Many people will never have heard of ‘loot boxes’, but these video game microtransactions can have a big impact on society. They made headlines recently after the House of Lords Gambling Committee determined that they should be treated as gambling and regulated as such. But just how big a deal are loot boxes, and is this kind of action really necessary?

What are loot boxes?

Loot boxes are a form of microtransaction. They are an in-game bundle, the contents of which are not known to the buyer at the time of purchase. Perhaps the most famous example can be found in EA’s FIFA franchise, where the ‘Ultimate Team’ game mode allows players to open ‘packs’ and acquire players to build their team. The two most expensive packs offer just a 2.3% or 2.4% chance of acquiring a player rated 90 (out of 100) or above, with all other packs offering no chance of acquiring these players. Importantly, this information is not available to players in-game, nor do players have the ability to simply select the player they want for a given price. 

The randomised nature of loot boxes, combined with the use of real-world currency means that they may be considered as a form of gambling. In turn, this would mean that the family-friendly FIFA football franchise would come with a new age rating of 18+, forcing EA to choose between removing loot boxes or risk losing much of its player base. EA has defended its use of loot boxes, describing them as a ‘surprise mechanic’, but other countries have already taken action to regulate this form of microtransaction. 

Large console games are not the only culprits here. Many of us have games on our mobile phones, and these smaller games make lots of money from microtransactions as well. Many of these games allow a player a limited number of turns and will offer extra chances to play in exchange for money. To be fair, many of these smaller games, and indeed one of the largest in the world, Fortnite, are free to play, but the potential revenue streams from microtransactions are huge. These are different to loot boxes because it is clear what someone is getting for their money, but microtransactions in general could be considered “immersive and addictive technologies.”

Difficult questions

This issue raises a lot of questions on the desirability of new regulation. Of course, people are free to spend their hard-earned money how they wish, but what about children? As someone who works with children and young people, this is a concern for me. Not only do I want to see young people spend their money wisely, but I am also concerned that it may lead to them gambling in other ways as they get older. In reality, the ‘surprise mechanic’ is no different to other forms of gambling.

My concern is that parents are not aware of the prominence of microtransactions in games, and indeed the nature of loot boxes. Children do not understand the nature and value of money in the same way adults do, and of course cool-looking goodies can be very attractive. This means that parents have a responsibility to research which microtransactions are appearing in the games they buy for their children and how they can limit the spend on those using the systems already available on platforms like PlayStation and Xbox. 

Legislative solutions?

A House of Lords committee has suggested that loot boxes should be treated as gambling. This would be a major change to legislation that has not been updated since 1985. Meanwhile, The Department for Digital, Culture, Media and Sport has recently announced that it will launch a call for evidence into the impact of loot boxes and “gambling-like behaviour” later this year. It cites an increase in gaming during lockdown as an important motivating factor behind considering legislation around gaming.

In Northern Ireland, the Department for Communities has responsibility over gambling. The Department has recognised the need for an update to legislation and does indeed mention gaming as an area that will need attention. A consultation was completed in February 2020 but the findings have not yet been made public, but given the rise of gaming during lockdown it will become more important to carefully consider the adequacy of existing laws. 

Like any situation where there may be differing regulations between regions it may cause problems for retailers, particularly online retailers. Should the Northern Ireland Executive move to classify loot boxes as gambling, but the UK Government decides against it for England and Wales, it would mean that certain games will receive different age ratings based on where they are being sold within the UK. It may simply have the effect of hampering local gaming retailers as people may be able to buy versions online without any age restrictions. 

This is no doubt an important issue to be tackled. There may not be consensus on whether or not loot boxes should be classified and gambling and regulated as such. For adults, any change would likely not have much of an effect, but legislation must surely be drafted in order to protect children. If we as a society believe that children should not be allowed to gamble, then new legislation needs to keep up with technological developments.