Why are they controversial?īeyond its association with gambling, opponents have described the sale of loot boxes as predatory and exploitative against consumers. In this context, loot boxes would not be considered gambling as they are a single element of a larger game of skill thus, they escape regulation. Conversely, under Dutch gambling laws, gambling controls only apply if a ‘game of chance’ is a standalone aspect like a slot machine. As a result, companies can face criminal prosecution for selling loot boxes in their games without a license. For example, the Belgian Gaming Commission found that loot boxes sold for real currency constitute gambling and are subject to all gambling regulations and controls. As a result, there is a complete lack of uniformity on how loot boxes are governed across European countries. In Europe, gambling is regulated at the national level. Regulating loot boxes as a form of gamblingĬurrently, most legislative attempts to mitigate the harmful effects (which will be addressed below) of loot boxes focused on whether or not they should be regulated as a form of gambling. Unlike other in-game purchases, consumers don’t know what they are buying instead, they are paying to stand a chance of receiving some item of rarity, similar to a raffle or lottery. Purchasing loot boxes has been associated heavily with gambling due to its element of chance.
Consumers spend real money on a mystery box consisting of random in-game content that will either give them a cosmetic item (such as an avatar skin) or affords them some type of in-game advantage within the context of that game.
Loot boxes can be understood as surprise packages or mystery boxes of digital content within a video game. Loot boxes are a prime example, as shall be explained below. Despite their commercial success, certain methods of in-game purchases have come under heavy criticism for their deceptive and sometimes predatory designs. Electronic Arts, the studio responsible for many of the industry’s most successful sports game franchises, generated more than 1.6 billion USD from in-game purchases through their FIFA 21 game alone. In-game purchases have become the choice model for many developers, particularly in mobile gaming. Over the past twenty years, we have seen new business models emerge from the industry in addition to traditional game sales.
However, the indu stries evolution is not limited to gaming content. This meteoric rise has seen the development of large, complex, and immersive games that belonged to the realm of science fiction merely fifty years ago. In 2021, it generated around 180 billion USD in worldwide revenue, surpassing Hollywood and the music industry combined. The video game industry has grown into one of the largest entertainment industries in the world.
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