A key aspect of the modern video game business model has come under fire recently –– and it has nothing to do with violent themes.
Loot boxes –– virtual in-game grab bags containing randomized virtual items that can enhance game play, such as special characters or higher-power weapons –– have become targets of a number of lawmakers, consumer groups and researchers, who argue that these features encourage gambling behaviors, especially for children.
Loot boxes are a type of microtransaction, a small purchase with real money within a video game. Microtransactions have grown in popularity, especially in mobile gaming, as the modern video game business model has shifted.
Most video game publishers today don’t depend on sales of singular physical copies of games. Instead, they operate some form of a continuous “games-as-a-service” model, which enables developers to add new features and downloads after a game has been released. This keeps gamers engaged with a title longer and also enables game publishers to add additional monetization options.
Loot boxes are one of the monetization methods. They are typically purchased with either actual money or in-game currency, which is usually purchased with real money as well.
Unlike most microtransactions, though, the gamer purchases these boxes without knowing their value, similar to a person buying a lottery ticket. They’re also designed to stimulate an emotional response in the player through flashy graphics and sound effects, a tactic that critics have correlated to brightly blinking slot machines.
“Microtransactions in general are kind of clinical. When you buy a cosmetic skin or you buy an expansion pack, the game itself doesn’t celebrate that. It just considers that a transaction,” Jeff Haynes, senior editor of video games and websites at Common Sense Media, told Karma. “Loot boxes tend to have more of a visual appeal that captures the imagination of players when they purchase one.”
It’s not just speculation: researchers have found a correlation between loot boxes and gambling problems. A study from David Zendle, a media effects specialist and lecturer at York St. John University, found “empirical evidence of a relationship between loot box use and problem gambling.” Alarmingly, the study also concluded that the “neither small, nor trivial” relationship was stronger than observed correlations between problematic gambling and alcohol abuse, drug use and depression.
Policymakers are paying attention too. Senator Josh Hawley, a Republican from Missouri, proposed a bill in May that would prohibit sales of loot boxes, which “prey on user addiction,” in games targeted at minors under the age of 18.
Last week, the Federal Trade Commission held a dedicated workshop examining consumer protection issues pertaining to loot boxes. The event featured presentations from gaming industry trade organizations, consumer advocacy groups, psychologists, media academics and policymakers, including Haynes and Zendle.
Despite –– or perhaps because of –– this legislative attention, the industry appears to be taking the first steps toward self-regulation.
On the same day as the FTC workshop, the industry’s major trade group, the Entertainment Software Association, rolled out a commitment to policies from Microsoft, Sony and Nintendo requiring games compatible with their consoles –– including Microsoft’s Xbox, Sony’s PlayStation and Nintendo’s Switch –– to disclose the probability of a player receiving specific virtual items in paid loot boxes. These probabilities are known as “drop rates.”
Twelve publishers, including top sellers Activision Blizzard, Electronic Arts and Take-Two Interactive, also committed to disclose drop rates in all of their games by 2020.
“We commend our members for their continued efforts to listen to their customers and provide consumers with information to make more informed choices for their gameplay,” the ESA wrote in their commitment. “We will continue to innovate and work together so that every member of our community can enjoy video games as a fun and enriching experience.”
Later in the week, Rocket League, made by Epic Games-owned Psyonix, pledged to remove all loot boxes by the end of this year. Epic Games’ most popular title, Fortnite, announced in January that one of its loot box equivalents, called Save the World Vbucks Llamas, would begin to disclose exact contents prior to purchase.
The game-makers certainly see self-policing the economically booming sector as preferable to lawmakers stepping in, if only because legislators aren’t up to speed on the industry.
“In some cases, there is a need on the part of legislators to understand aspects of what they’re trying to legislate, and that can be a little bit tricky, because tech isn’t something some legislators are comfortable wandering into,” Haynes said.
Gamers successfully pushed back on past attempts on past attempts to generate money from users that crossed the line into predatory. Electronic Arts’ Star Wars: Battlefront II, for example, presented players with additional features needed to advance in the game that could be earned through unrealistic amounts of continuous gameplay –– or immediately unlocked for $5 to $89 (on top of the game’s $60 to $80 price tag). Widespread industry outcry eventually prompted EA to remove the controversial features from the game.
“I think that the game industry knows that there are certain things that it has done that it can attempt to do better,” Haynes said. “There’s already a certain amount of backlash, and there’s some degree of reflection going on about how much these elements are needed within a game.”