Lab announces the ending of gacha machines in Second Life

via Linden Lab

In what is going to be seen as a highly unpopular move, Linden Lab has announced that the use of gacha machines within Second Life must be discontinued by content creators by the end of August, 2021.

To avoid and misrepresentation of the Lab’s decision, I’m reproducing the official announcement below:

Due to a changing regulatory climate, we’ve had to make the difficult decision to sunset a very popular sales mechanism for content in Second Life.  It’s widely known as “gacha”, and is defined by a chance-based outcome as a result of a payment.  
We know that creators plan their content releases far in advance and will need to re-tool their products, so to mitigate the impact to those affected, we are giving a 30-day grace period, until midnight SLT on August 31.  After that time, selling content via gacha machines will no longer be permitted in Second Life.  Enforcement won’t start until September 1; after that date an Abuse Report for “Gaming Policy Violation” will be the preferred method of reporting this content to Linden Lab.  
We will continue to allow any sales where a payment is given for a known item, which means that items that had been purchased as “gacha” will be allowed to be re-sold as long as the buyer knows in advance the item and quantity they will receive. We will, of course, still allow fatpacks, and any other currently-allowed distribution mechanisms. 
We did not make this decision lightly and we understand that it will impact creators as well as event organizers and certainly the shoppers! We look forward to fun creative ways of engagement that will come instead.

While the decision is going up upset some content creators and disrupt certain sales events, the likely cause of this change is due to countries increasingly regarding the use of loot boxes (of which gacha machines are a form) as a means of gambling, and introducing regulation and legislation regarding their use. In the United States, a number of states have also introduced legislation on the use of loot boxes and similar over the last 2-3 years, and a proposed federal bill on the matter expired at the start of 2021 – which does not mean federal, as well further state-level legislation, will not be forthcoming.

Those with questions / concerns about the decision, can voice them via the official forum thread on the matter, which the Lab has indicated it will monitor and attempt to reply to questions raised.

 

Updated to add a missing “proposed” from the penultimate paragraph.

23 thoughts on “Lab announces the ending of gacha machines in Second Life

  1. So basically there are so many of these gacha machines in SL it would be very difficult to update them all to show the odds, so easier to ban and have a report facility. Gacha boxes, whilst a bit of fun, are essentially, a scam.

    Liked by 1 person

  2. This is a terrible decision. As a content creator, I know that a good portion of merchant income comes from gacha machines. I can say with confidence that it will also deeply impact the fund raising that Second Life does for real life causes. The two gachas I put into the American Cancer Society Spring Home & Garden Expo raised a combined L$23,000 (which is roughly $100 US dollars). That will add up to a significant loss of donations to worth while causes. I am fortunate because my store holds it’s own with or without gacha machines, but this decision will cause some merchants to close their doors with insufficient income to pay their tier. Linden Labs will feel this in their own pocketbooks. Adults should decide for themselves how to spend their money. No one forces you anyone to play a gacha machine.

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  3. Some creators’ gachas are a huge pain to get what you want, for sure, but I’ve always tried to release gachas that are fair and not frustrating. A lot of hardworking creators who may rely on their sales to pay SL and/or RL bills may face issues, and a month isn’t enough to retool an entire business plan. But if gacha is “gambling”, then perhaps so are baseball cards and magic the gathering. A solution barring users who log in from coutries who do not allow it from accessing gacha machines or gacha locations would have taken more development than just hammering it, but it might have been more respectful to the creators who help populate LL’s world.

