The controversial video game practice of selling loot boxes has faced renewed scrutiny following a comprehensive study that estimates lifetime spending on these digital gambling-like features by problem gamers at a staggering £68.5 billion worldwide. The study by UK universities links the buying of loot boxes with problem gambling, compelling renewed debate over the legality and ethics of the lucrative but contentious game monetization strategy.
The issue of video game loot boxes has resurfaced, catalyzing fresh waves of controversy within the gaming fraternity and far beyond. This development follows the recent release of a comprehensive study that links the practice of loot box purchasing to problem gambling.
Video game loot boxes are essentially digital grab bags that players can buy either with real money or in-game currency. They contain a random assortment of in-game items like weapons, player enhancements, or special abilities. These items are typically cosmetic, meaning that they do not give an unfair advantage to players who purchase them.
The loot box model has been an integral part of the video game industry’s monetization strategy, with mega-hits such as Fortnite, FIFA, Overwatch, and many others heavily relying on this practice for substantial parts of their incomes. Market research firm Juniper Research reported in 2018 that loot box mechanics contributed to an eye-watering $30 billion of video game industry revenue.
However, the monetization strategy has always been ensnared in controversy, with both players and regulators roundly criticizing the practice, likening it to gambling. Critics say that the randomized nature of loot box rewards, coupled with the dopamine rush of the opening animation, are eerily similar to slot machines.
In a significant development, these criticisms have received a considerable boost thanks to a comprehensive new study conducted by researchers at the Universities of Plymouth and Wolverhampton in the United Kingdom. Published in the peer-reviewed journal ‘Nature Human Behaviour,’ the study has recorded a strong link between problem gambling and the purchasing of loot boxes in video games.
The researchers highlighted that loot boxes “share a number of formal structural and psychological similarities with gambling”. Additionally, they found that the people most likely to buy loot boxes are those who show signs of problem gambling. The study claimed that loot boxes could act as a gateway to problem gambling and that the British public lost approximately £700 million through buying loot boxes in video games in 2020 alone.
The researchers also crunched the numbers on the global scale, estimating an astonishing £68.5 billion in lifetime spending on loot boxes across the globe—all by players who show signs of problematic gambling.
This correlation has reignited the ongoing debate about the ethics and legality of the monetization strategy. If we browse the history of loot boxes, it cannot be ignored that legal scrutiny regarding the practice dates back to as early as 2018 when Belgium’s Minister of Justice deemed them to be gambling and, consequently, illegal. Not long afterward, the Netherlands declared several loot box systems contravened its betting and gaming act.
Concurrently, the U.K’s House of Lords has called for the immediate classification of loot boxes as gambling in the Gambling Act 2005. A similar legislative effort is underway in the United States, with Senator Josh Hawley proposing a bill to ban loot boxes and other pay-to-win mechanics in games played by minors.
In response to these accusations, major industry players have insisted that loot boxes do not constitute gambling since players always receive an item of value, thus, there is no risk of a total loss, as in traditional gambling.
However, it’s noteworthy that the tide of public and legal opinion has begun to shift. Following a legal tussle, EA Sports, one of the most prominent purveyors of loot boxes through its FIFA franchise, was compelled to disclose loot box odds in 2019.
Amid increasing legal scrutiny and public outcry, developers and publishers will have to balance their drive for revenue with their responsibility to protect players, especially minors. Already some countries like China and Japan have enforced restrictions on the unlimited purchase of loot boxes.
The new study’s findings serve as incontrovertible evidence of the harms loot boxes can cause. They inform the ongoing national and international debates concerning the regulation of this contentious practice in the video game industry.
Realistically, it’s probable that loot boxes are here to stay, particularly given their financially lucrative nature for game developers. However, the wave of scrutiny, led by irrefutable evidence, is likely to spur stricter regulations and greater transparency. As the controversy surrounding loot boxes reignites, it’s clear we’re at a defining moment in the timeline of this digital practice.
Sources:
1. Drummond, A., & Sauer, J. D. (2020). Video game loot boxes are psychologically akin to gambling. Nature Human Behaviour, 4(8), 530-539.
2. Juniper Research. (2018). Video Games: Industry Trends, Monetisation Strategies & Global Opportunities 2020-2025.
3. Belgian Gaming Commission takes on loot boxes. (2018, April 27). The Brussels Times.
4. Loot boxes violate Dutch gambling laws, study suggests. (2018, April 30). Dutch News.
5. Select Committee on the Social and Economic Impact of the Gambling Industry. (2019). Gambling harm – time for action. Parliament of UK.
6. Hawley, J. (2019). The Protecting Children from Abusive Games Act. U.S. Senate.
