Loot Boxes in Video Games: Unveiling the Controversial Gambling Mechanism

Introduction

For the past five years, a new issue has come up in the video game industry. Video game developers and publishers have started to add hardcore gambling mechanics into their games, and specific in-game items are locked behind a random paywall. By adding hardcore gambling mechanics to video games, game developers and publishers are taking advantage of both children and adults, as it has been proven that these techniques are habit-forming while creating a lot more money for the industry.

Body

Understanding Loot Boxes and Gambling Mechanics

The most common form of gambling in video games is ¨lootboxes.¨ Lootboxes are buyable items that give out random rewards to the person buying them. Inside the loot boxes are random in-game rewards that can vary in rarity, varying from common items to more rare items that are harder to get. The in-game items obtained from loot boxes could be just cosmetic customizations for the player’s character, or they could directly affect a character’s stats, giving players who buy loot boxes an advantage over players who did not buy any loot boxes. Loot boxes usually never show the chances of getting a rare item to the player, making them feel like the chances of getting something they want are much higher than they really are. Not knowing exactly what a loot box has inside of it makes it clear that this is a form of gambling, and players can get into the habit of buying them more and more in hopes of getting better in-game items.

The Prevalence of Loot Boxes

These loot boxes have been made popular by mobile games like Clash of Clans in 2012 (Burdick) and other free-to-play games in order for developers to monetize their games. Just a few years later, major game developers and publishers started adding loot boxes into their fully priced, sixty-dollar games to maximize profits from the millions of active players. Because of how much loot boxes make, developers have been adding more and more ways to make the player feel like they need to buy them in order to play all the game has to offer, often locking the most interesting items behind loot boxes.

Players can not only lose money from buying loot boxes, but they can also make money from buying loot boxes. Some popular games that have loot boxes have marketplaces directly in the game where players can sell the in-game items they gain from loot boxes for real money, or they can trade items with each other. Popular game Counter-Strike: Global Offensive has one of these marketplaces directly in the game. Other games like MADDEN and FIFA have the extremely popular game mode Ultimate Team where the player collects players from packs and an auction and sell them for the in-game currency, coins. Coins are not available to buy directly. In the game, websites like Mutstore.com and fifautstore.com exist where players can buy and sell their coins for real money.

Effects on Players: Children and Adults

Lootboxes started to be a serious problem when massively popular games like Overwatch, Rainbow Six: Siege, FIFA, and MADDEN started including them in their games. There are over ¨35 million registered players across all platforms¨ (Maguid) for just Rainbow Six: Siege. Overwatch is one of, if not the most popular multiplayer games of all time, with forty-million players as of May fifteenth, 2018, gaining five-million players in just over half a year.

Overwatch and Rainbow Six: Siege both receive major game updates every few months, bringing in more and more players every month. On the other hand, the popular MADDEN and FIFA series has released new games every year, updating game mechanics and resetting the popular Ultimate Team game mode. Not only do fans of the series need to buy another sixty-dollar game every year to keep up to date, but they also need to buy loot boxes in order to get their team back to how it was in the last game.

Influence on Gameplay and Progression

Ever since EA, the game publisher for MADDEN and FIFA, realized how much money they could make from the Ultimate Team game mode, and with it being their “fastest growing mode” (EA), it has become their focus to find new ways to monetize it every year. The game mode was first added in Madden NFL 10 back in 2009. This game mode also had the same model as the games do now, but the need to buy coins was far less obvious. Ever since the mode was a huge success in 2009, EA subtly kept on making the player packs more and more important for leveling up the players’ teams. They did this by increasing the amount of coins it takes to buy player packs going from about 500 coins for a pack (GameSpot) up to 7,500, and did not change the rate you get coins. And now, in the series’ newest game Madden NFL 19, every item you could think of is locked behind the player packs and other microtransactions.

Everything from players, uniforms, playbooks, and even stadiums costs real money, or you could use the coins you have. However, now these coins can be obtained by selling the items you get from loot boxes in the auction tab. These coins could then be used to buy packs without spending any of the player’s own money. That sounds good until the player finds out that there is a limit on how many packs can be bought with coins before they need to use the money to open more. It is obvious that the packs that cost over 50,000 coins most of the time are buyable with coins to get the player hooked and make them buy more of them. With practices like this, Ultimate Team just for Madden NFL 19 is now worth over 800 million dollars (Handrahan).

Controversies and Legal Interventions

Most video games that include loot boxes in them do not tell the player exactly what they will get if they buy one. “Whenever you open [a loot box], you may get something awesome (or you may get trash). This randomness taps into some of the very fundamental ways our brains work when trying to predict whether or not a good thing would happen” (Hood). Not knowing exactly what you are purchasing when you buy a loot box is a form of gambling, and game developers make sure to hide the awful chances a player has to get an item they want.