    Liked by 1 person

  4. Re: this statement, which is misleading:
    1. A bill is not a law. This particular bill never got to committee before the end of session of Congress. I think you are not in the US. But this is not a “federal bill that expired” i.e. something “real” — it was one attempt by a very conservative senator who is actual under indictment for the January 6 insurrection. That’s a helpful context to know about that “expiration.
    2. The states that passed laws on lootboxes — and reporting is vague here because in some cases these are again, only draft laws — did not yet see prosecution of SL gatchas. It’s not even clear that SL gatchas, not required for “gameplay”, which do yield a prize each time, even fit under the definition of a “loot box”. There is no jurisprudence here.
    3. What happened is that the new owners including Raj Date, who formerly served in the US Dept of Justice on the financial consumer board started by Elizabeth Warren, and in his judgement only, valid or not, there might be a law coming, in which case he wants to limit liability for litigation, like any proper company.
    4. To make this point more clearly: Canada has an anti-gambling law on the books since 2010 which could be applied to gatchas, yet in 11 years, no Canadian merchant has been prosecuted.
    With laws, you really have to look at the jurisprudence, a word that in the US means, in the common law system, the set of rulings by a judge on that law that compromise the application of how that law is interpreted.
    But of course LL can make any policy it likes. And it loses nothing as it gets 10% from gatcha resales which will continue for some time and are not made illegal by this policy. They will lose some merchants’ tier on islands, but maybe will see more purchase of land as people have stores to try to sell there now.

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    1. Some corrections: Raj Date worked in the Department of *Justice* on consumer issues and specializes as a programmer and lawyer in fintech, which is even more relevant and might be driving this but can’t know as they haven’t told us. Not only Canada but more relevantly *California* had the anti-gambling law which was recently challenged when tech giants Apple and Google *defeated* lawsuits by angry parents outraged at huge expenditures for lootboxes on their credit cards. A judge ruled that there was no standing and no injury. That’s very relevant to SL. I know of no legal action that LL could reference specifically for this “regulatory climate”. Laws in China? Japan? Belgium? Everyone loves to invoke the idea that in an interconnected world, governments bring suit against American corporations all the time for all kinds of reasons without cause or jurisdiction and sometimes obtain satisfaction. But even these attempts have to follow some process. Where is the letter from the Japanese prosecutors to LL? Where is the Chinese citizen prosecuted for SL? I think it’s important to drill down on this motivation for LL as it will let us know what influences them and what to expect in the coming years.

      They may come for breedables next, even while saying *now* that because you “see what you get” when you purchase a mutt, the rare down the line with admirable traits that someone will pay a lot for “isn’t” gambling. In fact breedables involve more actual gambling and randomness than a gatcha machine with a visible gatcha key and a policy from merchants and often even a visible percentage of changes to win a rare.

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      1. AFAIK Raj Date hasn’t worked directly for the DOJ. Between Oct. 2010 and Dec 2013, he was Deputy Director of the Consumer Financial Protection Bureau (CFPB), which operates as an independent unit located inside, and funded by, the US Federal Reserve (although admittedly did operate at least one “joint task force” with the DOJ in that period). During that time he was also Special Advisor to the Secretary of the US Treasury for a 4-5 month period between August and December 2011. Other than that, he appears to had worked entirely in the private sector with in the financial markets. As far as I’ve been able to ascertain, he primary (but obviously not exclusive) focus appears to be Tilia Pay (Tilia Inc.).

        Liked by 1 person

        1. In making the correction, I obviously made the error again. Obviously as anyone can see looking at lindenlab.com at his bio he was at TREASURY but it matters that this was in CONSUMERS and it matters even if only a short stint. I have a lot to say about your misunderstanding of the context of this but it wouldn’t post so I will put it elsewhere.

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    1. Scratch cards, at least if you have to buy them and there’s an element of chance in the pay-out, are regulated in most places. Try printing and selling them without a licence and see what happens.

      Similarly, try running an online gambling game and see how willing payment processors like Mastercard, Visa and PayPal are to do business with you unless you can show them the appropriate licences.

      That’s the problem — in the current regulatory climate, gachas present LL with a continuing and grave risk of falling foul of regulators in one of LL’s major markets, with catastrophic, and possibly fatal, legal and financial consequences for the company and the platform, and LL has perfectly reasonably taken the view that they want to avoid that risk altogether.

      Liked by 2 people

    2. It was banned in Japan where it was created back in the early 2010s and it’s good it’s gone in SL and never had a place to begin with. . It’s not like the creators that made gacha even provided any value to sl, especially places like D Lab. it’s all ripped content from Japanese 3d model sites a bit harder to track and cg trader but many have. None of those items were of any benefit to anyone.

