They’re hated by government regulators, loved by video game developers, and loved and hated by gamers. So what is to be done about “loot boxes,” those ubiquitous, mysterious, computerized packages that gamers pay real money to buy and that some say are tantamount to gambling?
Loot boxes have come to the fore only recently, as the gaming industry has shifted gradually from a one-time-purchase, $60-per-game model to a freeware-coupled-with-in-app-purchases approach, most notoriously (or gloriously, depending on your perspective) exhibited by “Fortnite,” the gaming phenomenon that entered the scene in 2017.
Following the lead of popular (and highly addictive) mobile games such as “Angry Birds” and “Candy Crush,” console game developers have recognized the benefits of enabling gamers to download games for free and encouraging them to enhance gameplay through “microtransactions” — gamemaker-speak for in-game purchases.
In many such games, players earn coins or the equivalent by completing levels, defeating enemies, or achieving other goals. But they can also purchase such coins (or assets of similar in-game value, such as experience points) with real, hard currency. Gaming companies refer to loot boxes as “surprise mechanics,” as Electronic Arts’ (EA) vice president for legal and government affairs told a United Kingdom panel last month, noting that their customers “enjoy surprises,” something that “has been part of toys for years.”
Yet while developer profits have soared as in-app purchases have spiked, they’ve also provoked a backlash within the gamer community and among government regulators, especially those concerned with their effect on children.
The furor perhaps reached its peak in 2017, when EA introduced a beta version of “Star Wars Battlefront II,” where players could purchase “loot crates” to shortcut the time it would otherwise take to accumulate sufficient experience to conquer new levels.
Players rebelled en masse, and when an EA spokesman attempted to quell the outrage on Reddit, his comment became the most downvoted in the site’s history. Ultimately, a red-faced EA acknowledged “the concerns about potentially giving players unfair advantages. And we’ve heard that this is overshadowing an otherwise great game” and deactivated all in-game purchases.
Lawmakers around the world seized on the development and have begun pushing back against these practices.
Legislation introduced last year in the Hawaii legislature would have barred minors from purchasing any games offering loot boxes and required game developers to disclose that such games contain loot boxes, along with the relevant prevalence of the various rewards they contain.
As Chris Lee, one of the measure’s sponsors and a confessed lifelong gamer, told a local newspaper, “I’ve watched firsthand the evolution of the industry from one that seeks to create new things to one that’s begun to exploit people, especially children, to maximize profit.” Putting an even finer point on the debate, Lee labeled “Battlefront II” a “Star Wars–themed casino designed to lure kids into spending money,” noting, surely tongue-in-cheek, that “it’s a trap.”
And last year, Belgium’s Gaming Commission declared loot boxes in violation of the country’s gambling laws, imposing a fine of €800,000 and as much as five years in prison for the developers of games using them, with fines and sentences doubled when minors are involved.
The declaration followed the commission’s investigation of four games — “FIFA 18,” “Overwatch,” “Counter-Strike: Global Offensive,” and “Star Wars Battlefront II” — and concluded with the Belgian minister of justice finding their use of loot boxes “dangerous for mental health.”
In response, a spokesman for EA Sports stated that “we strongly believe that our games are developed and implemented ethically and lawfully around the world, and take these responsibilities very seriously.”
Other countries, including the United Kingdom and New Zealand, have examined the loot box issue but ultimately concluded they did not constitute gambling because, in the words of one New Zealand bureaucrat, gamers “do not purchase loot boxes seeking to win money or something that can be converted into money.”
So who’s right? Game developers? Players? Legislators? In our next installment, we’ll explore more recent US federal legislation and attempt to formulate a market-friendly response that balances the various competing concerns.