Loot boxes, a controversial feature in the gaming industry, have sparked a global debate. Accused of fostering exploitative practices, they have prompted several nations to take action, either by restricting their use or outright banning them. The gravity of the issue is further underscored by numerous studies that have linked these tactics to gambling addiction, raising serious concerns about the potential harm of loot boxes.
In this article, we aim to shed light on the loot box phenomenon, a controversial gaming practice that demands our attention. It is imperative that we examine this issue closely, considering its potential implications and the urgent need for responsible gaming practices.
Loot Boxes: What Are They?
You may be curious if you are unfamiliar with the discourse: What precisely is a loot box? In essence, a loot box is a digital enigma containing unknown virtual items. These items may be acquired as a prize via gaming or bought with real money.
Loot boxes differ from ordinary in-game purchases in that they withhold information about their contents until payment is made. Critics highlight the structural resemblance to gambling, in which players make payments to access a loot box with the expectation of obtaining a rare or highly valued feature.
The Loot Box Controversy
Loot boxes have faced criticism mostly because of their exploitative tactics, which have been associated with the development of gambling addiction. When searching for “loot box gambling” on Google Scholar, several scholarly studies are found that establish a correlation between this feature and indicators of gambling addiction.
A recent analysis by the universities of Plymouth and Wolverhampton, aimed at influencing the UK’s Gambling Act review, said that loot boxes have strong structural and psychological similarities to gambling.
On the other side of the debate, representatives of the video game industry argue that their games are designed to entertain and engage players, dismissing any claims of impropriety. This viewpoint is also shared by some users, as evidenced by online articles offering tips on how to bypass game restrictions.
Unlike the best mobile casino sites, however, loot boxes aren’t age-restricted, and ultimately, the demographic at which they’re aimed is predominantly focused on a younger generation of gamers.
The Psychological Aspect of Loot Boxes
The act of opening a loot box and the potential to get a rare or costly object stimulates the release of dopamine, which is a neurotransmitter in the brain associated with rewards. This procedure may be habit-forming, as the brain craves further gratification.
Loot boxes use the psychological principle of operant conditioning. Players get rewards at irregular intervals, following a variable-ratio schedule. This schedule is known to result in a high frequency of reaction and a propensity for the behaviour of purchasing or earning boxes to be difficult to extinguish.
Players who dedicate their time and financial resources to games may be more inclined to buy loot boxes to improve their gaming experience. This behaviour is driven by the sunk cost fallacy, which is the belief that one should continue investing in something even though one has already invested in it.
Legislation vs. Loot Boxes
On January 18th, 2023, the European Parliament approved measures to tackle several concerns within the gaming sector. The vote pertained to a study presented by MEP Adriana Maldonado López on behalf of the European Commission. The report included a recommendation for the implementation of a video game age rating system called Pan European Game Information (PEGI) and the establishment of standardised regulations throughout the European Union.
In addition, the UK has established a committee of lawmakers from the Department of Culture, Media, and Sport (DCMS) to tackle a reform of the Gambling Act that aims to regulate online gambling. The publication of the study has been subject to many delays. However, it is expected to include regulatory recommendations for the UK government whenever it is published. However, the Federal Trade Commission (FTC) in the United States has mostly evaded addressing the problem.
Enacting legislation for video games is inherently challenging. Regulatory organisations are reactive and demonstrate a much slower pace than the sector. Consequently, even if regulations against loot boxes are put into place and rigorously enforced, the gaming business will have already transitioned to other methods of generating revenue that are as effortless.
Should Loot Boxes Be Banned?
Multiple nations have implemented prohibitions or limitations on loot boxes, and it was anticipated that the Government would use its ongoing review of the Gambling Act to enact a comparable measure. The Act was enacted in 2005, two years before the introduction of the iPhone. The review was initiated due to the Act’s inadequacy in adapting to the digital era.
However, regarding loot boxes in the UK, it has been determined that industry self-regulation would be the chosen approach. (This method, which has been applied to social media, is largely seen to have been unsuccessful, leading the Government to try to catch up with its Online Safety Bill.)
There is little motivation for the gaming industry to control loot boxes voluntarily. Their value in the UK amounts to £700 million.
In its statement, the DCMS acknowledged that loot boxes pose a significant risk to children since they often have less developed impulse control, are more susceptible to social pressure, and have a limited grasp of purchase choices and probability.
While a straight-up ban on loot boxes seems harsh, there should at least be a dedicated regulator in place.
The gambling law in the UK was designed to cater to the needs and requirements of the analogue era. In the current era of digitalisation, the inability to address the consequences of the relationship between loot boxes and problem gambling indicates that the law is likely to lag behind as new online platforms and methods of online commerce emerge.
Perhaps the Gambling Commission finds the situation very complex. The DCMS briefing document alludes to this. Games are complex and always evolving, necessitating examination by a knowledgeable entity. While excluding children from loot boxes may seem reasonable, it is crucial to consider the impact on children’s overall gaming experience if loot boxes play a significant role in the game.
Self-regulation is an inadequate reaction to the compelling evidence of the connections between loot boxes and gambling addiction. The recent statement by the DCMS raises several unresolved questions about the specific timeframe, implementation, and nature of adherence. Suppose the current gambling law proves inadequate in addressing the expansive and intricate games business, particularly as it evolves into the metaverse. In that case, it is imperative to establish a dedicated regulatory body for the gaming sector.
