In the UK, a recent study has found that 70% of video games now contain loot boxes, including games targeted at children. The UK Children’s Commissioner already said that loot boxes are harmful to children because of the monetary, as well as the random element. In the follow-up, the UK Gambling Commission launched a call for evidence about how loot boxes impact problem gambling.
However, not only the UK looks at the problem of loot boxes. Spain announced a consultation in February 2021 and is now preparing a ban for minors. Around the same time, Austria mentioned loot boxes in their intention to regulate online gambling by explicitly stressing that loot boxes would prepare the ground for children to start real money gambling. France and Germany are also investigating the topic. Belgium classified it ‘a gambling product’ and prohibited it, while Poland did not. Holland is on the way towards a total ban of loot boxes. Overall consumer organizations of 18 countries already back the regulation of loot boxes in one way or the other. But why do many countries still investigate? Hasn’t it become clear yet that it is a gambling product since it involves money and the random element?
GENERATION Z AND THE FUTURE OF VIDEO GAMES
One thing is clear, however: video games are THE GAME of Generation Z. At a global level, already nearly 2.5 billion casual gamers are counted. Millennials find Esports (as some video game competitions are called) already as interesting as traditional sports. For those generations that are growing up right now, video games are even more important. That is why professional players are often the new role models for many young people. Video games are here to stay and evolve.
When it comes to the major characteristics of loot boxes, different points certainly have to be looked at in order to get closer to an answer: age, immediate involvement of money, design, possibility to trade items or not, etc. Not every loot box contains the same money and ‘winning’ element. Some loot boxes can be opened without money, some cannot. Others, like the FIFA game, a virtual football simulation, can involve even high amounts of money because one has to purchase a new version of the game every year. In addition, one has to take into account the costs of purchasing footballer cards in order to be competitive. So, it might make sense to categorize loot boxes.
LOOT BOXES AND PROBLEM GAMBLING
In regard to the crucial question whether loot boxes might trigger a problematic gambling behavior in the future, one has to consider more than just money and random elements. An essential part of the very nature of video games (and not only loot boxes) is the wish -or even the urge- to continue the game. How video games are designed, programmed and animated, all those elements shall draw the player into the video game world. The loot box is the add-on. There is a motivation created to purchase items and to feel the joy when one gets rewarded. The study of Zendle and Cairns demonstrates that in a very elaborate manner.
WHAT TO CONSIDER WHEN REGULATING LOOT BOXES
To sum up, there are a couple of elements which are a key when it comes to defining and regulating loot boxes: age, design and programming, money aspect, type of items and rewards, advertising, etc.
As far as the age factor is concerned, it is of course important to clearly indicate for which minimum age a loot box is designed. One would have to further distinguish between loot boxes that can be opened with money and those that can be opened without money. There is also important to assess how items can be purchased and to which extent they sustain advantages, as well as if the items are purely cosmetic or if they affect player performance.
In addition, it needs to be defined under which gambling category loot boxes would list or whether a new category would have to be set up, and whether loot boxes should really be regulated within a gambling framework or via another specific area.
LOOT BOXES AS A PILOT FOR A MORE HARMONIZED REGULATORY APPROACH
As we have seen right at the beginning of the article, like with online gambling, jurisdiction approaches the topic very differently, from defining loot boxes as gambling or not gambling, from regulating to prohibiting them.
Do children behave differently from country to country or would it make sense to create a common standard? Could loot boxes be the playing field for an aligned approach which would immediately solve many topics, such as cross-border advertising, responsible gambling, fraud, cross-border use of loot boxes when travelling, etc.? With a clear and universal definition of which characteristics a to-be-regulated loot box would need to have, a common basis would be created and would facilitate all further moves.
As it seems with the report about eighteen national consumer associations backing a regulatory approach, today, countries are more active in cooperating than still ten or twenty years ago, when the first online gambling laws were filed and adopted. Whether it is in the area of gaming, whether it is in tech, food or education, it is understood that the world is so intertwined that an individual way forward rarely solves an issue but rather raises further hurdles. The more one works on joint solutions, the higher the overall success will be. Perhaps, loot boxes still become famous for having brought many regulators to one table.