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  5. Are they going to ban the bubble gum machines all over the US that give prizes instead of candy. You never know what you will receive from them until it comes out. Same as gacha. Plus, what about blind packs and carnival games. There are so many variations. I am not a huge fan of gacha in SL because I end up spending way more than I should to try to get a set of something, but I know there are some shops that only sell through gacha.

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  6. Good-bye gatchas, good riddance, don’t let the door hit ya on the way out! Interesting at first, you became a blight on the landscape as a zillion unimaginative people copied you. Those who will miss you most perhaps are all the resellers of gatcha stuff on marketplace.

    Liked by 3 people

  7. Some gatchas are fun, offering little knick knacks or trinkets… others like a gatcha for a clothing outfit in bits and pieces were just plain dumb – I mean at the least they coulda offered the entire set for a fixed prices but oh well, gambling is gambling and that is prohibited in SL

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  8. I spend LESS because of gachas, all you creators, nor do I play them at RFL events! I quit some events that turned into 100% gachas, so money lost there. And I’m not alone. It’s not fair that often, gachas are better quality than regular priced items from certain sellers, so nice an end comes to this awful scam (TBF, some sellers I frequent have “better” more fair gachas, but still…). I’ve always HATED gachas, esp the clothing ones where you can never get a full outfit (or pay scam inflated prices by the time you do). I consider them sleazy and a blight. SL got rid of gaming (gambling), but added these. I’m sure more than one person is in huge debt due to them. They are addicting, but, yeah, personal choice (but once you get going…), but probably a huge problem with minors who aren’t able to make responsible adult choices and load up their parent’s credit cards. I am SO happy. Do you miss camping, Zyngo, etc, etc? Probably not. So go gachas and good riddance. Sellers will probably make so much from the gacha sales going on plus we’ll be able to truly buy that content in many cases so win/win. If you can only make money on SL by gambling and ripping people off, then you don’t need to be selling, or rethink your strategy/content. Good content sells and good reputations sell. Don’t think I’ve ever seen a gacha machine at HPMD, and many successful sellers only have 2 or 3 machines, so I rest my case.

    Liked by 1 person

  9. I dont have an idea about gachas to offer however, I would love it if some one would put a list together of all the merchants/stores that have all there gachas on sale until the End of Aug. I know of about 3 already. I love to know them all. Here are the ones I know of ZERKALO ALL GACHAS****VAGRANT ALL GACHAS ON Sale******* Parfait and Una even has some fat packs for free for members. Hope this was ok to mention and let me know if a list comes out.

    Like

  10. Some corrections: Raj Date worked in the Department of *Justice* [CORRECTION: TREASURY] on consumer issues and specializes as a programmer and lawyer in fintech, which is even more relevant and might be driving this but can’t know as they haven’t told us. Not only Canada but more relevantly *California* had the anti-gambling law which was recently challenged when tech giants Apple and Google *defeated* lawsuits by angry parents outraged at huge expenditures for lootboxes on their credit cards. A judge ruled that there was no standing and no injury. That’s very relevant to SL. I know of no legal action that LL could reference specifically for this “regulatory climate”. Laws in China? Japan? Belgium? Everyone loves to invoke the idea that in an interconnected world, governments bring suit against American corporations all the time for all kinds of reasons without cause or jurisdiction and sometimes obtain satisfaction. But even these attempts have to follow some process. Where is the letter from the Japanese prosecutors to LL? Where is the Chinese citizen prosecuted for SL? I think it’s important to drill down on this motivation for LL as it will let us know what influences them and what to expect in the coming years.

    They may come for breedables next, even while saying *now* that because you “see what you get” when you purchase a mutt, the rare down the line with admirable traits that someone will pay a lot for “isn’t” gambling. In fact breedables involve more actual gambling and randomness than a gatcha machine with a visible gatcha key and a policy from merchants and often even a visible percentage of changes to win a rare.

    Like

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