Loot boxes: gambling or harmless fun?

What are loot boxes?

Loot boxes are a form of monetisation featured in many free-to-play (and some full-price) video games. They often take the form of an in-game mystery box, which rewards the player with a random item or items – think of it as a virtual ‘lucky dip’. These rewards may include in-game items / assets such as: skins (costumes), weapons, additional player characters, and more. The rarer an item is, the lower the odds are of it showing up in a loot box.

In some video games, loot boxes can be earned as a reward for playing. However, many video games allow players to purchase loot boxes with real money. Prices for loot boxes can differ between games.

Loot boxes and gachapon

While the idea of obtaining a box holding a random item or items has proliferated in games developed in the West, the concept is similar to gachapon (aka gashapon) – a Japanese term used to describe high quality capsule toys sold in Japanese vending machines. Each plastic capsule contains a random toy.

Many popular free-to-play mobile games developed in Japan, such as Puzzle & Dragons or Fire Emblem Heroes, contain a similar practice: using in-game resources or real-world money to obtain a random item or character. The term gachapon (or gacha for short) is increasingly being used outside Japan to refer to loot box mechanics in a game. However, spending resources to obtain randomised items tends to be more central to making progress in true gacha games. In contrast, loot boxes are generally an option, and less of a core requirement.

Where did loot boxes come from?

The origins of loot boxes can be traced back a long way, but they first an appearance around 2004, and eventually moved into the western market from 2009 onwards.

At first, they were prominent in MMORPGs (e.g. World of Warcraft) and MOBAs (e.g. League of Legends), but began spreading across a variety of genres, including many social media video games.

Since then, loot boxes have become a popular way for free-to-play developers to make money. They feature in many popular online games, including Fortnite and Overwatch, which is why they’ve begun to receive mainstream attention.

World of Warcraft game play still
Copyright © Blizzard Entertainment

What makes loot boxes in video games appealing?

Scarcity of items

Loot boxes contain items ranked in order of rarity, with the different categories reflecting the chances of players receiving them.

Knowing that you could get something a comparatively small number of players have, can make opening loot boxes incredibly exciting. This desire is increased when season-specific items are included; the time limitation makes them rare. It can generate a feeling of immense pride for a gamer to own, for example, an ultra-rare in-game costume or prop.

A select handful of games allow players to trade items between each other, meaning any unwanted items can be exchanged for something you really want.

In some cases, having the rarest skin or weapon can become competitive. If a player is lucky enough, they may even receive an item which provides a distinct advantage within the game.

Exciting visual and audio cues

In the same way that slot machine design taps into human psychology, the graphics and sound effects which shape the experience of opening a loot box try to invoke excitement and pleasure. For example, anticipation is generated by animating an unopened loot box so that it shakes and jitters on the screen. When items fly out of a freshly opened loot box, accompanied by a flash of light and a musical fanfare, it’s easy to understand the euphoric nature of that moment.

Comparing the experience to a slot machine isn’t unreasonable. A growing disquiet has emerged in public discourse, in which loot boxes are beginning to be viewed as a form of easy-access gambling: just click and win (for a price). Such is the concern, that activists and government officials have begun to speak out against them in a variety of countries, including the UK.

Star Wars Battlefront loot box still
Copyright © Electronic Arts

Why loot boxes could be considered a form of gambling

Whilst some video games do give players the opportunity to earn loot boxes through play, most provide the option of paying real money to get them. It’s this real-world money element that has people so concerned.

The proliferation of problem spending

Where there’s a chance to spend money, there’s always a potential to spend a lot of it, especially if the player in question struggles with self-control (or in the case of small children, don’t understand the concept of spending real money). If a player wants an item, they could just keep buying loot boxes until they succeeded. Some players resort to buying the rare items they want on ‘black market’ websites, where items are often sold at astronomical prices.

The desire for rare items can lead players down a destructive path. While some have argued that children who engage in this type of behaviour should be monitored more closely, it’s not just children who are vulnerable to problem spending. The chance of a rare item, the competition, the exciting audio and visual cues: all these elements, when mixed, can encourage addictive behaviour to surface – especially among players who may have a past or current issue with gambling.

