Research report, Between Gaming and Gambling, found that many paid reward systems like loot boxes used similar techniques found in regulated gambling. Spinning wheels, flashing lights and ‘near-misses’, aspects of persuasive design, encourage children to spend more.
Furthermore, the items available with chance-based features like loot boxes tend be ones children want most. The hope for a rare item keeps children spending in-game.
Why children want these items
The report listed five reasons children might want to spend real money on virtual items.
To keep up with others
They want the ability to show off the rare skin or item or weapon. It’s a type of “social currency” where how their avatar looks is important to show skill and express themselves.
For an in-game advantage
Weapons, power-ups and passes to reach parts of the game faster are often things users can purchase. To get ahead of others, children often look to a microtransaction to make it happen quickly.
To look a certain way
While some items help users get ahead, others help them look a certain way. Children often don’t want others to see them with the default skin, so they purchase clothes, accessories, actions and more. For some, it could form a collection of theirs as well. Collecting all versions of a particular item is desirable for some children just like collecting action figures or coins offline.
For the prestige of having rare items
Games create “artificial scarcity” that make items more desirable. For gamers and especially young people, having a rare item allows them to show off and feel like one of the lucky ones.
To trade for other items
Some platforms like FIFA and Steam allow users to buy and trade items alongside other players. Rare or desirable items could allow children to trade up for access to other items they want.
Regulation of loot boxes in video games
Loot boxes were the subject of discussion in UK parliament. The Government called for evidence on the dangers of loot boxes and gambling-like behaviours in 2020. This was part of a bid to review the Gambling Act 2005, which does not extend to loot boxes.
However, in 2022, they decided more research was needed, especially to see if in-game gambling behaviours led to issues as adults.
The UK Goverment’s response said that children and young people should not have access to loot boxes unless enabled by a parent or guardian. Additionally, they said all users should have awareness of in-game spending controls and information.
What are gaming companies doing about loot boxes?
Gaming companies continue to address the issue themselves in different ways.
Middle-earth: Shadow of War dropped microtransactions and in-game purchases within months of launching. Users complained that the game was too reliant on in-game spending for players to finish the game.
In 2019, Epic Games replaced “loot crates” with clearer in-game purchases. Instead of mystery items, users would know exactly what they bought.
In 2020, PEGI announced that game publishers would start to provide additional information about in-game purchases of “random items” and specifically about loot boxes.