Loot Boxes and Gambling: Are They Really Linked?

The controversy surrounding loot boxes (items in games containing randomised content which can be bought with real money) seems to be ever-increasing and will not go away anytime soon. They’re sweeping across most AAA games nowadays and have been subject to controversial discussions.

Now, a recent study presented to the Australian Environment and Communications Reference Committee,  which surveyed over 7,000 gamers, has found there are links between loot boxes and problem gambling behaviour. The survey was conducted by Dr David Zendle (PhD), in response to a journal article published in Nature Human Behaviour, titled ‘Video game loot boxes are psychologically akin to gambling’.

This could result in lasting damage to both the industry and players.

Background

It’s been about 16 months since Middle-Earth: Shadow of War used loot boxes as ‘war chests’, prompting a furious backlash from fans. Whilst it wasn’t the first game to include loot boxes, it received one of the more extreme examples of criticism. Players could simply buy weapons, armor and runes to level up their gear, instead of grinding. Therefore, when the defintive edition was released earlier this year, the developers apologised with an on-screen message confirming that buying war chests was no longer possible.

However, another AAA title before Middle-Earth: Shadow of War was slammed for the unfair use of loot boxes. This was of course, the infamous Star Wars Battlefront II. Players around the globe awaited the release of this game with bated breath, only to be overwhelmingly disappointed by the controversial loot boxes.

Online players found that those with extensive disposable income could buy the best gear, thus topping PvP leaderboards. As a consequence, it practically nullified ambitions to grind for gear. So players reacted angrily with such thunderous intensity. However, like the afformentioned Middle-Earth: Shadow of War, EA has finally dropped loot boxes too.

Fortnite, an immensly successful free-to-play game, significantly contributed to digital sales hitting record highs over November’s Cyber Weekend. However, its one of the latest culprits accused of using predatory gambling techniques to encourage spending. The game uses ‘V-Buck’ coins as currency, which can be quickly bought or earned by grinding. With these coins, players can buy Llama loot piñatas (loot boxes) which give a random reward. The legendary ‘troll loot truck Llama’ costs over $12 (£10), but contains 20 random items.

Bungie’s Destiny also encourages players to purchase silver through the ‘Eververse’. Another example of how real, tangible money is converted into in-game currency to buy random chance loot boxes in the form of engrams.

Are loot boxes really like gambling?

In addition to the information presented to the ECRC, it was found the more acute a gamer’s gambling problem was, the more likely they were to spend large amounts of money on loot boxes.

The report identifies two ways that buying loot boxes can lead to harmful behaviour. “Loot boxes act as a gateway to problem gambling amongst gamers” and “Loot boxes provide games companies with an unregulated way of exploiting gambling disorders amongst their customers.“

Whilst these claims about the negative impact of loot boxes may seem exaggerated to some, there are similarities with the psychological mechanisms commonly found within gambling. These are: variable ratio reinforcement; sensory feedback; entrapment systems (to motivate more spending); and ready, constant availability.

The study clearly demonstrates a link between loot boxes and problem gambling, and loot boxes also appeared to be a better predictor of problem gambling than depression and drug abuse. However, it’s important to note that it has not been legally defined as gambling, because the gamer always receives a ‘prize’, so therefore, technically never ‘loses’. This is essentially a moot point, which undermines the complex attraction to gambling.

The psychological definition of gambling, as defined by Mark Griffiths, a psychologist at Nottingham Trent University, says that gambling consists of 5 core components: the exchange of money or items of value; an unknown future event determines the exchange; the outcome is partly determined by random chance; it’s possible to avoid loss through non-participation; and winners gain at the expense of the loser.

The industry has responded to links between loot boxes and gambling, but usually by dismissing concerns. In fact, the president of the Entertainment Software Rating Board (ESRB), Patricia Vance, compared loot boxes to baseball cards.

“We do not consider loot boxes to be gambling,” Vance said. “…We believe that loot boxes are more comparable to baseball cards, where there is an element of surprise and you always get something.”

 This argument only focuses on the similarities, but fails to recognise the crucial differences. One major difference is that players can buy large volumes of loot boxes at a higher velocity than trading cards. The report also shows spending large amounts on loot boxes is linked with problematic spending on other forms of gambling.

Therefore, this suggests that buying loot boxes should be recognised as a form of gambling.

What will the future hold?

The report makes several recommendations, but they mostly call for loot boxes to be regulated. This could be the direction loot boxes are heading in, as shown in the examples below.

Jen MacLean, chief executive of the International Game Developers Association (IGDA) called for industry action on loot boxes. MacLean wants the industry to impliment 3 key things: not to market loot boxes to children; disclose the odds of rewards when purchasing loot boxes; and campaign to raise awareness of parental controls that limit how players engage with games.

Belgium is considering taking EA to court for violating anti-gambling laws over illegal loot boxes. The Belgian Gaming Commission (BGC) investigated the use of loot boxes, and found that they fell under existing gambling laws. Other companies like Blizzard and Valve were also named within the investigation, but have since pulled their products. If the BGC’s case is successful it could transform gambling laws in other EU countries.

When developers announce new games, loot boxes have become increasingly involved. However, it’s the exclusion of loot boxes and paid in-game content which have become a main selling point. For example, Obsidian Entertainment’s Tim Cain has already confirmed their new sci-fi RPG The Outer Worlds won’t have microtransactions.

The industry has exploited gamers, coercing them into spending money on loot boxes for years, and Zendle’s report highlights the uncomfortable truth that loot boxes are psychologically akin to gambling.

Furthermore, the severity of a gamer’s gambling problem directly influences the frequency and volume of buying loot boxes. Whilst loot boxes aren’t legally defined as gambling, the industry should review its use as an ethical standard, if nothing else.