by Daniel Roodt
In recent years, there has been a rise in calls to classify loot boxes in video games as gambling, and as a result, be regulated similarly. This has led to the House of Lords in the United Kingdom recommending that the government classify them as gambling, and a lawsuit levelled against Electronic Arts (EA) the creators of the popular FIFA game.
The principle of loot boxes is relatively simple. Players pay a certain amount of real-world money, and in return, they get given a loot box containing randomly generated in-game items. These items may, or may not provide them with an edge over their fellow players.
An excellent example of this is FIFA packs, which can be purchased in FIFA ultimate team. They are paid for using in-game currency that is either earned through playing the game, a process that takes a long time or through the purchasing of FIFA points with real-world money. The packs differ in price, and the more expensive the price is, the greater the chance is of getting good players.
However, as these packs are randomly generated, there is no guarantee of ever getting an excellent player. Quite often players will purchase a large number of packs, but will never "pack" a brilliant player. As Zendle, Meyer and Over wrote in a recent study on the matter "players do not know what a pack contains when they pay real-world money for it."
The FIFA packs system has led to a lawsuit levelled against the creators of the game, EA in France. The lawsuit argues that the game has been mislabeled, and should be classified as gambling, and not as a video game. They state "The developers of this game mode have created an illusionary and particularly addictive system."
The applicant (plaintiff) is a 32-year-old French chauffeur named Mamadou, spent over €600 on FIFA Ultimate team in about six months. Unfortunately for him, the best player he got was Napoli centre-back, Kostas Manolas, who has a rating of 85 (which isn't that good).
Mamadou stated "I didn't even know him (Manolas)!" and "I put so much money in just to get Manolas. People I know have put in €2,000 or €3,000, it's crazy. The amount I have spent has made me fall behind on my rent payments."
Going off this example, the similarity to gambling appears rather apparent. Just like a slot machine, you put in money, and your prize is randomly generated, and you may never win something good. You can spend all the money you want, but there is no guarantee that you will get some of the best players in the game.
Mamadou further stated "You quickly become addicted to this game," and "Whenever I buy a pack, I tell myself that this is the last time, but I always do it again. You get so frustrated when you don't get good enough players that you buy again and again."
The issue with these loot boxes is that unlike gambling, they can be bought by people under-18 as well. You do not need to provide any identification, which means that children of all ages can purchase these loot boxes, as long as they have access to their parents credit-cards.
There are countless examples of people spending lots of real money on these FIFA packs. A friend of mine who used to play Ultimate Team regularly thinks that he and his brother spent about R2500 over a few years on these packs. He also stated that he has an incredibly wealthy friend, who spent "in the tens of thousands of rands" on these packs, without his parents' knowledge.
This has led to calls for it to be classified as gambling, and as a result, be regulated in the same way.
In the United Kingdom, the House of Lords Gambling Committee recently recommended: "The government must act immediately to bring loot boxes within the remit of gambling legislation and regulation." The report further stated, "If a product looks like gambling and feels like gambling, it should be regulated as gambling."
This would be classified under the Gambling Act of 2005, and the UK government has informed the committee that they would thoroughly explore loot boxes in their next review of the gambling act.
However, there are some conflicting opinions on whether it is necessary to take such drastic measures. Some experts believe that there is sufficient academic research proving the correlation between gambling and loot boxes. Others feel like more research needs to be done before making such a groundbreaking classification.
Professor Andrew Przybylski of the Oxford Internet Institute argued that this blanket classification on all games with loot boxes as gambling would be "apocalyptically stupid." His concern is more related to the lack of evidence as well as not having a clear plan as to how this ban would be implemented.
Dr David Zendle, a lecturer in computer science at the University of York, believes who conducted extensive research on the matter believes that there is enough evidence. He said "Loot boxes share many similarities with gambling. It, therefore, makes sense that this uncontrolled spending may transfer to loot boxes too."
These legal challenges have been met with much concern in the gaming industry due to the enormous profitability of microtransactions. According to a report from Juniper Research, gaming firms and apps made $30 billion from microtransactions in 2018. They predicted that this number would increase to $50 billion in 2022. Furthermore, EA's popular Ultimate Team modes, primarily played in FIFA, made up 28% of the company's total revenue in 2019.
Based on these numbers, it is easy to see why the gaming industry is concerned with these rulings and why they may put up a substantial fight to block these new measures. Ultimately, the safety of children and other people is the main priority, and it remains to be seen whether this will trump pure profitability.