Note: This post was written by guest contributor Dylan Slavey.

People are constantly looking for new forms of entertainment, and the current front runner is the video gaming industry. In 2017, the gaming industry made an estimated $116 billion, followed by TV at $105 billion (D’Argenio, 2018). The movie and music industries combined didn’t make half of what gaming did. As exciting as it is to see this new face of entertainment succeed, there are ramifications that come with it.

In recent years, games have experienced an uptick in the number of loot boxes being implemented into their gameplay. A loot box is an in-game item that gives players a small number of rewards that vary in type and rarity. These rewards can then be used in the actual game to provide players a unique experience. Most items that come out of loot boxes are cosmetic, meaning they don’t provide a player an advantage. Popular games with loot boxes include Counter Strike: Global Offensive (CS:GO), Overwatch, Star Wars Battlefront II, and most recently, Apex Legends. For this essay, I will be focusing on the loot box systems in CS:GO and Star Wars Battlefront II.

A prime example of the pernicious nature of the loot box system is in the game CS:GO. In CS:GO, players have to buy “case keys” that allow them to unlock different types of cases containing cosmetic items such as weapon skins and dialogue lines. Most of these keys cost around two dollars and give the player a chance to get the item they want. In addition to buying case keys in the game, a number of third party websites exist that sell CS:GO items in a variety of ways. They offer traditional loot boxes, a stock market, and the increasingly popular “trade-ups” system, which allows players to risk their existing items for the chance of a more valuable item. The most shocking aspect of the CS:GO loot box system is how expensive the items are, costing anywhere between $0.10 and $3,000.

In one of the biggest video game controversies in recent years, the creators of Star Wars Battlefront II implemented characters that could only be unlocked by buying loot boxes. This caused an immediate uproar. Gamers claimed the system was “pay-to-win,” indicating that those with more money had an unfair advantage.

The CS:GO loot system and the Battlefront II controversy increased the discussion around loot boxes and whether they are a form of gambling. For example, compare the act of buying and opening a loot box to playing a slot machine. The player in both cases is paying for a chance to gain something of real or perceived value. Games are employing the same strategies in their loot box system as the ones seen in Las Vegas casinos. This is apparent in the CS:GO trade-ups system, where participants literally risk something of value for the chance to obtain something of greater value. It was time for a closer look at loot boxes to see what they were doing to gamers and the gaming industry as a whole.

The link between loot boxes and traditional gambling has found more traction in the media in recent years. Experts and politicians have begun to offer their opinion on the issue and discuss the science and law behind loot boxes. Some U.S. states have already attempted to regulate loot boxes. Representative Chris Lee of Hawaii states, “[Loot boxes] are specifically designed to exploit and manipulate the addictive nature of human psychology” (Bailey, 2018). The fact that leaders in the United States have become aware of loot boxes gives hope for a safer and more regulated industry. This sort of change is already being seen in other countries. In April of 2018, gambling officials in Belgium stated video game publishers must remove loot boxes from their games, facing a $900,000 fine and possible jail time for noncompliance (Fung, 2018).

Government intervention in gaming is not something gamers should fear. Due to the increased understanding of the gaming industry, the chances are slim that a government policy will be enacted that limits the rights of players. What government intervention would do is protect players from potentially harmful systems in games, especially when players may not know they are being manipulated. This becomes even more important when you consider that a large part of the gaming community is composed of children.

A study from Central Queensland University found that people who have a stronger sense of coherence – the quality of being logical and consistent – have less of an issue with problem gambling (Mental Health, 2017). Logically, this makes sense; those who have a better understanding of their gambling and can view it objectively are less likely to suffer the more severe consequences of problem gambling than those who do not understand how their mind is being manipulated. This is a particular problem when it comes to loot boxes, considering how deceptive their gambling-like attributes are. When players open a loot box, they are met with an exciting tune, and items come flying out of the case and onto pedestals front and center of the screen. Keith White, executive director of the National Council on Problem Gambling, notes that audiovisual cues are important to the effectiveness of a gambling activity (Bailey, 2018).

The visually rewarding presentation of a loot box in the game Overwatch

Games use this extravagant display to hide the true nature of their loot boxes while also providing an experience to keep players coming back. Games are also providing players with more incentives to buy loot boxes. Most loot boxes give cosmetic items only that offer no real advantage to the player, but that’s not the case in Star Wars Battlefront II. The items that come out of loot boxes in this game are known as Star Cards and can grant a certain competitive advantage. An article from PCWorld explores the issue presented in Star Wars Battlefront II, stating, “Certain Star Cards still modify a class’s equipment – say, replacing a grenade with a remote-detonated explosive – but the more problematic ones give direct boosts to a class. In space battles, for example, an X-Wing or TIE Fighter might have a card that grants a two-percent weapon damage boost” (Dingman, 2017). Games are getting to the point where players feel obligated to participate in what should be optional spending.

