Ever since loot boxes and other games of chance were introduced into video games back in 2005, such as in mobile games like Puzzle Pirates, it has become increasingly concerning to many gamer’s as to just how many of these practices, which were unheard of for many years, have managed to creep into some of our most beloved titles such as Call of Duty, Star Wars: Battlefront and Overwatch.
So, in case you have been living under a rock for the last decade when it comes to gaming news, let me give you a run down on what a loot box consists of and what all the talk is about when it comes to the controversy surrounding them.
Loot boxes are a sub-genre of micro-transactions which is a transaction made in-game with real money to pay for a digital currency/item/boost etc. They are the real life equivalent of a slot machine, that allows players to spend real life money to unlock items (in some cases that can be sold on to make a profit) by paying for a chance to unlock gear that they want. The first mainstream game to properly introduce this into the limelight was in Call of Duty’s 2014 shooter Advanced warfare, where players could spend their money on a single crate or buy multiple that would give them a chance to unlock a new variant of a gun, which would come with a skin as well as stats that would give the player an overall advantage.
Examples of loot-boxes from Call of Duty: Advanced Warfare.
One of the main reasons why it was so controversial was due to the fact players had already paid £49.99 for the base game and were now being expected to fork out for DLC as well as supply drops just to stand a chance of winning in competitive multiplayer matches.
Fast forward from 2014 to 2017 and the controversy grew, with Electronic Art’s hit game; Star Wars Battlefront 2 introducing loot boxes to their game which would allow players to not only gamble at a chance to gain new skins and variants, but also unlock new hero’s that would lead to a further split among the player base from those who could and could not afford to pay vast amounts of money to unlock the items.
Players had seen all they needed to and started to boycott the game. For the first time ever taking a stand against loot boxes and the publishers that allowed them to exist, by boycotting the game and review bombing it on steam (leaving intentional negative reviews about a topic on the games store page to get their views heard). This became global high-priority gaming news and even prompted the Chief executive of EA to say, “We got it wrong” and furthermore decided to remove the loot boxes from the game.
The most unforgiving nature of loot boxes is that they are seen in video games that are marketed to people as young as 3 years old according to their PEGI age rating, which raises the big questions on their morale and ethical conduct.
A closer look at the profits
To start with let’s look at some of the reasons why companies are using loot boxes as a way of revenue, and some of the figures which could outline their success.
According to Juniper research in the last year, just over 5% of gamer’s had purchased a loot box In a game, with a total revenue for companies to be predicted at around $15Bn. Although it is predicted that this figure will increase to 20.3 billion in 2025, the report states that loot box sales may be on the decline due to gamer’s “fatigue and market legislation’s”.
Other games such as the Popular online First-person-shooter CS: GO, have skins that can be traded on Steams virtual marketplace for real money, with Valve (the creators behind CS: GO) taking a 5% tax on all items sold, with an additional tax of 10% if that item is from CS: GO. Some skins in the game such as the AWP Dragon lore, have been known to sell for as much as $61,000 USD on private selling sites due to their rarity.
Although games such as CS:GO are rated 18/Mature, Valve and other games companies have no way of verifying your age, apart from the initial ‘state your age’ page on the store, which requires no form of ID. Therefore, there is no tangible way of checking who is meant to be playing the game and who is not, therefore leading on to the problem of underage gambling.
With 44% of 11-16 year-olds in a You Gov survey stating that they had spent money on a game of chance in a video-game in 2019, and with a further 6% saying they then used that item on a gambling site, is it about time we started holding companies to account for their failings to properly tackle potential problematic under-age gambling?
The science behind gambling
To dive deeper down into the rabbit hole of gambling within these games, I needed to talk to somebody who had an intricate knowledge of how our brains respond to these games. I managed to contact Dr Jonathan Waddington, the head of psychology at Plymouth Marjon University, who was a gamer back in the 90s.
I wanted to know what exactly made gambling so addictive, especially for young people.
“What we know about gambling is that it taps into those same pathways in the brain that are involved with addiction such as drugs. When you gamble, your brain releases a neurotransmitter called dopamine which is a chemical that acts as a reward, making you feel excited.”
“The trouble is the brain eventually gets used to the dopamine release, which can make that feeling of getting excited from the dopamine release more and more difficult to achieve. This then encourages people to keep gambling to try and recapture that winning feeling.”
He also said that “The brain not only releases dopamine when you win, but also in anticipation of winning. It’s that anticipation that you might win that gives you the dopamine buzz.”
This is a crucial point in looking at why gambling could potentially be so important to understanding why gambling in games is so prolific, as each loot-box in a game has an opening animation, some being longer than others which are complete with their own sound effects and sometimes even rare effects when a player unlocks a specific item rarity.
Above is a typical loot-box unboxing, with colours and sounds to show the rarity. Credit to ADAPT Chance
When asked about whether he was concerned about the effect the loot boxes in games could have on the social and mental impact of young people, Jon said:
“We don’t yet know enough about these practices to determine their long term effects. The line between gambling and gaming is blurry. There are plenty of online casinos and game mechanics such as loot-boxes and gacha games out there”
See the full short-interview with Dr Johnathan Waddington *here*
He further added about their legality:
“I think the law is pretty clear about legal gambling age in some cases but not so much in others. So, I think with online casinos, it is less of a concern. But how easy it is to police in games is up to debate. From a psychological point of view, one concern would be that even if children are protected from betting money, like the gambling mechanics that are used in video games, that might turn into compulsive behaviors by the time they reach adulthood.”
