'Loot Boxes' In Games Are Considered A Form Of Gambling, Said UK Committee

14/09/2019

Those who play games on the modern internet should know the one of the well-known feature, and one of the most-anticipated consumable called 'loot box'.

In video games, loot boxes are also called 'prize crate', or simply as 'loot'. They are consumable virtual items which can be redeemed to receive randomized selection of further virtual items, or even more loots, ranging from simple customization options for a player's avatar or character, to game-changing equipment such as weapons and armor.

Originated from massively multiplayer online role-playing games, loot box is practically a form of monetization by the the developers, especially in mobile games that are free to play.

And here, according to the UK committee, these loot boxes should be considered a form of gambling.

The UK Parliament’s Digital, Culture, Media and Sport Committee released their conclusions from their investigation into addictive game mechanics. While the report not solely focused on games or loot boxes, the committee firmly condemns the use of such mechanics, in spite of attempts by gaming developers to spin them the other way.

Loot box - Gambling (Yes/No)

The committee’s findings concluded that, for all the attempts by the gaming industry to spin the situation another way, loot boxes are considered gambling.

"One of the most prominent features in the debate about the potential links between game mechanics and gambling is loot boxes."

"We consider loot boxes that can be bought with real-world money and do not reveal their contents in advance to be games of chance played for money’s worth."

For that reason, the committee suggested that the government should bring forward regulations under section 6 of the Gambling Act 2005, to specify that loot boxes are a game of chance.

"If it determines not to regulate loot boxes under the Act at this time, the Government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money’s worth."

Loot box mechanics are integral to major games companies’ revenues. Here, the committee said this is a clear evidence that the developers are profiting from problem gamblers. So this, according to the committee, should be a a serious concern to the industry.

"We recommend that working through the PEGI Council and all other relevant channels, the UK Government advises PEGI to apply the existing ‘gambling’ content labelling, and corresponding age limits, to games containing loot boxes that can be purchased for real-world money and do not reveal their contents before purchase."

Apple and Google already mandate such disclosures on the their respective app store, and so did Nintendo, Microsoft, and Sony that have all committed to mandate loot box odds disclosures on their platforms by the end of 2020.

And the committee here, aims to join them, as well as the nations that are already condemning loot boxes. But at this time, none has done anything to actually take action against them.

ESA logo
ESA is the trade association of the video game industry in the U.S.. It was formerly called IDSA, before rebranding to associate itself better in the realm of entertainment software

In respond, the Entertainment Software Association issued a strongly-worded disagreement with the committee’s decision, saying that:

"We take seriously the issues raised in the UK Parliament's Digital, Culture, Media and Sport Committee report, but strongly disagree with its findings."

"As demonstrated by the recent announcement of policies regarding the disclosure of the relative rarity or probability of obtaining virtual items in paid loot boxes as well as the robust parental controls that empower parents to control in-game purchases, the video game industry is a leader in partnering with parents and players to create enjoyable video game experiences."

The announcement of policies the ESA statement references was made in August 2018, during the Federal Trade Commission's day-long workshop on consumer issues surrounding loot boxes.