Loot Boxes: A Controversial Topic in the World of Gaming

Matthew_Anderson

 In recent years, loot boxes have come under attack for being an example of predatory practices within the gaming industry. Various countries have instituted loot box laws restricting their usage or have even implemented an outright ban. Various studies have shown a link between these exploitative practices and signs of gambling addiction.

But if you’re unfamiliar with the debate, you may be wondering: what is a loot box? Simply put, a loot box is a virtual mystery item. They can be obtained as a reward as a feature of gameplay, or they can be purchased with real-life money.

The difference between loot boxes and regular in-game purchases is that loot boxes do not inform the user what is inside until payment is complete. This is what critics point to as a structural feature similar to gambling: gamers pay for the chance to open a loot box, hoping to unlock a rare or particularly valuable feature.

To better illustrate how loot boxes work, let’s look at how they work in a specific video game. Ultimate Team, a game from the FIFA series, is a game in which loot boxes are really important. The game is centered around building a squad of soccer players, and although these players can be obtained in various ways, one of the methods is through virtual card packs.

The term “card pack” is the in-game term for a loot box: it contains a random assortment of items, which may include very strong players or so-so players. Generally speaking, the more valuable the player (say, Lionel Messi), the rarer that player is within a card pack.

A story from the BBC highlighted an incident in which four children spent almost 550 pounds in the game and still never obtained their most coveted player, Lionel Messi. Although FIFA won’t disclose the odds of receiving certain players within a card pack, it can be assumed that the probability of drawing a talented player is incredibly low.

Why are they controversial?

Loot boxes have received backlash mainly because their predatory practices have been linked to gambling addiction. A search for “loot box gambling” on Google Scholar returns many academic articles that point to a connection between the feature and signs of gambling addiction.

For example, a report from the universities of Plymouth and Wolverhampton released in hopes of influencing the outcome of the UK’s Gambling Act review declared that loot boxes are “structurally and psychologically akin to gambling.” 

On the other side of the controversy, video game industry spokespeople claim that their games are made to satisfy and entertain the player, denying any malpractice. This is a view that even some users share, which is evidenced by articles online that instruct users on how to get around gaming restrictions.

How is this issue addressed by legislators?

You may have heard about loot box scandals, laws, or even bans in recent months. For instance, Belgium banned loot boxes in 2018, which prevented the sale of Diablo: Immortal within the country. Diablo: Immortal was also made unavailable for sale in the Netherlands. Dutch law currently enforces certain gambling restrictions that impact video games and may move towards an outright loot box ban in the future.

Wider regulation is also in progress. On January 18th, 2023, the European Parliament voted in favor of addressing several issues in the gaming industry. The vote concerned a report from the European Commission, led by MEP Adriana Maldonado López, which amongst other things recommended a video game age rating system (the proposed Pan European Game Information, or PEGI), and standardization across the European Union.

Additionally, the UK has formed a committee of legislators from the Department of Culture, Media, and Sport (DCMS) to address a revision of the Gambling Act which could regulate online gambling. The report has been delayed several times, but when it is released, it should provide regulatory suggestions for the UK government. In the United States, however, the issue has mostly been avoided by the FTC.

Legislating video games is inherently difficult. Regulatory bodies are reactive and move much more slowly than industry. This means that, even if loot box bans are implemented and effectively enforced, the industry will have already moved onto other forms of easy monetization.

What’s more, loot boxes are not the only form of questionable monetization within games. The use of a specialized in-game currency, for example, is a psychological mechanism by which players become less able to comprehend the real-life cost of the items they purchase within the game.

What are the signs of gambling addiction?

If you are worried that you or a loved one may be suffering from gambling addiction related to online gaming, it may be helpful to check some signs of their behavior.

The World Health Organization periodically compiles an International Classification of Diseases (ICD) which collects names and symptoms of various diseases. The latest version, the ICD-11 released in February 2022, is the first to report gaming disorder as a disease. According to that document, the symptoms of gaming disorder are as follows:

• Impaired control over gaming 
• Increasing priority given to gaming to the extent that gaming takes precedence over other life interests and daily activities 
• Continuation or escalation of gaming despite the occurrence of negative consequences

You can read more about the ICD-11’s definition of gaming disorder here.

The American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, or DSM, also names Internet Gaming Disorder as a mental disorder. According to that manual, the symptoms of the disease are as follows:

• Preoccupation with gaming 
• Withdrawal symptoms when gaming is taken away or not possible (sadness, anxiety, irritability) 
• Tolerance, the need to spend more time gaming to satisfy the urge 
• Inability to reduce playing, unsuccessful attempts to quit gaming 
• Giving up other activities, loss of interest in previously enjoyed activities due to gaming 
• Continuing to game despite problems 
• Deceiving family members or others about the amount of time spent on gaming 
• The use of gaming to relieve negative moods, such as guilt or hopelessness 
• Risk, having jeopardized or lost a job or relationship due to gaming

The future of loot boxes

Loot boxes are the result of the free market at work. Elden Ring, the 2022 Game of the Year and a game without loot boxes, sold 20 million copies in its first year of release and had a reported net revenue of around $1 billion USD. FromSoftware, the developers of Elden Ring, spent more than four years developing this game.

On the flip side, in the fiscal year of 2021, EA games reported a profit of $1.6 billion USD from their extra content sales, aka loot boxes. Comparing the earnings from both companies, it is easy to see, from a market standpoint, why a company would choose to implement loot boxes into their games. Loot boxes are easy to make, less costly than developing a game, and relatively risk free.

The debates behind loot boxes stem from free market practices that are built into video game design by companies who are incentivized to find risk adverse ways to generate value for their shareholders and employees. And while recent attempts at legislation reflect a possible need for regulation, government bodies will need to implement a more comprehensive approach and work with gaming developers to prevent a path that may lead to gambling addiction in gamers.