Wednesday, August 11, 2021

News and Commentary: Of The Gacha Ban

Linden Lab's move to ban gachas has been among their most controversial decisions in Second Life history. Gachas have been a popular way of selling goods. But they've also had no shortage of harsh critics. The ban brought out much criticism to the Lab, "Why shut down these business people?" But it also got a lot of cheers, "It's about time. They should have been gone a long time ago."

The move has been compared to the gambling ban in 2007 when Linden Lab ordered obvious games of chance, at least those that required Linden dollars to play for a chance to get a bigger cash return, taken down. The reasons today are pretty obvious - they were against California law, which Linden Lab falls under. Probably the biggest criticism was that the Lab only gave the operators 48 hours to shut down.

A number of critics of gachas claim they're little more than gambling themselves, that in order to get the prized rare item, people have to spend an unknown number of Lindens to get it. And therefore should fall under laws against gambling. Another comparison is to the "Lootboxes" of various games, among the most infamous examples being the ones on Battlefront II that made the game which already cost money to buy a "pay to win" one. Another example was Overwatch, in which the items in the crates didn't affect gameplay, but critics charged the desire for rare ones would be an incentive for players, notably minors, to spend money to purchase one. Several countries have passed laws or debated proposed laws against them.

In my opinion, there is another move by Linden Lab that more closely resembles it's gacha ban, it's May 2013 move to shut down independent Linden dollar exchangers. This move came two months following the US Treasury Department's Financial Crimes Enforcement Network issuing a statement of guidelines on virtual currency, which were interpreted by one blogger as Linden Lab having to register with FinCEN to avoid steep penalties. To those familiar with the blogger's article, it did seem the Lab paniced and responded with a ban. But to the Lab's surprise, a number of residents outside the US stated they'd have to stop coming to Second Life as they now had no means to buy Linden dollars. So the Lab partially rescinded the ban, and the exchangers willing to be licensed by the Lab could do business again. But two years later, the Lab would once again ban them. This time, they had made it easier for Non-US residents to buy Linden dollars, and so the third-party Linden exchanger ban was for good.

There was a lawsuit by California against Apple concerning games from it's app store in which lootboxes were involved, but it was dropped. So as Second Life is under California law, it's under no obligation legally to drop them. Might access to Second Life be blocked in countries that ban lootboxes? Unlikely as to my knowledge, no country has complained to Linden Lab about it's gachas, including those with laws against lootboxes. So it seems instead of waiting until an actual complaint in which it could either fight in court or comply, it decided to jump the gun and ban the games months, perhaps over a year, before any serious challenge was mounted. Considering that gacha machine owners were given just 30 days to transition, either there's something going on behind the scenes only the Lab knows, or once again the Lab made a panic move in anticipation government actions.

Probably one more distinction between Second Life gachas and lootboxes is that there's no way, at least legitimately, a young child can put cash into an SL gacha. No one under 13 is allowed at all. While 13-15 year olds can come on, they need a sponsor organization and are limited only to the few sims owned by that sponsor. Accounts belonging to 16 and 17 year olds, under the rules they are limited to General-rated sims. If the Lab really was feeling pressured to "do something," limiting gacha machines to Mature and Adult rated sims would have been a much less drastic action. While a minor could always lie about their age and claim to be 18, that's already a banable offense.

Yes, a lot of people hate gachas. There's no shortage of people going virtually broke trying to get that one rare item they want. And if people go onto Marketplace to try to find it, some can only find only a few at huge prices. But there are ways to deal with these problems rather than a heavy-handed ban.

So what effect will the gacha ban have on Second Life? Some of the gacha merchants will do doubt find other ways to sell their products. Some may decide they'll be working harder for less money and close up shop. Two of the biggest gacha events, The Arcade and Gacha have already announced they're continuing. But some lesser known ones may find trouble attracting clients. 

Time will tell.

On a final note, I've occasionally played gachas myself. If I ever got what I didn't much care for, well, maybe someone might like it for a gift. And once in a while the rare items I managed to get became gifts as well.

Sources: Screenrant, Wikipedia, Bloomberg Law,

Bixyl Shuftan

1 comment:

  1. FinCEN was the worst possible thing that ever happened to the gaming/VR industry at large. And they're watching cryptos and blockchain like a starving hawk.