‘A r̶o̶s̶e̶ loot box by any other name would smell as sweet’

Whether you call them prize crates, battle packs, or even surprise mechanics, the meteoric rise of loot boxes as a game feature is both undeniable and alarming. Consider this: loot boxes are currently projected to hit a total market size of $50 billion within just the next two years.

Now let’s contextualize this statistic – the soft toy and pen industry combined totals a global net worth of $23 billion. This implies more will be spent on virtual cosmetic skins and gameplay advantages than on actual, tangible writing tools and your favorite childhood plushie.

So the question now becomes: why wouldn’t any company implement them? I think the answer to this is given in part by the growing prevalence of loot boxes across all genres from sports to shooters to MOBAs to even digital card games.

So What?

While I personally have no problem with what people spend their money on, this extends only to adults. Children on the other hand, now that’s where the problem lies.

Kids in the UK love to play video games. So much, in fact, that one report found that children as young as 10 spend up to three hours per day gaming, on average, with 16% of surveyed children having purchased loot boxes. While gaming has been linked to a host of positive cognitive effects, a report by the Children’s Commissioner highlights key concerns. Peer-pressure, for one, is rampant among kids, who give into purchasing loot boxes out of fears of losing out, with one child quoted saying ‘you could lose your money and not get anyone good, or get someone really good’.

More concerningly, we know industry frequently nudges gamers (much like the gambling industry) to encourage players to cough up more and more money on loot boxes. We know children are especially vulnerable to this and are far more likely to fall prey to these tactics. So what exactly are we doing about this?

The Law’s Blind Eye

Much to the delight of any industry, the regulatory environment in the UK on loot boxes hinges on self-regulation. In other words, absolute faith has been placed into the hands of companies within the industry despite numerous calls for reform. I don’t know about you but something feels odd about asking the very entity responsible for creating the problem too, well, fix itself?

The law has been silent for the most part on this. The Gambling Commission has made an explicit note that loot boxes do not fall under the ambit of the Gambling Act 2005. This means that certain resections cannot be applied to loot boxes such as age and ID verification. It is a confusing situation. If the act did apply to loot boxes, video game companies would be required to hold a license and abide by requirements set by the Gambling Commission (e.g. transparency). While this sounds enticing on paper, getting a license is hard, expensive and may only push out smaller players in the industry, leaving more room for the few… monopolistic sharks.

Amidst the fog, consultation with industry and lengthy governmental review on the Gambling Act and loot boxes are expected to seep into the better part of the year.

Will self-regulation work? While some evidence shows trends of willing companies removing loot boxes, it is too soon to say. Will the UK follow in the footsteps of Belgium where loot boxes are banned or will they simply turn a blind eye to the problem as in Russia? Only time will tell.