What are video game loot boxes and do they encourage gambling?

19th March, 2021    |    By  ABC    |     1.1k

Loot boxes are a feature of computer games that allow users to obtain hidden goods that can help them get to higher levels or add features to their online character. But the contents of a loot box are unknown to the user until they open it. Some might call that a surprise, others call it gambling. Particularly when you consider that players can now use real money to buy loot boxes to help them get to higher levels sooner.


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What are video game loot boxes and do they encourage gambling?

Here’s a box. We’re not going to tell you what’s inside. It might be something kind of awesome, then again, it might not. How much would you pay to find out? Every day, people, including kids, are spending millions of dollars to open boxes just like this, all in the hope of winning big. If you think that sounds like gambling, you’re not alone. They’re called loot boxes, and they have become one of the most controversial aspects of the video game industry.

Here’s how a loot box works: As a player progresses through a game, they’re rewarded with loot. That’s the name used to describe in-game items—things such as weapons or cosmetic perks that can help you customize your character’s appearance. You could give them a hat, a shiny new sword, or some other accessory to dress them up for fun. You can earn loot by doing well in the game or by earning currency that you find along the way. Now you’ve got money to spend at the in-game store. Sometimes these stores are designed to sell just one thing: loot boxes. Think of it as a mystery box. What you get for your virtual cache is a surprise, and like most surprises, there’s an element of chance.

If you think that sounds similar to gambling, you’re not wrong. Like poker machines, loot boxes use sound and visual effects to create a buzz of excitement and anticipation. Pokies and loot boxes also dangle small rewards in front of the player while at the same time tempting them with the potential to hit the jackpot. Because some loot or rewards are more common than others, certain items appear frequently, while others are rare. All this triggers a surge of dopamine in the player’s brain, giving them that feel-good rush that keeps them coming back again and again.

Players who use their virtual cash to buy loot boxes can never be quite sure if they’ll unwrap something rare and desirable or an item that’s common and useless. The in-game currency or points you use to buy loot can take a long time to build up, but there is a way to take the fast track for a chance at those rare treasures. Forget about make-believe coins and gems—you can spend real money instead. It’s much faster to use actual money to exchange for more loot boxes.

One report estimated that in 2018, players around the world spent more than 40 billion dollars on loot boxes. A survey run by the UK’s Gambling Commission found that nearly one-third of children aged 11 to 16 spent money on them. But can buying loot boxes really be considered gambling? Well, it depends who you ask.

There are now a number of studies that show that loot boxes are associated with gambling and gambling problems. They are a random chance item—you have to make a payment, and you get something that’s of value. It starts to look a lot like a gambling characteristic or a gambling mechanic within the game, which is available to people without any age restrictions or other consumer protections as would be required by any other gambling activity.

The video game industry denies this. “We agree with the UK Gambling Commission, the Australian Gambling Commission, that they aren’t gambling, and we also disagree that there’s evidence that shows it leads to gambling,” says the Interactive Games and Entertainment Association. They say that loot boxes use the same “surprise and delight” mechanics that products such as Kinder Surprise chocolate eggs have used for years. But despite the resistance, a growing tide of suspicion and criticism is prompting the games industry to act.

Some developers are slowly phasing out loot boxes voluntarily. Others are changing the mechanics so they’re more transparent. The online sensation Fortnite now allows players to look inside loot boxes paid for with real money so they can remove the element of chance and decide if it’s worth the cost. Other games have removed them altogether.

In 2018, Belgium became the first country to ban loot boxes, arguing that games of chance in video games will cause great damage to people, family, and society. Other countries could soon follow suit. In Australia, loot boxes have been the subject of two government reports. One recommended looking for options for restricting access to loot boxes in video games to adults aged 18 years or over. But for now, loot boxes are largely unregulated, so it’s a case of loot box buyer beware.