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Gaming has a loot box problem. These bundles of randomly selected virtual goodies, often purchased with real money, have quickly become a common sight in video games. From free-to-install mobile titles to premium Xbox and PlayStation blockbusters they're immensely popular, contributing to a global micro-transactions business worth billions of dollars a year: companies like Call of Duty publisher Activision now earn as much or more from sales of such items in-game as they do the games themselves.

But to some players, they can become an unhealthy obsession. “You'd tell yourself, 'Okay, you can spend €200 from your paycheck',” says Kevin, a 28-year-old self-declared former loot box “addict” who lives in Germany. “Once that was gone, you'd say 'Okay, €300 is fine,' and so on and so forth. Every time I'd check my bank account my heart would drop and I'd be mad at myself.”


Kevin estimates having spent around €10,000 on loot boxes in total, spread across a number of games including Activision's Overwatch and EA's FIFA 17. “Some months my bank account would leave me with a couple of euros after food, rent and loot box escapades. I was quite sad, because I had no money to have fun in my life outside my home. No cinema, no public swimming pool, no festivals. The addiction forced me to stay in, the only 'entertainment' being the loot boxes.”

The act of purchasing loot boxes has generated something of a community. On YouTube, some creators attract tens of thousands of viewers simply by recording their reactions to high-value loot box rewards. Kevin would discuss his luckier loot box finds on Reddit, but struggled to talk about his habit offline, even as the impact on his life became severe. Eventually, however, he brought it up with his girlfriend. “I told her, ‘Honey, in a week I spent €1,000 on FIFA 17. And I am sorry. I feel like trash because that money could have gone towards our future.' I was ashamed of myself and feared the worst but she was understanding and told me, 'It's okay, these games can be very addictive and I'm here for you, whenever you need me'.”

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Loot boxes and similar mechanisms have been defended as essential for modern games to break even, helping to offset a steep rise in development budgets in the early noughties. They are a central component of the online “games-as-service” model that sees publishers working to keep players glued to their games in order to keep selling them tiny morsels of content. But as time goes by, more and more players are coming to view them as exploitative and unhealthy.

When it launched last November, EA’s Star Wars: Battlefront 2 let players buy a virtual currency, Crystals, to spend on loot boxes containing powerful items, including “hero” characters such as Darth Vader. An example of “pay-to-win” game design, the system prompted a ferocious backlash on online. After losing billions of dollars in stock value, EA redesigned the loot boxes to be less impactful. In the current version of the game, they only yield “cosmetic” items such as character costumes that don't affect the odds in play.


Battlefront 2 has sparked a wider discussion about the role of gambling-style mechanics in games, with governments beginning to take note of the phenomenon. US Democrat politician Chris Lee has labelled the game “a Star Wars-themed online casino”, and proposed legislation to ban loot boxes outright. In April, the Netherlands Gaming Authority declared that four unspecified games with loot boxes were in breach of gambling law. Shortly after, Belgian authorities ruled that EA's FIFA 18, Activision's Overwatch and Valve's Counter-Strike: Global Offensive were “games of chance” and demanded the removal of loot boxes.

While acknowledging room for discussion, the games industry has closed ranks against these accusations. According to the US Electronic Software Association, loot boxes are not gambling but a “voluntary” and “optional” way of “enhancing” your experience. EA says that while it welcomes dialogue with governments on the issue, it does not agree that its games “can be considered as any form of gambling”. And with this year's E3 trade show fast-approaching, the role that loot boxes play in the business (and playing) of games will once again be front-and-centre.

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While strongly shaped by the practice of item trading in massively multiplayer online games, the origins of loot boxes lie with physical toys. In Japan in the early 2010s, free mobile games began making use of a gacha reward mechanic based on Bandai's popular gashapon machines, which dispense a random toy in a capsule. These gacha games are now one of the industry's most profitable genres: Nintendo's free-to-install Fire Emblem Heroes alone has made over $300 million since launch in February 2017.


In North America and Europe, meanwhile, many loot boxes riff on classic '90s cardgames such as Magic: The Gathering, which was sold in packets containing a set quantity of random cards. Among the most successful homages is Blizzard's online card game Hearthstone, which reportedly raked in $217 million last year.

The appeal of randomised rewards is, of course, much older than video games. Loot boxes are a hit with many players because they tap into something fundamental about how the brain learns. “We know the element of chance can increase activation in regions of the reward system that are related to 'approach motivation' - our desire to approach and engage,” says Professor Paul Howard-Jones, a neuroscientist at the University of Bristol and author of the book Evolution of the Learning Brain.

Uncertain rewards have been linked to an uptake of dopamine, he explains, a chemical integral to motivating repeat behaviour. One possible reason our brains make this association is that tasks with unpredictable outcomes suggest the possibility of improvement. “An attraction to uncertain rewards can keep us going when success is variable because we're still learning, encouraging us away from those we always fail at and those we have completely mastered and are no longer learning from,” Howard-Jones goes on.