Games like Overwatch, Rainbow Six: Siege, Destiny 2, Counter Strike Global Offensive, and Star Wars Battlefront II do not tell the player the chances of getting certain rarities of items. However, in FIFA 19, the developers actually told players the chances they had, and it was not good. The screen that they showed players stated there was a “less than 1%” (Yin-Poole) chance at getting a limited-time player that the Ones to Watch packs were advertised for having. “The wording of ‘less than one percent’ probability is clearly deliberate – it may be 0.01 percent, for all players know”(Yin-Poole). After finding out how little the chances of getting a rare card really are, players finally started to boycott the packs.

Balancing Entertainment and Ethical Concerns

Not all FIFA players were lucky enough to stop themselves from spending their money. In an interview with Eurogamer, one FIFA player tells a story about how much money he spent in just two years on the games FIFA 17 and FIFA 18. After requesting EA to send the data, they collected from him, “he was ‘gobsmacked’ to discover he’d spent over $10,000 in just two years” (Yin-Poole). Even though the info he was sent had stats for almost everything he had done in the game, it did not tell him whom he got from all of the player packs, and it did not tell what packs he had bought with the points he bought. He was lucky enough to have a healthy, disposable income, but not everybody who plays these games have money to spend on loot boxes and player packs, but they do anyways.

A 19-year-old on Reddit went into detail about his story and how he had become addicted to gambling by playing video games for a few years. He “shared with Kotaku his bank statements and receipts proving that he had indeed spent $13500.25 in games such as Counter-Strike: Global Offensive” (Gach) in just three years. He is only one of many players who are constantly buying loot boxes and microtransactions in video games, and he probably still would be buying them if he did not go talk to a therapist to help stop his spending habits. He went on to warn others and begged them not to make the same mistakes he did, saying that ‘It’s not just a one-time purchase. It never is'(Gach)

Monetization and Industry Profit

One of the main reasons why people spend so much money at a time in these video games is limited-time items. Every few months, games like Overwatch, Rainbow Six: Siege, FIFA, MADDEN, and Counter-Strike launch updates for the games that often only last for a few weeks or a month, with unique items available only during the events. These events also usually have a timer somewhere on the screen, giving the player a countdown of when the event will end. The timer often occurs when MADDEN or FIFA has limited edition player packs for sale. Having limited-timed items with a timer makes the players feel like they need to buy the items from loot boxes before the time runs out, and they miss the items forever.

If a player spends money on loot boxes and is lucky enough to get a popular item from it, then the player can sell it for a ridiculous amount of money in some cases. An example of this happening occurred in late January this year when a player got a Counter Strike Global Offensive skin with an autograph of a pro player on it. Days before the skin was released to loot boxes in the game, a massive tournament went on for the game, having hundreds of thousands of live viewers watching. The MVP of the tournament, ‘Skadoodle’ had his autograph put on a special gun skin for the game’s most popular gun; the AWP sniper rifle.

The autograph was put on one of the game’s rarest skins already. “Not only is a Dragon Lore skin rare on its own, but there are also the additional factors of visual quality, the Souvenir label, and the autograph”(Rose). One player lucky enough to obtain the skin from a $40 loot box was able to sell it to another player for $61,052.63 (Rose). This shows just how much money people are willing to spend on in-game items for their favorite game.

The biggest contributor to the loot box controversy is EA’s Star Wars Battlefront II. Before the game launched on November 17th, 2017, EA promised customers that the game would be much better than its mediocre predecessor and that it would be supported for years to come with free updates for everyone. Both Star Wars fans and fans of gaming, in general, were very excited for the game to come out and couldn’t wait for it to release. Come to find out, almost everything in the game was locked behind loot boxes. “Battlefront II’s progression system is tied to equippable items called Star Cards. These cards grant special bonuses, such as increased health and faster ability cooldowns”(Alexandra).

The only way a player can unlock new Star Cards is through loot boxes. The player could either play hundreds of games to open a few loot boxes, or they could pay money and save themselves several hours of grinding. The worst thing about the game at launch was that classic Star Wars characters like Darth Vader, and Luke Skywalker were locked behind a paywall as well. The characters cost 60,000 credits to unlock, or the player could just hope to get them and their upgrades from loot boxes.

A poster on Reddit did the math, and he found out that the average amount of credits a player could get from an 11-minute match was only 275. To buy a loot box that cost 4,000 credits, it took 159 minutes of gameplay. He also found out that “it will take you 40 hours of gameplay time to earn the right to unlock one hero or villain”(Potato). That’s right; a player will need to play for forty hours without spending any credits on loot boxes just to unlock one of the main characters the game was advertising.

