Noncompete bans, to game or to work and loot boxes : The Indicator from Planet Money We wrap up our series on the economics of the video game industry with a triple roundup. Today, how the new ban on noncompete contracts could affect the gaming industry, whether young men are slacking off work to play games and the ever-controversial world of loot boxes.

Related episodes:
Forever games: the economics of the live service model (Apple / Spotify)
Designing for disability: how video games become more accessible (Apple / Spotify)
The boom and bust of esports (Apple / Spotify)
Work. Crunch. Repeat: Why gaming demands so much of its employees (Apple / Spotify)

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Video Game Industry Week: The Final Level

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I'm Darian Woods.


And I'm Adrian Ma. And, hey, you've done it. You have reached the final level of our Indicator weeklong video game industry series. And we are capping it off today with a roundup of a few interesting video-game-related indicators that we didn't quite get to yet.

WONG: We will talk about noncompete contracts in the gaming industry, whether games are holding young men back from working, and a quick status update on the controversial world of loot boxes.

WOODS: All that after the break.

We're sharing some little gaming information vignettes. First off, Wailin Wong.

WONG: Hello. My vignette is not gaming-specific, but it is related to some big news this week that could have an impact on the games industry. So the Federal Trade Commission just unveiled a new ban on noncompetes. A noncompete is when companies bar their employees from taking a new job or starting a business. And the FTC estimates that these restrictions affect 30 million workers in the U.S. So, like, say you're a game developer, and you're under a noncompete. If you leave that employer, you can't go to a different company or start your own game studio for a certain period of time.

MA: What does this mean for people who are already in the job and have signed noncompetes?

WONG: Well, that noncompete is dunzo. Your employer cannot enforce it after this ban goes into effect. And then going forward, employers can't use noncompetes at all.

WOODS: And are noncompetes pretty prevalent in the games industry?

WONG: You know, it's a little tricky to find hard data on this, but anecdotally, these kinds of restrictions do seem to be common in the industry. I saw one tweet from a product designer who said that every contract position they'd held at a game studio came with a noncompete clause.

MA: That is interesting. And I think it's also worth noting here, though, that California is a place where a lot of people who work in video games are based, and California has banned noncompetes for a while now.

WONG: That's right. And actually, this long-standing ban on non-competes in California has been credited for the success of Silicon Valley, because you have people who work at big tech companies that leave to found startups. That's basically how Intel was founded back in the day. And then, you know, you can think about an alternate universe where, say, Google or Intel prevented its employees from starting their own businesses. And it's, like, we might have a lot fewer start-ups in that case.

WOODS: I wonder if this heralds the dawn of a new bunch of indie game developers then.

WONG: Yeah, it's possible. But some big business groups are trying to stop the FTC. One of those business groups, the U.S. Chamber of Commerce, is suing the FTC in federal court. It's calling the noncompete ban an astonishing power grab.

WOODS: Well, I'm going to do an astonishing power grab right now when I talk about my segment.

WONG: (Laughter). Oh, game over for Wailin Wong. You go ahead, Darian.

WOODS: That's right. That's right. So I'm looking at how gaming could be affecting the labor market - basically, men playing video games more and working less.

WONG: Just men. Is this the patriarchy at work?

MA: It's actually the patriarchy slacking off, I think is the...

WONG: Is the patriarchy not at work?

MA: ...Context for this study.

WOODS: (Laughter) Look, of course, people of all genders play video games. And according to a bunch of surveys, the male-female split is actually fairly even. But according to the American Time Use Survey, women and girls spend about half the time playing those games than men and boys. So in 2022, young men spent an average of a little over four hours a week playing games.

MA: OK, but that's just the average, right? Like, I imagine some of these people are playing way more than four hours a week.

WOODS: Yes. And in my own case, the most I'll ever play is this little mobile game called Neko Atsume. Has...

WONG: I love that game.

WOODS: ...Anybody heard of it? Yeah, yeah, yeah. It's maybe the lowest-possible-effort video game in the world. You buy, like, cushions, and you buy fluffy cat teasers, and you put them out in the yard. You turn off the app. And then you come back a few hours later to see if any neighborhood cats arrive.

