Loot Boxes - Gambling, Microtransactions, Regulation - Loot Box

A year ago, players had finally had enough of feeling exploited by publishers looking to squeeze extra profits through loot boxes. EA’s Star Wars Battlefront 2 was at the forefront of the controversy, as the game randomly awarded powerful characters such as Darth Vader. So, the only way players could get coveted characters was either to sink a ton of time into playing or to spend money to buy more boxes. That was on top of buying the game itself. But even then, a lot was still left to chance, and many likened it to gambling. The topic blew up on social media, with EA’s comments about attaining a “sense of pride and accomplishment” becoming the most downvoted comment on Reddit.

However, the fiasco quickly spread beyond the gaming community. Legislators, regulators, and psychology experts were soon talking about loot boxes and the harm they posed, especially to children. In the Netherlands, a handful of games were considered in violation of its gambling laws. In Belgium, games with loot boxes were waffled with an outright ban. Even today, various games such as Mobius Final Fantasy, Dissidia Final Fantasy, and Kingdom Hearts X are reeling. Like others, they’re being pulled out of Belgian stores by the end of this year.

But while the topic seemed to cool for a while, it’s starting to heat up again. Investigations are being conducted, and studies are being published. A number of gamers in online message boards are clamoring for more regulation.

Loot Boxes - Gambling, Microtransactions, Regulation - Gambling -

The Gambling Problem

The core complaint is that loot boxes are equivalent to gambling, or they at least use “gambling-like” mechanics. In Belgium’s case, this was defined as “a game element allowing bets to be placed, with possible profit or loss, and chance playing a role in the result.” In the Netherlands, the problem stems from the fact that loot box contents are tradable via in-game marketplaces and, therefore, have real-world monetary value. This prompted Valve to lock Counter-Strike loot boxes in both countries in July.

China, which prohibits gambling, took a middle ground approach by instituting a set of rules around loot boxes. They include how loot boxes cannot be purchased using real or virtual currency, and publishers need to be transparent about the prizes and chances of winning them.

Countries including Britain and France launched their own investigations into loot boxes. In Australia, a report from September found that “loot boxes were correlated to gambling.” Reddit celebrated the news, even though the Australian loot box study is riddled with issues. Specifically, the researchers conducted two studies totaling 8,100 respondents. All of them were over 18-years-old, and the study merely asked them how much money they spent on loot boxes. The study is also based on findings from a different report that found that proximity to slot machines could increase problem gambling.

So, the study assumes that loot boxes have the same impact as physical slot machines. Even after conducting the study, the researchers couldn’t determine if loot boxes led to problem gambling, exacerbated existing cases, or both. But no matter the case, the issue may be overstated, given that Australia has a low gambling addiction problem. Only about two percent of the population suffers from it. According to the study itself, only 130 respondents out of 8,100 (1.6 percent) had severe gambling problems. Additionally, the researchers — who specialize in computer science — admitted to having no empirical evidence to support their conclusions.

“There is very little evidence for you to go on,” Dr. Zendle, a computer science lecturer at York St. John University who co-led the study, said during his testimony. “Certainly when it comes to empirical studies there is very little. We found an overall relationship. It will take months, if not years, for the literature to gain the nuances that you’re talking about and be able to inform you in any empirical way.”

Given the overall lack of reliable information, the Australian government decided to do a comprehensive review of the topic instead of outright banning or regulating loot boxes.

Loot Boxes - Gambling, Microtransactions, Regulation - Children

Think Of The Children

Soon after loot boxes became a major issue, a number of US politicians came forward to denounce them. Chris Lee, a representative from Hawaii, took to Reddit to ask for the support of gamers against EA. But the proposed bills did not meet the deadline. Three senators from Washington also proposed a bill that would allow the Washington State Gambling Commission to study loot boxes. Meanwhile, a Minnesota legislator proposed banning the sale of certain games to minors.

One of the most outspoken critics is Senator Maggie Hassan of New Hampshire. Hassan made a statement regarding loot boxes in a hearing last February and wanted the Federal Trade Commission (FTC) to get involved. She voiced concerns about how children might be vulnerable to their gambling mechanics.

In November, the FTC pledged to Congress that it would “look into video game loot boxes.” The announcement was spurred by Senator Hassan, who cited a United Kingdom Gambling Commission report that stated that gambling among children was on the rise. It indicated that “30 percent of kids have used loot boxes in games which could correlate with problem gambling later on.”

Except, the UK’s Gambling Commission never made such a correlation.

The report Hassan and many others cite found that “the number of underage problem/at-risk gambling has quadrupled” in the last two years. Major causes include:

  • Gambling advertisements in UK television
  • Ease of access in online gambling casinos
  • Lack of awareness from parents
  • Proprietors not caring if minors are gambling in their establishment
  • Peer pressure and making bets with friends

Many tend to overlook that list, instead focusing on the line “31 percent have ever opened loot boxes in a computer game or app; only three percent have ever gambled with items or skins.”

The UK Gambling Commission told GamesIndustry.biz in an interview, “We’ve not in any way, in the survey, referred to [loot boxes] as exposure to gambling. The reason we’ve asked that question is that it’s a very popular subject matter and we want to try and make sure that we have as much information and data around it as possible.”

Meanwhile, the survey’s results exploded on Reddit with thousands of upvotes and comments. Although the commission’s report makes no definitive claims about loot boxes, many users used it as evidence that loot boxes were a gateway to gambling among kids.

Business Is Booming

The topic of loot boxes and other microtransactions isn’t likely to go away anytime soon. There are plenty of high-profile titles that are developed specifically with the “games as a service” model in mind.

Although many titles have phased out loot boxes, many popular games continue to use them. After last year’s controversy, EA chose not to include them in Battlefield V, and Activision similarly got rid of them in Call of Duty: Black Ops 4. But games such as Overwatch, Rocket League, Counter-Strike, and others still do. The practice remains quite profitable. However, it is worth noting that Psyonix at least revealed Rocket League‘s loot box odds.

Star Wars Battlefront 2 Daily Loot Box

Loot Boxes Ruin Games

If nothing else, the past year has shown that we need to conduct more studies. However, it’s also fairly telling that loot box regulation is one of the few things vocal internet users are getting behind, despite being presented with questionable data.

While gamers have often dismissed issues such as video game addiction, how the World Health Organization classified “gaming disorder” as a diagnosable condition, and studies that associate games with depression, anxiety, and violence, loot boxes are getting a pass. It’s one of the rare cases where government involvement is being encouraged.

But maybe the reason for that has less to do with psychology, gambling addiction, and protecting the children, and more about what loot boxes represent. Gamers feel that loot boxes and microtransactions keep developers from giving players the full value of the games they purchase. This fuels the drive to promote news where loot boxes are investigated, regulated, or outright banned.

Loot boxes, in this case, are a threat to “good games.” As such, discussions about psychological factors, gambling, and children are just convenient ingredients to have. They’re the last line of defense against the proliferation of the system. But if all of this results in something that preserves the sanctity of gaming, then maybe gamers can use that to obtain a sense of pride and accomplishment.

Jason Rodriguez
Jason Rodriguez writes for various websites under the Enthusiast Gaming umbrella -- Destructoid, Flixist, Daily Esports, PlayStation Enthusiast, and PC Invasion. Jason's Steam library has 1,400+ games at the moment so he definitely has a lot of things to talk about. He's also one of only five games journalists from the Philippines. Just kidding. There are definitely more around, but he doesn't know anyone. Mabuhay!

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