The compulsion loop

Many tactics used to prompt loot box purchases, e.g. including a ‘buy more’ option on the screen after a loot box has been opened, can be linked to compulsion loop game design: that is, the presentation of game elements which compel the player to continue playing. In this case, the prospect of receiving a rare item can keep players spending money on loot boxes, which is behaviour that psychiatrists have likened to gambling.

Games of chance

It doesn’t help that some video games even go as far as to use casino-based imagery. For example, a trailer for the pro-basketball simulation NBA 2K20 was removed after the publisher, 2K, received complaints about players in the ad using a virtual slot machine. This trailer was especially problematic, considering the game has a recommended age rating of 3+.

NBA 2K20 slots loot box screen shot
Copyright © 2K Games

In the Fifa series of football games, the loot box concept has been presented in a way that contextualises the idea of games of chance within popular football culture. The series’ most popular online component, Fifa Ultimate Team (aka FUT or UT), requires players to build their dream squad by earning coins through play – or buying new player cards as part of a ‘pack’, using real-world money.

The idea of tearing open a pack of player cards hearkens back to the practice of collecting professional football stickers and trading cards among children. While still a popular hobby, it enjoyed massive popularity in the pre-digital age, between the 1980s and early 2000s. As a result, the concept is an indelibly ingrained cultural touchstone for adults as well as children: players immediately understand the concept and identify with it, thanks in part to a feeling of nostalgia, as well as a desire to obtain the best team possible.

Just like the stickers and cards produced by the likes of Panini, part of the appeal of obtaining packs comes from the ‘surprise’ of opening them: the purchaser does not know which stickers or cards will be inside the pack until they open it. The same is true in FUT: the player does not know who be joining their squad selection until the ‘packs’ have been opened.

Screenshot of Lionel Messi on Fifa 2020 Ultimate Team loot box
Copyright © EA Sports

While the added dimension of being able to trade cards with other players adds an extra element of motivation, affording a certain amount of ‘opportunity’ or autonomy to the player (just like swapping stickers in the playground) it’s difficult to see the entire idea as little more than a loot box mechanic – just with an amended ruleset. There’s still a level of probability involved in obtaining the best player cards: the more valuable cards are – naturally – rarer, and therefore harder to obtain.

The popularity of Ultimate Team packs within FIFA is clear: it has been reported that the publisher, EA Sports – generates more revenue from FUT than it does from overall sales of the core game itself.

EA Sports has drawn criticism for the inclusion of Ultimate Team packs. Just as in the case of 2K’s basketball game, many see this as little more than a legitimised form of gambling which is accessible to minors.

With increased pressure to impose tighter restrictions on loot boxes, it is unclear how the future of FUT will pan out. In Belgium, where loot boxes have been officially ruled as a form of gambling, EA Sports has opted to continue the inclusion of Ultimate Team packs. However, they can only be purchased with virtual coins acquired in-game, rather than with real-world currency.

Gambling in video games has been debated by the government in the house of parliament

Are loot boxes regulated by the government?

Some representatives from the gaming industry claim that game developers and publishers can regulate themselves without the need for the government to intervene. However, some think self-regulation simply isn’t enough.

In the UK, the Department for Culture, Media and Sport (DCMS) has advised Parliament to take steps towards controlling loot boxes. The Commons Select Committee report which prompted this request covered the effects of immersive and addictive technologies, including the costs of mechanics like loot boxes, and attacked certain tech companies who were deemed to exhibit a ‘lack of honesty and transparency’ when explaining the motivations behind putting loot boxes in their video games.

The DCMS committee suggested that games containing loot boxes should be labelled to indicate that they include gambling mechanics. They also recommended that any such game should carry a recommended age rating of 18+.

What is the likelihood of these regulations being passed? Currently, loot boxes aren’t classified as ‘gambling’ under UK law, as players are still guaranteed to get something, and that ‘something’ has no real-world value. However, as more governments continue to take notice of loot boxes, it may not be long before we start seeing restrictions placed on the online games we play.

 

At Ghost, we don’t just love gaming; we enjoy living it: diving into the culture, examining the industry, figuring out what goes into making the virtual worlds we love so compelling.

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