Video Game Loot Boxes: Just A Game Or A Form Of Gambling?

In recent years player packages have become widespread in the video game industry. This widespread popularity has let many people notice a lot of similarities between them and gambling.

Together, we will explore what loot boxes are and what effect they have on individuals who use them.

How do loot boxes work?

How do loot boxes work?

Loot boxes are in-game prizes that can be received for accomplishing different objectives or for paying a sum of real money. In most cases, they require payment before receiving one such package.

When opening the prize, players can obtain, depending on the game, different character customizations, in-game currency or in-game items such as body armour or weapons. However, the loot box outcome is entirely random, making them based on chance.

Thus, the whole idea of loot boxes as a form of gambling emerged.

Although loot boxes are relatively new, video games and gambling have been interacting with one another for quite some time. Many of them act as a game inside a game and can range from slots to poker.

The rise of freemium

The loot box idea first appeared in free-to-play mobile games, where a player could invest some money and receive powerups. Without them, players could not advance to some stages, being left behind by individuals that invested real cash.

For this reason, the concept of freemium appeared, where a game that advertises itself as free limits the players’ experience if they do not engage in additional in-game purchases. Depending on the game, this notion could involve loot boxes or direct item purchases.

However, over the years, this model developed into a business strategy. Its use is mainly a marketing tool to help an emerging company grow.

Are loot boxes the same as gambling?

Now that we defined these prizes and set the general background in which they appear, it is time to see if they are gambling and there are 123 games who can prove it.

Most lot boxes involve some payment directly or indirectly. Furthermore, their outcome is unpredictable since a player can receive something valuable or not. Similar gambling involves real money, and the result is also unpredictable.

Online casinos use the same process as loot boxes to determine the conclusion of an event, that being a random number generator or RNG for short.

We can safely say that gambling and loot boxes are not identical. But the second could be called a form of the first. Furthermore, the gambling game that’s almost like the in-game prizes is scratch cards.

The link between loot boxes and gambling issues

The link between loot boxes and gambling issues

This similarity with games of chance has left many people wondering how loot boxes influence the individuals who use them.

Of thirteen studies, twelve have found a direct link between loot boxes and problematic gambling behaviour. Furthermore, young men with less developed educational backgrounds have the highest probability of using this type of in-game prize.

Experts say this type of advertisement uses psychological tricks to persuade individuals to buy more loot chests. Some methods used are limited period offers special promotions, or abusing the human fear of missing out.

An emerging threat to children

Children are the most vulnerable category that’s exposed to loot boxes. Considering the high number of people who play video games, this can develop into a more significant problem.

Studies showed that 93% of children engage in computer games; 40% use loot boxes out of them. For this reason, responsible gambling organization have raised their concern regarding this issue. The main point raised is that today gambling has become part of many kids’ daily lives.

Demand for regulations

Many people have started to call for state officials to regulate any in-game microtransaction for the reasons mentioned above. A poll conducted in the UK showed that 60% of citizens consider that loot packages should be tread as any other form of gambling, thus being regulated as such.

Some nations have already done this. Belgium, for example, altogether banned loot boxes out of concerns for the effect it has on children.

The vulnerability of young adults further validates the demand for regulating this type of microtransactions. According to the UK gambling commission, 25000 minors between 11 to 16 years old have gambling issues, with 36000 being at risk.

Not everyone agrees

The Entertainment Software Rating Board has another opinion on the matter. This institution rates games based on the appropriate audience, giving it a tag from E to M for a mature audience. They do not consider player packs a form of gambling and refuse to use them when evaluating games.

Furthermore, the Entertainment Software Association of Canada does not use gambling when referring to games that feature microtransactions. However, they reached a compromise, making game developers put an In-Game Purchases tag on these products.

Conclusion

Many controversies surround loot boxes, and numerous people want to push regulations. This is primarily due to their effects on young adults and children. However, loot boxes are here to stay since many companies depend on the revenue from loot crates.

Overall, the issue is still unresolved, and as time passes, the controversy will eventually reach a boiling point. Eventually, regulations will most probably happen in multiple countries. Still, like many things, this will not be the case for every part of the world.

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