Trade Commission over it. And technically, that fine won't be for the breach itself so much as it will be for the company violating a 2011 settlement with the FTC over previous charges that it deceived consumers by failing to keep its promises to protect their privacy.

This is something the games industry as a whole should look closely at, because Zuckerberg's quote applies directly to how people perceive games in the debate over addiction and loot boxes

Given the company's repeated failings, Zuckerberg asking for the benefit of the doubt is already a stretch. But it becomes bold to the point of laughable coming at the same time The Center for Investigative Reporting's Reveal outlet reported on the company's practices regarding fraudulent charges, in which customers who were not given any benefit of the doubt when held accountable for millions of dollars in credit card charges they never agreed to.

"Friendly fraud." That's the term Facebook used to describe unauthorized charges made by kids using their parents' credit cards in an internal memo, one that explained "what it is, why it's challenging, and why you shouldn't try to block it." The memo was part of 135 pages of unsealed documents in a class-action lawsuit against the company that show the company refused to deter friendly fraud because it would hurt revenue.

This is something the games industry as a whole should look closely at, because Zuckerberg's quote applies directly to how people perceive it in the current debate over gaming addiction and loot boxes.

Consider the saddest kind of whale in the free-to-play world, a person who compulsively spends far more on a game than they can afford, month in and month out, to the point of financial ruination. Given what you know of the industry today, how do you think a publisher would deal with that player? Would they conduct a welfare check on their prolific customer, reaching out to simply ask, "Hey buddy, are you sure you're OK?" Or would they be more likely treat them like a high-roller in a casino, offering white glove concierge service, admission to a private Discord channel with the developers and a free flight to the studio for (unpaid) consulting on the next big update?

My admittedly uncharitable guess is the latter. As I pointed out in an editorial last year, publishers can now track user behavior at levels previously not possible. Major publishers are researching and patenting ways of altering the play experience, putting a finger on the scale here and there in order to maximize people playing longer and spending more. They've refused to comply in good faith with even the laxest regulations of loot boxes, and they've publicly talked about a person playing a game for 5,000 hours in a single year (almost 14 hours a day, every day) as a roaring success.

Gaming trade groups have achieved a Rayman-like level of "hands off" when it comes to loot boxes and addiction

In my mind, the Zuckerberg defense is no more convincing for the games industry than it is for Facebook because there's a lack of credibility, because games have too often betrayed that trust, and sometimes for what I imagine must be minimal gain. And I recognize this isn't entirely fair, because it's painting the entire industry with the same brush because of the actions of just a few companies. But some of the largest players are the ones undermining that credibility. The previous graph's actions were all accounted for by Electronic Arts and Activision Blizzard. And trade groups formed to represent the industry's interests have achieved a Rayman-like level of "hands off" when it comes to loot boxes and addiction.

The Entertainment Software Association's big solution to the loot box furor was to introduce a label to let people know that a game has in-game purchases and gesture in the direction of parental control functions. As for the loot box-adjacent question of game addiction, the industry may have a stronger argument to make in saying that the science isn't clear. Perhaps as UKIE head Jo Twist said, some media coverage of the issue has been irresponsible, and perhaps as the ESA believes, there should be more conversation and study before excessive gaming is added to an international list of addictive disorders used for diagnosis.

The industry's arguments would be more persuasive if it wasn't embracing business models that not only benefit from what we might think of as addictive play, but essentially require it to be viable

At the risk of being cynical about trade groups, I'll just say it seems convenient that these groups believe the fault is someone else's, and the answer is to do absolutely nothing that would require a change to the way their business is done today or in the near future. These arguments would be more persuasive if the industry had not spent much of the last decade embracing business models that not only benefit from what we might think of as addictive play, but essentially require it to be viable.

A recent report from DeltaDNA proclaimed that the free-to-play industry has been moving away from its reliance on whales, with spending more evenly spread between whales and casual players. That is absolutely the right way to go, but even then only 4% of free-to-play gamers pay in North America, and less than 2.5% in Europe.

Let's say that actual gaming addiction is rare, like less than 1% of the population rare. So in that case, as much as a quarter of the paying user base for free-to-play games in North America are addicts, and more like 40% in Europe. Wow! Actual gaming addiction may be rarer, but FIFA Ultimate Team has taught us that percentages lower than 1% are all functionally identical, so I guess we'll have to go with the information we have. Deliberately unfair math aside, when you have a business model driven by a relatively small portion of players, exploiting the addiction of a relative few becomes a larger part of the business than it might appear at first glance.

I was speaking with my publisher Chris Dring on our group Slack channel last week, and he was surprised at the receptive response some in the games press have given to the idea of government legislation around loot boxes. And it has been surprising, especially to those of us who remember the hyper-unified front the industry and press put up against the post-Grand Theft Auto: San Andreas wave of legislation against violent games.

But this time around, on this issue, there's much more division on whether there's a problem and what should be done about it. The industry should see it as a red flag that a number of its staunchest defenders then have become vocal critics now. These are people who have followed games so closely for so long, and they have looked at the situation and determined that the companies behind them aren't deserving of the benefit of the doubt, that these opaque systems cannot be trusted. If you can't win these people over, what are your odds with legislators who don't understand games half as well, those arriving to the discussion with only two things: the idea that games are exploiting children and the ability to regulate your business in almost any way they see fit?

The way forward here should be for the industry to build its credibility back up, but it can't really do that as long as people are assuming the worst about its practices. So if we work backwards from that Zuckerberg quote at the start of this article, the place to start is with the opaque. From what people get for their money to how companies use the information collected from them to the code determining just what a loot box contains, the entire industry must tack towards transparency.

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