Games like Madden NFL 19, FIFA 19, and NBA 2K19 that have these loot boxes also have an ESRB (Entertainment Software Rating Board) of E for everyone. This means that the ESRB allows games with predatory loot box mechanics in them to be played by anybody who wants to, with no warnings at all. So now, loot boxes are being introduced to young children who get these games from their parents who have no idea about loot boxes. Games with mechanics like this that are rated E lead children to steal credit cards from their families and spend thousands and thousands of dollars on a game without even knowing it. And since there is no limit on how much a player can spend on loot boxes, the children can keep on buying them until they get the item they want.

By adding loot boxes and other microtransactions into their games, publishers make hundreds of millions of games just from one game alone. As stated earlier, “EA’s Ultimate Team business new contributes $800 million in net revenue annually, up more than 20% year-on-year” (Handrahan). Other games like Counter-Strike: Global Offensive and Rainbow Six: Siege do not disclose how much money they make from their microtransactions and loot boxes, but it is obvious that they make several million dollars a year because they both organized their own E-Sports leagues with millions of dollars in prize money. Publishers of games like EA and Activision also own several major, sixty-dollar games with millions of players and have forced game developers to add loot boxes into them to maximize profits.

Sellable in-game items have also led to the creation of some shady businesses from third parties. There are websites like mutstore.com where players can directly buy and sell their coins made from playing Madden Ultimate Team for hundreds of dollars, but then there are some illegal websites that were mass-advertised to millions of children, urging them to spend their parent’s money for Counter Strike Global Offensive weapon skins.

Two popular YouTubers, with millions of subscribers each, owned a gambling site and advertised it to their viewers in multiple videos with millions of views each. They told the young viewers that they “found a new website” (Martin) and did not disclose the fact that they were actually the owners of the site and could rig the odds to be in their favor to make the website look better by having them constantly win. Children on youtube make their own videos, go on the website, and spend their birthday money and some of their parent’s money, just to lose all of it and not get anything they want.

The Future of Loot Boxes

Earlier this year, two Australian doctors, Dr. David Zendle and Dr. Paul Cairns, tested thousands of video game players and monitored their spending habits in video games.“The more severe a gamer’s problem gambling was, the more likely they were to spend large amounts of money on loot boxes. These results strongly support claims that loot boxes are psychologically akin to gambling” (Zendle). The study also found out that the people who spent the most money on loot boxes in video games spent the most money on actual gambling at casinos.

A common saying used by the people who defend loot boxes in video games is that they have no effect on the player’s experience and give them no advantage over other players, being “just cosmetic” (Statt). This is incorrect because, in most games that include loot boxes in them, the items you obtain can give you new abilities and increase your in-game stats. Lootboxes directly upgrade the player in games like Star Wars Battlefront II and the NBA 2K, MADDEN, and FIFA series. Lootboxes are the only way for a player to upgrade their abilities or teams in these games, and there are no other options; you either buy the loot boxes or you do not upgrade yourself. Heather Alexandra put it best by saying:
“Let’s say someone spends $99.99 for a ton of crystals and opens all of their crates. By the end of that process, they will likely have acquired a few rare cards that grant noticeable bonuses and give them a competitive edge at launch. They will also increase their card levels for their classes, removing one barrier for crafting upgrades. Throughout that process, they will also get countless crafting parts to stockpile. The only thing that prevents them from crafting the best cards is their player rank. They will spend a handful of hours in multiplayer matches, already equipped with better cards than other players, and quickly increase their rank. If they’ve planned ahead and have enough crafting parts, they will immediately be able to craft the best cards in the game” (Alexandra)

Conclusion

People also say that the items are worth nothing outside of the game. This is already proven wrong because players can sell their accounts to each other and directly trade or sell in-game items either directly through the game or on a third-party site. Just one skin can cost over $60,000, and if an account has multiple rare skins, then they can sell their skins to a rich player for hundreds of thousands of dollars.

Thankfully, action is being taken against loot boxes around the world. In the United States, Minnesota is now forcing games that have loot boxes in them to have a warning sign on the cover. The word ‘warning’ must be stated clearly in uppercase letters that measure at least one-half inch in size, or, in the case of a warning for an electronic purchase, in a 16-point font, centered over the body copy of the actual warning¨(HF 4460). And no game, including loot boxes, can be sold to anybody under the age of 18 years old. Other countries around the world have also taken action against loot boxes. As of November 2018,

References

1. “The Business of Fun: How Video Games Make Money” by Mark J.P. Wolf
2. “Gamers’ Pact: The Games That Make Video Games – How the Unscrupulous and Feckless are Really Behind the World’s Best Loved Art Form” by Paul Presley
3. “Beyond the Box: TV and the Internet” by Sharon Marie Ross
4. “Seductive Interaction Design: Creating Playful, Fun, and Effective User Experiences” by Stephen Anderson