One of the big reasons legal reforms of loot boxes fail is because of a lack of academic studies showing the link between loot boxes and gambling, but research is beginning to take place. A study from the PLoS One journal looked at the link between loot box users and problem gambling. In this study, problem gambling is defined as “a pattern of gambling activity which is so extreme that it causes an individual to have problems in their personal, family, and vocational life. These issues range from domestic abuse and intimate partner violence to involvement in illegal activities, increased medical costs, and suicidality” (Zendle & Cairns, 2018).

The study surveyed people 18 or older who played games and asked what in-game items they spent their money on and how much they were spending each month. The survey also measured each participant’s severity of problem gambling according to the Problem Gambling Severity Index. Finally, participants were asked how much money they spent on in-game items other than loot boxes each month. The results of the study showed a direct correlation between problem gambling and loot box spending. Those who ranked highest on the Problem Gambling Severity Index spent the most money on loot boxes per month. At the same time, participants spent relatively equal amounts of money on non-loot box in-game items each month regardless of their ranking on the Problem Gambling Severity Index.

It is impossible to tell whether loot boxes led to increased problem gambling or whether problem gamblers found loot boxes more attractive, but the study was able to showcase the direct correlation between loot boxes and problem gambling.

Purchasing in-game currency with real money

As the popularity of loot boxes increases in the gaming industry, a series of questions begin to arise. What are the effects of loot boxes on players? What do gaming companies have to say about this? What does this mean for the future of the gaming industry? All of these questions are important in understanding the context around loot boxes.

The effects loot boxes have on players varies from player to player. As mentioned previously, some players have a strong coherence with loot boxes and are less likely to be manipulated. On the other hand, players who do not fully understand what they are doing are more likely to fall victim to the mental tricks being employed. For example, when players open a loot box in hopes of receiving a specific type of item, they are setting themselves up for failure. The chances of them getting the item they were looking for are slim given the number of items loot boxes offer.

As a result, they are opening more loot boxes in hopes of getting what they are looking for, even though their chances do not increase with each loot box purchase. This idea of continuing to spend money for fear of having wasted money on previous attempts is known as the Sunk Cost Fallacy. This can also be observed in casinos. When someone plays a slot machine, they can dig themselves into a hole. They are likely to keep playing until they finally win, even if the money they win is far less than what they spent. In addition to this Sunk Cost Fallacy exists the idea of loss aversion in which a person’s pain from losing is almost twice as intense as their pleasure from winning. This also leads to players spending more to justify their pain from losing.

With the increased discussion around loot boxes, little attention is being given to the companies adding them. The entertainment software association said in a statement, “Contrary to assertions, loot boxes are not gambling. They have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase. They can enhance the experience for those who choose to use them, but have no impact on those who do not” (Fung, 2018). First of all, this statement is not universally true, as shown in the case of Star Wars Battlefront II, where not buying loot boxes can have an impact on players. Also, game companies would be foolish to badmouth the items that made them an estimated $30 billion last year (Zendle & Cairns, 2018). Gaming companies are showing a complete disregard for the experiences and mental health of their customers every time they create a loot box system.

Finally, the increased implementation of loot boxes could mean big changes for gaming. When companies add loot boxes and other similar systems into their games and still see tremendous profit, they are more likely to add them to future installments, as well. As other smaller companies see the success loot boxes have in these larger games, they may be more inspired to add them to their games. Overall, the more loot boxes are added to games and the more they go unchallenged, the more they will damage the player experience. They may also lead to more pay-to-win systems being implemented in the future.

Gaming companies are increasing their implementation of lucrative loot boxes with each new installment, and this could mean disastrous consequences for the gaming industry. Loot boxes have shown a direct link to problem gambling, even compared to other in-game purchases, and can have a negative effect on gamers. They manipulate players’ minds to keep them coming back. At the same time, their presence hints at a future where cheap cash-grabs are commonplace.

It’s time for gamers to recognize loot boxes for what they are and decide if this is what they want gaming to be.

References

Bailey, J. M. (2018, April 24). A video game ‘loot box’ offers coveted rewards, but is it gambling? The New York Times. Retrieved from www.nytimes.com/2018/04/24/business/loot-boxes-video-games.html

D’Argenio, A. M. (2018, July 10). Statistically, video games are now the most popular and profitable form of entertainment. Gamecrate. Retrieved from www.gamecrate.com/statistically-video-games-are-now-most-popular-and-profitable-form-entertainment/20087

Dingman, H. (2017). How loot boxes are turning full-priced PC games into pay-to-win games of chance. PCWorld, 35(11), 30–34.

Fung, B. (2018, November 28). U.S. consumer watchdog to investigate video game loot boxes. Washington Post.

Mental Health – Gambling Research (2017, July 3). Mental Health Weekly Digest.

Zendle, D., & Cairns, P. (2018). Video game loot boxes are linked to problem gambling: Results of a large-scale survey. PLoS ONE, 13(11), 1–12.