loot boxes should not be banned, and video games are not evil

Loot boxes have recently become a hot topic of the gaming world.  In 2018, Belgium ruled that loot boxes were in violation of their gambling laws and banned them, citing concerns with a young audience¹.

This made waves across big game companies, who were threatened with lawsuits and fines if they didn’t take action².  EA stopped selling FIFA Points, their in-game currency that can be used to purchase loot boxes³.  Blizzard removed paid loot boxes from Overwatch and Heroes of the Storm⁴.  Square Enix pulled titles including Kingdom Hearts and Final Fantasy from the region⁵.  And the list goes on.

I could write at length about all the investigation that is going on around the world with loot boxes.  But what caught my eye recently was the proposed legislation by US Senator Josh Hawley, on May 8⁶.

Senator Hawley to introduce legislation banning manipulative video game features aimed at children

The full bill is now available online⁷, and it has received bipartisan support in the Senate⁸.  So things are moving quickly, it seems, without a good understanding of the problem.

I don’t know about you, but this sounds to me like an attempt to jump on the bandwagon and capitalize on all the hype currently surrounding loot boxes.  Banning loot boxes is not a simple, quick fix to solve possible gambling in games.  There’s a lot more to this issue.

I’ll discuss each of these points, and then come back to Sen. Hawley’s legislation.

1. Are loot boxes gambling?

A study at the University of British Columbia⁹ states that “loot box engagement is correlated with gambling beliefs and problematic gambling behaviour in adult gamers¹⁰“.  This is one of very few studies available on the topic, so I do think that more studies need to be done to study behaviour with loot boxes, in particular among children.

That said, these results are not surprising in the least, and could easily be replicated.  Anyone can see the links between loot boxes and gambling almost immediately.

But saying that loot boxes are gambling has many implications.

Most of all, it implies that virtual in-game items have real world value.  This calls into question what that value is.  Game developers not only set the exchange rates for their in-game currency, but can manipulate the value of the items at any time based on their availability, their in-game stats, or even by promoting different aspects of the game.  And the game developers are the only seller of the items in question, which makes the problem even more complicated.

Virtual items being worth something in real world money also implies that you should be able to transfer them to other players, which is not always the case.  So, what happens to a player’s items (now worth cash) if they die?  And what if a game stops being supported and needs to shut down its servers?  Would game developers owe players a refund in real money if a particular item was redesigned or tweaked for balance?

You see how complex this can get.

By definition, this means that a lot of other things could be considered gambling.  Kinder Surprise, where you buy a mystery toy in a chocolate egg, is now a form of gambling.  Subscription boxes such as the popular Loot Crate, where you buy boxes of unknown swag each month to be shipped to your house, is gambling too.  And collecting baseball cards or pins in mystery packets would most definitely constitute gambling.  These are all things that have proven real world money and are marketed to kids.  By this logic, shouldn’t the legislation target them?

2. Are loot boxes addictive?

Judging whether loot boxes are addictive is complicated, because loot boxes need to be seen in the context of their game.  What goes on around a loot box and in the game itself would no doubt play a role in developing addiction.  For example, how often are players prompted to buy a loot box?  Is there a button that one-click orders a loot box visible on every screen in flashing neon lights?  And how useful are the items in game that the loot boxes are absolutely necessary to proceed?

Yes, game designers design their games to encourage players to keep playing them.  One could argue that this is what makes games fun.  It could then be argued that maybe the game itself, rather than the loot box, is the cause for addiction.  Should we be addressing that instead?  Screen time laws in certain countries address the potential problems from gaming addiction in young people.  For example, South Korea’s Cinderella Law prohibits children under 16 from playing online games between midnight and 6am.  And I bet those kids buy fewer loot boxes.

Saying that using psychology in game design is a dirty, manipulative trick is the same as saying that designing aesthetically pleasing art in a gallery is tricking the viewer into liking it.  Furthermore, psychology has been used in advertising (some of which is towards children) for years, and children consume that media now more than ever.  Our brains work in certain ways, and there’s a line between making something appealing and being exploitative, which comes down to intention.

Addictive behaviour can also be linked to other non-illegal practices.  Think of addictions to fast food or investing in the stock market.  How widespread is “loot box addiction” and can this be proved to be a cause of the loot boxes themselves rather than circumstances or personality traits?  Should we be treating the addiction instead of removing the item that a small number of people are addicted to?

3. Are loot boxes aimed at children?

The weakest part of this legislation is that there’s no research that shows how much money children spend on loot boxes.  For all the concerns about loot boxes being targeted to children, there’s little to no evidence that children are spending all their parents’ money on loot boxes, or being addicted to opening loot boxes.  I would imagine that the biggest in-game spenders are adults, not children.

I would expect that for many games, designers understand that children don’t have their own credit cards or income, so unless they are out specifically to exploit kids, loot boxes are aimed at paying consumers of the game.  Kids could be influenced to buy loot boxes, but it’s the same with any physical toy or virtual item that is not in a loot box.

Harsh language is casting games in a negative light

Back to the legislation.  This so-called “The Protecting Children from Abusive Games Act” would prohibit pay-to-win and loot boxes, which Sen. Hawley calls “manipulative design”.