Are companies doing enough to stop under-age gambling?
Back earlier this year, Epic games found themselves at the forefront of a lawsuit for their activities in Fortnite and Rocket League, which revolved around the concepts of loot boxes and promoting gambling to kids/teens. Epic Games promptly removed the loot boxes from their games, but they denied any wrongdoing in legal regards. They later stated on their Fortnite social media accounts:
“We believe players should know upfront what they are paying for when they make in-game purchases.”
They agreed to settle the lawsuit by giving players free V-Bucks/Rocket League credits who had spent a minimum of $8 or more when the loot boxes were available. This was however only for players in the U.S.
We reached out to Psyonix, the creators of Rocket League, for their response on if switching to an item shop where players can choose to buy a specific item rather than spend infinite amounts of money gambling for items in crates, was the right move.
A press spokesperson for the company said that the new implementation of the blueprints system gives players “Transparency of purchase”.
We went further and asked them for their figures on whether the switch to this method was more profitable and whether more companies could benefit from being more transparent. Alas, they denied the request.
An inside look
To delve deeper into this issue, I needed to ask an expert on their views on the current situation within these games.
I managed to get in contact with Mario Cacciottolo, a former BBC journalist now working as a PR and branding manager for sports betting website ‘SBO.net’.
Marios’ main forte is within the E-sports side of gambling; however, he has also been at the forefront of discussions when it comes to video game gambling research.
I wanted to find out from his perspective if video game companies should be doing more to tackle the issue in their games and what his personal thoughts were on the subject.
“UK wise there are murmurings that a pending government review of gambling laws that includes a consultation on loot boxes is expected to recommend legislating against them. However that turns out, betting companies should be putting age verification, spending limits and ‘are you ok’ checks in places on all games – including the massively popular Fortnite. Mirroring what companies such as Bet365 do with more regular gambling.”
I then proceeded to ask what he could see for the future of video game gambling to which he said:
“We have seen over a 50% increase on e-sports betting in the last year, and a Gambling Commission report published in 2020 survey virtual sports betting increased by 88 per cent. Alongside video games and VR, I can only see the gambling option being presented to more people.”
(More information about Mario’s work and links to social media can be found here. )
So what we can see from Mario’s comments, is that perhaps video game gambling, especially within the games themselves, may be around for the foreseeable future. Though they need to be taking a more robust approach to combat the problem.
As the gaming world has slowly started to open its eyes when it comes to the damaging effects of gambling in video games, some countries are now tightening their restrictions on what video games can do to promote and distribute games of chance to their audiences.
To start off the fight-back against these practices, Germany’s commission for youth media protection released information in 2018 from the University of Hamburg, that loot boxes had features “Typical of gambling markets” with the head of the commission Wolfgang Kreißig saying it is “conceivable that these loot boxes could violate the ban on advertising to children and adolescents.
Further adding to the conflict in April 2018, the ‘Dutch Gaming Authority’ issued a legal opinion that “games which sell both sell loot boxes and have the ability to transfer items are illegal.” They created a report to find out the true nature of these practices and what games had evidence or traces of gambling in them. stating in the report they created, simply titled ‘A study into loot boxes: A treasure or a burden?’ that of the ten games of which were closely studied in the report, four were in violation of the countries gambling laws and the remaining 6 games were “Nevertheless fostered the development for addiction.”
Following up on this, Belgium completed its study on systems in four games. The damning findings showed that the four games tested had breached Belgium’s laws on gambling in one way or another, with each game promoting gambling in a specific way, whether it be via celebrity athletes or flashy images, these games had each broken the law and were subsequently subject to fines of €800,000 unless they removed these methods of gambling, to which they acted and promptly removed the loot box systems for players in Belgium.
Belgium’s minister of justice, Koen Geen, stated that “A dialogue with the sector is necessary.” Proceeding to say “It is often children who come into contact with this loot box system and we cannot allow that.”
With damning reports from two nations, surely the likes of the United Kingdom would stand behind them on this matter? Well, you will be mistaken because surely enough, the UKIE (The association of UK interactive entertainment) which is tasked with representing the UK’s gaming industry, asserted their stance that loot boxes are not a form of gambling and are “Already covered by gambling legislature in the UK.”
The UK gambling commission however says differently and says that although loot boxes are currently not covered under the legislature, there is “Concerning growth at the number of examples where the line between video games and gambling is becoming increasingly blurred.”
You can read the full report here.
The growing concern has led to the commission reviewing the gambling act of 2005 and has called for evidence about the gambling behaviour caused by loot boxes, to support a special report about the problem. This received over 30,000 responses over the space of 10 weeks. It closed for responses on the 22nd of November 2020. As it stands the commission is finalizing it into a ‘white paper’ that is supposed to be published by the end of the year on their findings.
Until then, loot boxes will still be around for the UK and much of the rest of the world, though whether they will be for much longer remains to be seen. Will loot boxes dig their heels into the cliff edge of gaming pet-peeves forever? Or can we expect the curtains to be closed permanently in the near future?
The answer remains to be seen.