Loot Boxes and Gambling in Video Games

Video game developers are coming under increasing scrutiny for the use of randomized digital rewards called ‘loot boxes’ that closely resemble gambling.

Loot boxes have appeared in a range of popular games recently, including Counter Strike: Global Offensive, Overwatch and Star Wars Battlefront 2.

Loot boxes are part of a long-running trend of games introducing in-game purchases and micro-transactions using real money. Over the last ten years, multi-billion dollar gaming companies have harnessed big data to find the best way to maximize in-game spending and get players addicted to spending more.

Loot boxes are worse, however, in that they are randomized and therefore, potentially more addictive. They work in the following way: a player pays real money to buy a digital ‘box’ in the game. They do not know what is in the box. Once they buy the box, they open it to find a set of random rewards. This can include unlocks, upgrades, weapons or trophies. The rewards vary in quality and quantity, meaning that there is an incentive to keep purchasing more and more ‘loot boxes’ over time. Eventually, a small minority of players will become addicted to purchasing loot boxes, spending thousands of dollars on in-game micro-transactions.

In 1948 the Harvard psychologist B.F. Skinner discovered that a loot box kind of system – randomized rewards with randomized qualities – can trigger psychological addiction to a beahviour. Skinner ran a series of experiments on rats in an ‘operative conditioning chamber’ (now known as a Skinner box). He placed the rats in the box with a lever. When pressed, the lever would give out food. Initially, the rats pressed the lever only by accident. Over time however, they learnt to press the lever immediately when placed in the box. They became trained in a behaviour.

Skinner found that randomizing rewards (the amount of food) made the addiction effect much more dramatic. Rats began to press the lever even when they hadn’t received food the last time. They pressed the lever hundreds of times, without receiving any food, hoping to receive food once more. They became addicted to pressing the lever beyond all reason and logic.

Recent neurological studies have found that games can have a similar effect of addiction by manipulating a person’s reward system. Mechanics like loot boxes can reinforce certain behaviours (in this case, spending money), in a manner similar to a psychological addiction.

Randomized rewards triggers the hope that soon (illogically) a player will receive a ‘big payout’. In this way, loot boxes have a similar psychological framework to slot machines. People keep playing slot machines on the hope that they will win big. This is the root cause of the latest form of video game addiction.

Modern video game companies have made billions of dollars over the last ten years using in-game transactions and in more recent years, loot boxes. Getting gamers addicted to in-game purchases is a highly profitable move for a company. Once addicted, players provided a steady flow of cash. Ethical questions abound however as to the moral culpability of companies that create video game addicts who spend their whole life savings on a game.

In recent years, loot boxes have come under sustained public criticism. The recent release of Star Wars Battlefront 2 triggered a sustained player backlash to the inclusion of loot boxes. Players would be able to pay for a loot box to unlock a popular character, like Luke Skywalker, or play tens of hours instead. In response to sustained criticism, publisher Electronic Arts had to suspend all in-game purchases. For the first time, players managed to reverse a major publisher’s decision on the practice.

Governments around the world are considering banning loot boxes, due to their close association with gambling and psychological addiction. From Belgium to the United Kingdom to the Victorian government in Australia, various governments have either begun, concluded or are in the middle of an investigation. A legislator in the United States has also expressed concerns about the practice.

It remains to be seen whether governments will outlaw loot boxes in games. Regardless of whether loot boxes are outlawed, significant questions now exist about the addictive mechanics used in modern video games. The question remains whether these companies are justified in exploiting players for the sake of profit.


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