He says video games “prey on user addiction, siphoning our kids’ attention from the real world and extracting profits from fostering compulsive habits”.  He accuses games for kids as trying to “monetize addiction”.

This sort of negative, accusatory language is common amongst press articles about the loot box issue.  It creates an exaggerated and inaccurate lens through which the gaming community is being viewed.  This frustrates me because it paints all games and game designers as these evil manipulators of young children.

I see the value in good intentions of protecting kids from addiction and the dangers of gambling.  This is a valid cause.  I’m just saying that there is a lack of understanding about loot boxes and games in general that makes laws to fully ban loot boxes seem misguided.  There needs to be more research, more experts, and more hands-on playing of many different games to get the whole picture.

Sen. Hawley’s page ends with citing Candy Crush as a “notorious example” of these practices.  Of all things, this reinforces how out of touch the bill is, and how little he and his team know about games.

Candy Crush’s player demographic is not children.  Ask any kid and it’s probably more likely that their mom plays it than they do.  In fact, Candy Crush is a game targeted to older women, and yes, it contains elements of gambling.  Just because it has cute graphics and happy music does not mean that it is marketed to kids.

Laws don’t understand technology yet

There’s no denying that people making the law can be out of touch with matters of tech.  Remember when Mark Zuckerberg had to explain Facebook to members of Congress who didn’t know what questions to ask regarding the data breach scandal in 2018?  Remember the awkward moments and memes?

Banning loot boxes outright highlights this disconnect.  It shows a lack of understanding of games, and if seen in a more sinister light, it shows a willingness to take advantage of that lack of understanding from outside the gaming community.

Are loot boxes addictive and dangerous to children?  Maybe.  But the fact of the matter is, we need more research and more academic studies.  We also need to evaluate loot boxes together with their games, not in isolation.  We must not jump to the conclusion that all loot boxes are bad, because not all loot boxes are the same.

Should loot boxes be banned?  No.  Loot boxes are a game mechanic, that if used correctly, allows players to feel rewarded when they open them.  The fact that they are “monetized” should not be synonymous with them being an evil cash grab.  Like any other product, games cost money to make and game developers want to make money – and that should not be seen as wrong.

This, however, is our responsibility as game designers, to design loot boxes that are fair and do not exploit players.  We should figure out how to regulate loot boxes, not ban them.

References Cited

1. Gerken, Tom. “Video game loot boxes declared illegal under Belgium gambling laws.” Technology. BBC News, 26 April 2018. Web. 23 May 2019.
2. Wales, Matt. “EA reportedly under criminal investigation in Belgium due to FIFA’s loot boxes.” Eurogamer, 10 September 2018. Web. 23 May 2019.
3. Vincent, James. “EA will stop selling FIFA’s in-game currency in Belgium because of a ban on loot boxes.” The Verge, 30 January 2019. Web. 23 May 2019.
4. Chalk, Andy. “Blizzard removes paid loot boxes from Overwatch and Heroes of the Storm in Belgium.” PC Gamer, 27 August 2018. Web. 23 May 2019.
5. Hern, Alex. “Video game loot boxes declared illegal under Belgium gambling laws.” The Guardian, 21 November 2018. Web. 23 May 2019.
6. Hawley, Josh. “Senator Hawley to introduce legislation banning manipulative video game features aimed at children.” Big Tech. Josh Hawley, US Senator for Missouri, 8 May 2019. Web. 23 May 2019.
7. Totilo, Stephen. “You Can Now Read The Proposed Senate Bill That Would Ban Loot Boxes In Games Aimed At Kids.” Kotaku, 22 May 2019. Web. 23 May 2019.
8. Good, Owen S. “Anti-loot box bill gathers bipartisan support in Senate.” Polygon, 23 May 2019. Web. 23 May 2019.
9. Rolfsen, Erik. “Loot boxes look a lot like gambling, UBC study finds.” UBC News. The University of British Columbia, 1 May 2019. Web. 23 May 2019.
10. Brooks, Gabriel A. and Clark, Luke. “Associations between loot box use, problematic gaming and gambling, and gambling-related cognitions.” Addictive Behaviors, vol. 96, 2019 pp. 26-34. Elsevier, 2019. Web. 23 May 2019.

Additional References

1. Kelly, Makena. “Game studios would be banned from selling loot boxes to minors under new bill.” The Verge, 8 May 2019. Web. 23 May 2019.
2. Hafer, TJ. “The legal status of loot boxes around the world, and what’s next in the debate.” PC Gamer, 26 October 2018. Web. 23 May 2019.
3. Cross, Katherine. “How the legal battle around loot boxes will change video games forever.” The Verge, 19 December 2017. Web. 23 May 2019.
4. Lum, Patrick. “Video game loot boxes addictive and a form of ‘simulated gambling’, Senate inquiry told.” The Guardian, 16 August 2018. Web. 23 May 2019.
5. Schreier, Jason. “U.S. Senator Says His Anti-Loot Box Bill Has The Video Game Industry Worried.” Kotaku, 21 May 2019. Web. 23 May 2019.