Companies Make Videogames Addictive to Profit on In-Game Purchases: Class Action

Shane Ayers, individually and on behalf of minor O.A., alleges videogame addiction is on the rise due to the advent of online, cloud and streamed gaming “on any device at any time.” The Dixie County, Florida, resident alleges 11-year-old O.A. began playing video games at 2 years old and has continued to play at an “increasing and uncontrollable pace” on a personal computer, Xbox One, Xbox One X, Xbox 360, Nintendo Switch, Xbox Game Pass Ultimate, Xbox Game Pass Gold and Google Play.

O.A. spends four to six hours per day playing the defendants’ video games, the complaint said, and he “cannot refrain from gameplay” or spending money while doing so. He has spent “large sums of money” and experienced brain damage, gaming addiction, severe emotional distress, diminished social interactions, loss of friends, poor hygiene, and withdrawal symptoms such as rage, anger and physical outbursts, the complaint said. He requires counseling, has been diagnosed with depression and ADHD and requires private tutoring and a disability plan at school, it said.

Ayers seeks redress on his own behalf for “loss of society and companionship," plus economic injuries and losses sustained as a result of O.A.’s “brain damage and gaming addiction" caused by the defendants’ “intentional, negligent, deceptive, fraudulent, willful, immoral, reckless, and unlawful acts.” He also seeks actual damages and injuries he personally sustained as a result of the defendants’ “deceptive, outrageous, fraudulent, and negligent acts.”

The complaint alleges that unlike arcade-style games, online videogames require “active, lengthy participation,” during which players are exposed to “psychological techniques designed to control, manipulate, and exploit minors’ developing brains to increase game playing time and encourage in-game purchases.” The “manipulation and exploitation” is possible because videogames “have little regulation beyond the Entertainment Software Ratings Board,” it said.

The latest revenue model in the videogame industry uses in-game purchases that enable publishing companies to “earn more profits over a very short period of time,” vs. games on disc or cartridge, the complaint said. Most in-game purchases have been made by minors and young adults, including O.A., it said. The videogame industry’s revenue last year was $365.5 billion worldwide; microtransactions comprised 30% of total gaming revenue, it said.

The explosive growth has been fueled by “monetization schemes” that target minors and young adults who are “induced” to make microtransactions of downloadable products, the complaint said. Publishers don’t provide “meaningful disclosure” of the inclusion of in-game purchases or “psychological mechanisms” used in the games to get minors to make purchases, it said. They rely on minors becoming addicted to their games, playing more hours and making more microtransactions, it said.

Microtransactions are often used in free-to-play games to provide those titles with a revenue source under the “freemium” model, the complaint said. Though the in-game purchases are typically low in price, they’re often bundled in “value packs,” or positioned for repeated sales “in order to meaningfully advance in the game,” it said. The microtransaction model relies heavily on algorithms built into a game that are designed to bring in revenue as long as the game is active, it said.

In-game purchases use “operant conditioning” to trigger impulse behavior in players, and they use peer pressure to drive purchases, the complaint said. Players may see time limitations, for instance, and make an impulse buy or be the first among a group of competitors to buy a premium item or achieve a higher ranking, it said.

Developers and publishers also use in-game purchases “to lock potentially significant product upgrades and ‘easter eggs’ designed to extend gameplay and increase a player’s dopamine levels behind paywalls,” the complaint said. Microtransactions are “non-essential” to game play; their purpose is to provide revenue that outweighs that from a one-time purchase of a game, it said. In-game purchases can “easily” and “quickly” add up to hundreds or thousands of dollars, it said.

Among the strategies game developers and publishers use to elicit spending are the “near miss” approach to convince players they were close to winning; “chasing” to get them to win back money they lost; “fear of missing out” to suggest a special prize is available for a limited time; “entrapment” to convince them they’re about to win, and the “sunk cost effect” of justifying more spending in a game because of the amount a player has already invested in it, the complaint said.

The gaming industry uses its knowledge of players’ game-related preferences, available funds, and playing and spending habits to present offers “predetermined to maximize the likelihood of eliciting player spending,” said the complaint. Games and videogame products linked to a player’s social network pages also gather information that the defendants use “to target products and microtransactions to users based on that player’s unique interests and preferences,” it said.

Among Ayers' claims in the 13-count complaint are strict liability for design defect and failure to warn; negligence; intentional infliction of emotional distress; fraudulent misrepresentation; civil conspiracy; aiding and abetting; and loss of consortium. Ayers seeks compensatory damages based on the nature, extent, duration and permanency of O.A.’s injuries. He also requests reasonable expenses for medical care and treatment; and compensation for pain, suffering and mental anguish for the past, present and future and for scars and visible results of O.A.’s injuries; the value of necessary help in O.A.’s home and his inability to attend school; actual financial loss; compensatory and statutory damages; attorneys’ fees and costs; and pre- and post-judgment interest.