“Loot boxes are like scratch-off cards: you open one out of curiosity, get a little prize, think ‘darn, maybe next time,’ and then it just turns into a habit,” says Brian. “I got a big prize with my first $20 and thought, ‘Hey, maybe I’ll get something good again,’ and spent another $5 next week, and then $5 more. It’s a disturbingly easy trap to fall into.”
Brian (not his real name), a 25-year-old American Reddit user who responded to a Guardian call-out, is one of millions of players who buy “loot boxes”, lucky-dip boxes that cost real money and yield random virtual rewards. Loot boxes have attracted controversy and comparisons to gambling in recent months, prompting countries including Belgium and the Netherlands to determine that their inclusion in popular games such as Fifa, Overwatch and Final Fantasy: Brave Exvius contravenes local gambling legislation.
Now, politicians and gambling-awareness organisations in the UK are calling for regulation, too.
Once upon a time you would buy a video game for £40 or so, and there would be no option to spend more. Now, however, with a huge number of games on smartphones that are initially free to play, and spiralling development costs on big-budget games, the makers and publishers of video games have had to find other ways to make money.
Some games offer virtual items for sale, or ask players to pay a small amount of money instead of waiting a few hours for a new mission to unlock. Others charge for optional extra content. Loot boxes are increasingly becoming part of the business model for developers forever searching for new revenue streams, as profits hit record highs.
The items won – typically “skins” that change the look of in-game characters or items – can often be sold and converted into real money on emerging online secondary marketplaces that the games industry has been sluggish to clamp down on.
Consternation around loot boxes centres on the fact that they contain unpredictable rewards. On Fifa Ultimate Team, for instance, there’s a chance you might unearth Harry Kane in one player pack, yet be lumbered with Peter Crouch in 10 others. It is possible to spend thousands and never unearth the rarest players, like Cristiano Ronaldo. The chances of obtaining the rarest rewards from a loot box vary from game to game, from around 10% to under 1%.
EA has recently insisted that Fifa Ultimate Team is not gambling – despite it being a game of chance. However, a minority of players, like Brian, report that loot boxes have led to addictive behaviour.
“I started spending on in-app purchases, moved to real video games, started on CS:GO skins, then into the gambling scene there,” writes Kensgold, a Reddit user who claims to have spent $10,000. “At my worst I was working two jobs and considering dropping out of high school. Please consider how unregulated micro transactions can affect the youth of the world.”
Sports magazine ESPN reported that Counter-Strike led one teenager into compulsive gambling. The game, they write, “has spawned a wild multibillion-dollar world of online casino gambling; it’s barely regulated and open to any kid who wants in”.
One gamer describes playing Final Fantasy: Brave Exvius, struggling for hours on one level before breaking their resolve and putting down $20. “I was adamant that I would not spend again,” he said, in a compelling Reddit post that described how he became addicted to buying in-game perks, which he later described as ‘digital garbage’.
“I am currently $15,800 in debt. My wife no longer trusts me. My kids, who ask me why I am playing Final Fantasy all the time, will never understand how I selfishly spent money I should have been using for their activities.”
The introduction of these elements to video games was gradual, but the backlash against them has been building in force for the past six months. There was a furious fan response to the imposition of various loot boxes on the new Star Wars Battlefront game last year, which eventually led to their complete removal from the game.
Concerns have been taken up by politicians across the globe. A bill introduced in Minnesota last month would prohibit the sale of video games with loot boxes to under-18s and require a severe warning: “This game contains a gambling-like mechanism that may promote the development of a gaming disorder that increases the risk of harmful mental or physical health effects, and may expose the user to significant financial risk.”
Politicians in multiple other US states have targeted loot boxes, which Hawaiian congressman Chris Lee said “are specifically designed to exploit and manipulate the addictive nature of human psychology”. He has introduced a bill to Congress that would force publishers to publicly disclose the odds of loot boxes, as they must in China.
“I have seen developers change the odds of winning based on buying habits, and lowering the user’s chance of winning if they know they will buy more,” says Ryan Morison, a lawyer specialising in digital entertainment.
“Can you imagine a poker machine or slot machine that would lower the odds of winning if they knew you would spend another hour there playing? That would be illegal anywhere, yet we allow similar with loot boxes and we allow them to be targeted at children. That needs to change immediately.”
In the Netherlands, meanwhile, lawmakers have said that at least four popular games contravene its gambling laws because items gleaned from loot box can be assigned value when they are traded in marketplaces.
Loot boxes were outlawed Belgium last month following a lengthy investigation due to concerns they encourage children to gamble. “Paying loot boxes are not an innocent part of video games that present themselves as games of skill,” said Peter Naessens, director of the Belgian Gaming Commission. “Players are tempted and misled, and none of the protective measures for gambling are applied.”
These developments have led to growing calls in the UK, from MPs, campaigners and charities to regulate loot boxes. A recent poll found that 60% of the public believe loot boxes should be regulated as gambling. A recent petition calling on the government to “Adapt gambling laws to include gambling in video games which targets children” attracted more than 16,000 signatures.
“It very easy for young people to get drawn into a virtual world while spending excessive amounts of real money,” says Carolyn Harris, a Labour MP who has campaigned for gambling reform. “Loot boxes are a way for video game companies to maximise their profit on something that has no place in the real world. I would urge and welcome regulation.”
Around 25,000 11- to 16-year-olds are problem gamblers, according to the Gambling Commission, while another 36,000 are at risk of developing a problem.
“Young people are losing significant sums of money and, in my view, more needs to be done to protect them,” says Daniel Zeichner, a Labour MP who previously called on the government to extend the UK’s existing gambling regulations to loot boxes.
“I’ve been trying for months to get a debate in parliament on this, unsuccessfully sadly, but I will keep trying because I think there is an issue here. Other jurisdictions are moving on it and my worry is that in the end it will do the video games industry harm if we’re not careful.”
A Gambling Commission spokesperson said: “Our view on loot boxes is set out in our position paper [which] explains how the playing of a game of chance for a prize of money/money’s worth is gambling under UK law.
“So, where in-game items that are derived from loot boxes can be readily exchanged for cash, the loot boxes themselves are likely to fall within the definition of gambling.
“The greater the availability, scale and sophistication of secondary markets where the in-game items can be sold, the stronger the case becomes that the in-game items are articles of money or money’s worth.”
A spokesperson from the Campaign for Fairer Gambling said: “If the current regulatory framework is unable to consider loot boxes as a form of gambling, as it is in other jurisdictions, then it is clearly unable to keep pace with a rapidly evolving gambling market and is not fit for purpose.”