The Problem Isn’t Loot Boxes, It’s the Lack of Regulation

The games industry has been exposed to intense scrutiny for years over its inability to regulate loot boxes. Will Bucher, a litigation associate recently spoke at the Games Developers Conference (GDC), where he reviewed some of the legal pitfalls and loopholes concerning loot boxes around the globe.

Bucher expressed that loot boxes aren’t actually the problem. The problem is the lack of regulation, which can lead to loot boxes being used for alternative purposes, like creating compulsion loops intended to keep players playing longer than they may have intended.

Loot boxes have been linked to problem gambling and there have been calls for them to be banned. However, at the GDC the focus of conversation was still that loot boxes remain largely unregulated. Only the Netherlands and Belgium have asserted any level of control in Europe concerning loot boxes, with the Belgium Gaming Commission (BGC) threatening to take EA to court. In contrast, most other countries in Europe and U.S. have left loot boxes alone.

Furthermore, certain aspects of Chinese law challenging loot boxes are being largely unenforced and stating that loot boxes can’t be purchased using either real or virtual in-game currency. Microtranscations and loot boxes must be acquired through alternative means and developers aren’t allowed to use compulsion loops. Chinese law is requiring developers to be highly transparent about the odds for items in loot boxes, and they must also keep publicly-available records of the outcomes over the last 90 days.

However, Bucher said there is no evidence of game developers following these transparency requirements. In reality, what really matters is whether the Chinese government likes your game. Bucher stated:

What you see in China is a lot of rules, but really inconsistent enforcement of those rules. And the truth is whether you can offer a loot box in China depends on whether the government likes your game.

Bucher continued to emphasise that the future of loot boxes would be determined by developers at the GDC. Currently in March 2019 there isn’t any regulation, but that doesn’t mean there won’t be tomorrow. Developers and publishers are all part of a collective community that has to communicate about how they interact with players, customers, and about how they want to be regulated.

Bucher urged the GDC to be mindful of how they use loot boxes, and to take simple steps to prevent problems. For example, he argued in favour of parental controls so young children can’t buy loot boxes. In addition, he implored developers to reach out to players with problematic behaviour, like “‘gaming whales” who spend excessively on games, as well as the people who may spend less excessively, but still have a problem.

The loot box debate has become intense throughout most of the industry, with the media also writing numerous pieces on the subject. However, it’s not a clear-cut issue, according to Bucher.

Loot boxes generally don’t have a clear reward outcome. Instead, they’re used to create pay-to-win mechanics. This means players can’t win through skill or time spent gaming regardless of how long they play. Therefore, loot boxes aren’t really a problem- it’s the lack of transparency. When players are subjected to the randomised mechanics of loot boxes where the outcome is unknown, it’s psychologically akin to gambling.

For the foreseeable future loot boxes will continue to be a main feature of game development, even though some developers are now advertising that their games will not have microtransactions. While calls for an outright ban may solve the problem, it’s too unrealistic for the time being.