Both young and old people are drawn to uncertain rewards, but teenagers may be more more susceptible than most. “An individual's midbrain dopamine response peaks at around 13 years old, while the frontal lobe circuitry for resisting impulses tends to carry on developing until late teens. On this basis, and in respect of their limited financial resources, we might expect teenagers to be particularly vulnerable to online gambling.” This is problematic, given that many games featuring loot box mechanisms can be legally sold to players who are too young to gamble.

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The obvious distinction between buying loot boxes and gambling is that loot box rewards do not have an explicit monetary value outside the game - a distinction crucial to the legal definition of gambling in the UK. Howard-Jones argues that uncertain rewards are a “defining feature” of most games, and that “virtual rewards that are only meaningful within the context of the game seem unlikely to lead to problem behaviours beyond it”.

The situation is muddled, however, by the fact that many in-game rewards can, in practice, be traded for real money via third-party websites. EA's FIFA series has a thriving “black market” where you can buy and sell in-game coins for use in the Ultimate Team card game. And while gambling may necessarily involve real money in the eyes of the law, virtual rewards or currencies arguably have a value to the player that might incentivise reckless consumption.

But whether or not items in a loot box are given an explicit value is not irrelevant. “If you transfer one currency to another digital currency that can be used to operate a gamified system, there is no doubt about it: there is value there,” says Merijn de Boer, director of operations at game publisher Indietopia in The Netherlands. Virtual currencies, he goes on, are being used as camouflage in this regard by less scrupulous developers – players are not technically paying for anything with a “real” value, which means those developers don't have to apply for gambling licenses. “Directing players like a pinball between currencies - e-bucks, v-bucks, Smurf-berries or whatever the currency - should be seen as a red flag by gambling commissions.”

De Boer points to loot box rewards that confer functional in-game advantages as especially toxic, but the same reasoning may be true of “cosmetic” items, such as visual accessories for characters. These can serve as desirable indicators of status within a game's community, particularly when it isn't clear which items have been bought or unlocked by playing the game. “Developers used to believe that 'cosmetic' loot boxes were less exploitative, but when viewed from the perspective of addicts, collecting cosmetic items seems to create just as many problems,” says Naomi Clark, a professor and game designer at New York University's Game Center.

For all the recent legal developments in Belgium and the Netherlands, governments are still playing catch-up on this front. Attempts at regulation to date have been either “ridiculously specific”, such as Japan's ban on extra-seductive “complete gacha” games in 2012, or “quick fixes” like requiring publishers to label games with in-app purchases, Clark argues.

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Part of the problem is that the practice is extremely diverse and always changing. “It's hard to even define what a loot box is, at the edges of the concept. A container of random items that a player buys with real money is clearly a loot box, but what about a loot box purchased with some kind of in-game currency? Well, you could say it's a loot box if that in-game currency is in turn purchased with real money, it's a real-money-equivalent. What if I get a loot box every 24 hours automatically, but I can accelerate that timer tremendously if I successfully complete tasks in the game?

“In Overwatch, players in some countries can't buy loot boxes directly, so they purchase currency and 'receive a loot box as a gift'. That's an absurd loophole!” Clark says. “These are the kinds of shenanigans that start to crop up when blunt regulations are applied, and more fine-tuned regulations would take time, political will, and a lot of cooperation from the game industry. That may happen eventually, but as far as I can tell it's a ways off.”

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But a fundamental problem with tackling loot boxes is that unpredictability is part of what makes games entertaining. “Developers are sometimes confused about this because in the wider field of game design, we often want players to make mistakes, feel frustrated or regretful about decisions, lose a game, take a risk that doesn't pay out, and so forth,” says Clark. “These experiences are all part of various kinds of gameplay.”


The “bright line”, however, is asking players to pay in order to increase their enjoyment of the game, and worst-practice examples aren't hard to spot: misleading players about loot box contents and their in-game value; hiding how updates to the game will affect that value; springing a purchase opportunity on players at “moments of weakness”, such as when you are very close to either loss or victory.

In the absence of regulation, problem players are concocting their own ways of weaning themselves off loot boxes. Kevin has come up with something particularly ingenious: a physical loot box containing rewards for healthier behaviour. “Depending on what I do – activities around the house, go for a jog, read a book, socialise outside – it would earn me a pull from my own loot box,” he says. “This would include stuff like 'Play 30 Minutes of Gacha Game XY without spending money' and so on.”

And Kevin has words of encouragement for any players in similar straits, “If you play any game that has loot boxes that give you a benefit, don't feel intimidated. I was intimidated and tempted when I played FIFA. Intimidated that I wouldn't be good enough to compete [without loot boxes] and tempted by seeing others being lucky. Never feel intimidated. Play at your own pace. Nobody is standing behind you forcing you to do this,” he says, defiantly. But until developers change their business models, and regulators catch up with dubious practices, the task of getting to grips with the gaming industry’s loot box addiction remains very much with the players. “You are the one in control,” says Kevin. “And only you can control your actions.”