Why Loot Boxes are Causing Controversy

Loot boxes compared to gambling

The video gaming industry has been dealing with a particularly vicious and unsettling controversy involving the exploitative nature of loot boxes. Have loot boxes become too similar to real money gambling and how ethical are these types of in-game microtransactions? The debate over loot boxes has been the most singularly divisive issue that has dominated the gaming industry in recent years; an exploitative practice that many believe takes advantage of players.

What are Loot Boxes?

Loot boxes are incredibly popular, and you’ll find them offered to players for purchase in a number of video games. Essentially, they are virtual boxes that contain random contents, which players can purchase using cash or in-game achievement credits. Loot boxes contain everything from gear, character costumes, unique items and power-ups, to special skills and the chance to unlock new levels. Rare and sought after items appear less frequently in loot boxes, however for most players, the expense seems to be worth the possibility of getting their hands on these coveted items. They can also dramatically increase a player’s ability to dominate and win the game.

Addictive by Design

Since players never know what their newly purchased loot boxes contain, the rush of buying them and rolling the dice on their contents has been compared to the psychological response one gets when playing casino games. This becomes incredibly unsettling when you consider how many children play these wildly popular loot box-based games, and how much money they spend on them.

Now, many industry experts are saying that games that use these gambling-like mechanisms make underage players more susceptible to addiction. Loot boxes and similar microtransactions are designed to take advantage and exploit human psychology, making them predatory by nature and potentially harmful to children. These ridiculously exploitative business practices, which are employed by many in the video game industry, are coming under fire, with regulators and legislators across the world starting to speak up against the practice.

Microtransactions in Gaming

Microtransactions such as loot boxes have become more prominent in gaming in recent years. They are used as a means of supplementing and generating an additional income stream for developers and game studios. It’s a slick sales tactic that you see in many games promoted as “free to play”, however the catch is that players need to constantly purchase downloadable content and small-ticket items which are necessary for smooth and engaging gameplay.

Certain games have been openly called out for monetising every aspect of the game with loot boxes and microtransactions, so much so that players felt blatantly exploited. It creates a lopsided dynamic within the game, especially when it can take hours, if not days of dedicated gameplay to power-up a character’s abilities. This makes purchasing loot boxes a potentially easy (if not costly) way of getting those coveted abilities and items.

One thing is for sure, these microtransactions are big business and there are billions of dollars on the line here. Industry heavyweight, Ubisoft reported that the company made more money from microtransactions that it did from the digital sales of the games themselves.

Loot Boxes and the Legal Landscape

More and more jurisdictions across the globe have started the process of protecting their citizens from predatory and exploitative practices used by the video game industry. Hawaii recently introduced legislation that would require all loot box-based games to be clearly labelled and restricts sales to anyone under the age of 21. Similar proposals have been considered in other states and countries such as Australia have started a legal discourse on whether loot boxes meet the legal definition of gambling. In Germany, loot boxes may be banned altogether, with various groups lobbying for their removal.

The controversy that surrounds loot boxes has brought the video game industry to an interesting juncture. The tipping point has been reached and the outcome of recent developments and prospective legislature will surely shape the future of the industry in profound ways. The law has always been one step behind technology, creating an environment where game developers and tech companies can largely do as they please with very little recourse. This is set to change and it will be interesting to see how they adapt to regulation or what real impact it will have on games in the



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