WONG: I will quibble with your description as low effort because I put...

WOODS: Oh, yes?

WONG: ...A lot of effort.

WOODS: You've invested a lot of effort into this?

WONG: ...Into - yes, into trying to get these rare cats. Like, there's this cat that's dressed up like Don Quixote, and I was like, I got to get this cat.

MA: (Laughter) OK, OK. But to bring it back to the question at hand, you're saying a measurable amount of young men in the labor force are playing video games instead of working?

WOODS: Yeah. So four economists looked at data from this ongoing survey. And by the time their paper published several years later, they described a lot of young men working less. And they worked even less relative to middle-aged men. And the vast majority of this difference was due to games getting better and cheaper and people playing more of those games.

MA: OK. But how big a difference are we actually talking about here?

WOODS: It's about 3% less work. So the younger men had a 3% greater decline in how much they worked that the economists attributed to video games. And just to illustrate, for the standard workweek, that would mean about 15 minutes less work every workday.

WONG: I mean, games have gotten even more immersive since a decade ago. So has this trend kept going?

WOODS: Young men continue to play even more video games. That four hours a week is double what...


WOODS: ...It was 10 years prior to that. But the good news is that it doesn't, at the moment, seem to be eating into the working week. Hours worked for men has actually remained pretty stable recently.

WONG: All right. Well, thank you for that, Darian. And Adrian, you are going to bring this roundup home by talking about something that actually a lot of listeners wrote in about, right?

MA: Right. A lot of you wanted us to talk about loot boxes. So loot boxes, if you haven't heard of them, they appear in all kinds of games, from strategy and sports games to those shoot -'em-up games. And basically, what they are are these virtual treasure chests you can buy in a game, and it gives a player a chance to get a certain item or upgrade, and this could be, like, a special weapon or some kind of custom clothing. But here's the really important thing to know about loot boxes, is when you buy them, you don't actually know what's inside.

WONG: And when you buy them, you're using real money - right? - it's not just, like, the funny money in the game.

MA: No, this is, like, cash money that people are buying these virtual boxes with. And usually, what happens, you know, after you buy them, there's this reveal accompanied by a flashy animation.



MA: Is the pleasure center of your brain not lighting up right now?


MA: And so when this happens, the players do get something from the box, but they don't always get what they want. And this is actually not a novel business tactic, right? Like, baseball card makers would sell packs where the people weren't sure what cards they were getting. Pokemon did this, too. And this sort of unpredictability is why for gamers, loot boxes are just a consistent source of frustration.

WOODS: But with every ounce of frustration, I guess, comes a revenue stream to the companies.

MA: Totally. And this is kind of part of that forever games model that we talked about earlier this week, you know, just another way for companies to cash in on players playing. A few years ago, a market research firm called Juniper Research, they estimated players around the world will soon be spending about $20 billion a year on loot boxes. And for some gamers, this has become a sort of addiction that has been compared to gambling.

WOODS: And if there's anything I've learned from the series this week, is that we shouldn't delineate the real world with the gaming world so strongly. Like, for a lot of these people, this is no different than the real world.

MA: I mean, to that point, you have actually lawmakers in various countries in Europe and Asia who've tried to ban or regulate loot boxes. And just for one interesting example, like, China and South Korea require games to inform players about the odds of getting certain prizes. For instance, if you have a game where you have, like, a super special laser sword that you can get through a loot box, the game has to tell them, well, you only have a 1% chance of actually getting it.

WONG: Well, in the words of that character in "Dumb and Dumber, " it's, like, so that means I have a chance.


WOODS: Exactly.

MA: You're saying there's a chance, yes.


WONG: And speaking of chances, you can still enter the contest to name our new alligator mascot. Thanks to everyone who sent in ideas, especially the person who said the alligator should be named after me. The emails are still coming. Thank you so much. We will announce the winner and, of course, the name in the next couple of weeks.

WOODS: This whole series was masterminded and produced by Corey Bridges. We could not have done it without you. Thank you very much, Corey. And this episode was engineered by Valentina Rodríguez Sánchez. It was fact-checked by Angel Carreras. Kate Concannon edits the show, and THE INDICATOR is a production of NPR.


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