Game developers and lawmakers are at daggers drawn over whether loot boxes constitute a form of gambling. Loot boxes are digital containers that are a part of a growing number of games, and that offer random rewards, based on chance, to the buyer.
Now, the "gambling" element that some claim to be present in loot boxes, comes the fact that reward is distributed based on chance. In reality, though, the type of item or reward you can claim from a loot box is always displayed, along with the percentage of fulfilling the condition.
This gives teeth to developers and publishers such as Electronic Arts to push back against the calls to shut down loot boxes, as they represent a form of gambling.
Loot Boxes: A Big Business with a Moral Dilemma
Developers definitely do not want to see loot boxes equated to gambling. The gaming industry is projected to hit $160 billion in 2022, largely thanks to the sale of these in-game goods that gamers desire.
According to Juniper Research author Lauren Foye, developers have become very adept at identifying what a gamer needs and providing the desired good in a form that drives further benefits for the company extending the offer.
"Loot boxes play upon the gamers' desire to have the most prestigious and sought-after in-game items, whether these be weapons or cosmetic goods," Mr. Foye said.
According to him, gambling and loot boxes are connected, but the main purpose of the loot box, other than generating revenue, is to extend the life cycle of a game and drive better engagement with the audience. This has been replicated in one of EA's latest releases, Apex Legends.
Mr. Foye's is but an opinion. Loot boxes have been suspended in Belgium and the Netherlands where lawmakers have ruled firmly against them as "illegal". Both countries are known to be far more gambling-averse than the United Kingdom, where legislators have taken a milder stance on loot boxes.
Why the United Kingdom Doesn't Believe Loot Boxes Are Gambling?
Whatever the truth, having a confirmation from legislators is always something that developers, who have managed to generate a hefty chunk of their revenue from the sale of loot boxes, want. Valve and EA, in particular, are happy with how the United Kingdom treats loot boxes.
First, there is the national watchdog that monitors gambling activities. The UK Gambling Commission (UKGC) has been actively following the emergence of new technologies that smack of gateways to underage wagering.
Yet, the national governing body isn't convinced that these products are indeed an invitation to gamble among youngsters:
"We commit ourselves today to working together to thoroughly analyse the characteristics of video games and social gaming."
Recently, the UKGC had to sit down with the BBC and argue against a misinterpretation of its own words that loot boxes were indeed gambling. Meanwhile, EA VP Legal Kerry Hopkins spoke to UK MPs arguing the case for loot boxes recently.
According to Ms. Hopkins, loot boxes were no different than a "Kinder Egg", quite fun and ethical on top of that. Yet, dissent is growing.
Nothing Special About a Kinder Egg, Hopes Pinned on Loot Boxes
Ms. Hopkins' reasoning appears sound were it not for one small snag. Loot boxes usually cost around $3 whereas you can have a Kinder Egg for around $1. Even then, with an egg, you just expect a toy, but nothing beyond that. Loot boxes, on the other hand, hold a promise of something unique that is coveted by gamers.
EA in particular has been criticized on multiple occasions about how it adjusts the percentages for loot boxes. One user on Reddit compiled a data which demonstrated that returns were poorer than expected after spending €3,800 (around $4,300).
As another participant in the discussion put it, with games such as Hearthstone, spending a similar amount of money would guarantee you all cookie-cutter builds in the game, whereas in the case of the FIFA Ultimate Team experiment, the results didn't entirely justify the investment.
Besides, EA has already been criticized about its Battlefront II debacle that came with wave of criticism on social media and forums.
Many of the powerful characters were locked behind loot boxes, something that the company didn't advertise. EA has been rather determined in the past in the implementation of loot boxes, but it eventually had to cave under fan pressure.
Loot boxes have the ability to stilt gameplay and balance, which has been another popular line of criticism against them.
The Scientific Case Against Loot Boxes
Loot boxes are gambling to some extent. In a research led by Dr. David Zendle and Dr. Paul Cairns and commissioned by the Australian Parliament’s Environment and Communications References Committee, it has been established that people who exhibit signs of gambling addiction are far more likely to spend more money on loot boxes s well.
While developers could probably argue that loot boxes are not a cause of a problem, but just yet another outlet for users' addiction. The researchers specified that these digital goods were helping spread the problem:
"Our large-scale study found important links between loot box spending and problem gambling. The more severe a gamers’ problem gambling was, the more likely they were to spend large amounts of money on loot boxes. These results strongly support claims that loot boxes are psychologically akin to gambling."
Yet, the study doesn't explicitly say that loot boxes are harmful, but rather establishes many similarities that prove the link between the activities.
Things Remain Unchanged
EA tried to stall the withdrawal of loot boxes from the Belgium market, but it caved on January 29, 2019 to implement the measures and sound a retreat from the country. For the time being, loot boxes are far from being called a form of gambling, but having mainstream gaming companies call them "fun and ethical" is borderline irresponsible. The saga continues and game developers must do better to alleviate fears.