Loot Boxes: ‘Kinder eggs’ or online slot machines for kids?

Gaming has evolved rapidly since the 2000s began, leading companies to maximise their profits in other ways than just selling video games. An influx of microtransactions, which was initially conceived by Microsoft in 2005 as a way for publishers to gain a different form of revenue, had become normal when not so long ago was unheard of. I, being in my late twenties, started gaming offline, so I try to avoid it. For others younger than my age group, this is what they’ve always known gaming to be. Others susceptible to gambling are being targeted with psychological strategies to empty their bank accounts on meaningless in-game items that are believed to give them an edge over their opponent. Usually, these purchases are labelled with a countdown for the amount of time they’ll be available, pressuring gamers into purchases.

In current times video games are plagued by a “pay to win” atmospheres, such as Fifa and their Ultimate Team concept, which is the most popular game type on the platform, Apex legends, Battlefield and Star Wars Battlefront, to name just a few. These games have one major factor in common, EA games. This company have previously been questioned on such topics to which Kerry Hopkins explained, “loot boxes are quite ethical and fun”, also stating that “they’re just like a kinder egg.” This is not the case in Gamble Aware’s opinion, commissioning a research study in January 2020, published April of this year on the connection between loot boxes and gambling. Dr James Close of Plymouth University was a senior researcher on the project and, along with his team, have found some interesting discoveries. The Gamble Aware funded research project can be accessed through this link.

A significant influence on microtransactions in the video game community spending so much on loot boxes could be the thousands of streamers and content creators on the internet. With some boasting about the packs, they have opened and attained exceptional items, pushing the easily influenced viewers to spend, spend, spend. Some games even offer a “content creator code” option, where the streamers username can be entered for them to receive a commission on the transactions. Clearly, this form of free advertising for the platforms should be monitored as the vast audience can equal as much as a TV audience at times. Jack Frags, a prominent YouTuber, has 3.8 million subscribers on his channel, to which he reminds the audience in most videos to use his code to “help him out”. This is only one of the thousands of youtubers and Twitch streamers involved.

One suggestion from Gamble Aware’s study was the implementation of “gatekeeper obligations”. Something that is being looked at in the influencer realm of Instagram currently for promoting products the “influencer” isn’t using themselves. The study explained, “Just as we are starting to observe in other domains – for example, social media and news aggregation155 – gatekeepers should be accountable for the content they manage (and the profit they gain from it).” Shroud, one of the most prolific streamers, considered a pioneer of the new phenomenon, claims to make millions of dollars through people using his creator code in games such as Fortnite. 

From mobile games to console games, every online platform has its own form of digital currency that must be either earned or bought with real cash. The discrepancy here is that online currency can start to be disassociated with real money. Especially when the user is of young age and has no real-life experience with the value of a pound or a dollar, euro etc. This can be compared to exchanging real currency for chips at a casino. The age of customers is monitored due to the gambling aspect intertwined in action, so why on earth are games companies getting away with pushing these online poker chips on age groups of sometimes less than ten years old. If parents were to know the complete story of these in-game transactions and how they are pushed upon their children via algorithms, then a catalyst for reform in the law for these companies could come about.

The old-fashioned way to get good at a video game or attain a high-value item is to grind your way through objectives to complete assignments. Hours and hours of sometimes sweat and tears would go into completing some. How loot boxes are installed into these games has taken out any sense of accomplishment linked to gaming. Creating a pay to win atmosphere that is toxic at times. For example, on a first-person shooter such as Call of Duty Warzone, certain character skins hold a considerable advantage. Online gamers know it! Some darker skins can be almost invisible in darker spots of the map. Of course, this was a paid item by purchasing one of the battle passes, which is also a regular occurrence. During the first year of the game’s release, bringing it back out sporadically so that the unfortunate few who don’t already have this skin type sought-after bank details into their gaming software. It’s a clever trick from games companies to get players to panic buy as it’s only back for a ‘limited amount of time’.

EA CFO Blake Jorgensen claimed at the credit Suisse technology, media & telecom conference in 2010 that “as we kept reviewing the game, it continued to look like a much more linear game [which] people don’t like as much today as they did five years ago or ten years ago” suggesting that single-player games were dying. Eight years on from this statement, single-player games like God of War were breaking records for the number of units sold, also winning the game of the year 2018. Many more highly anticipated games are single-player only, Last of Us, Spiderman, Horizon Zero Dawn, all these receiving sequels due to their popularity. While online gaming is excellent, a single-player narrative-based game will always be accepted when the right time and money have been put into it.

After EA released corrupt games such as Star Wars Battlefront Two, half-finished and bursting with microtransactions to the point that you couldn’t even earn rewards through gameplay, the fan base had enough. Characters that were advertised as playable at the launch were, in fact, added as part of the loot box systems, leaving players having to spend extra money to attain certain things. All forms of a progression-based system were non-existent. It’s been updated after the boycott of the game, and it’s actually a playable game now, in my opinion. For EA, though, it’s as if a roll of the dice for how the fans would take it did not mean anything to the company. As it could be rectified by adding a free DLC expansion pack.

“It’s created to addict”

Games have come to a point where they should be held accountable for the addictive, obsessive, repetitive drive. In 2019, Prince Harry stated to youth charities at a YMCA in South Ealing that “a game like Fortnite may not be so good for children.” Reported by the Metro. He carried on, “it’s created to addict, an addiction to keep you in front of a computer for as long as possible. It’s so irresponsible.” With games of Fortnite only lasting from 5 minutes to half an hour depending on how well you do the trick, here is the length of time a game can last. The fun never gets boring, as when you’re feeling as if you’ve had enough, a whole entire new game can be started. Sucking the player into a unique experience in moments. A hamster wheel for humans, essentially.

June 19th, 2019 Epic Games, which run Fortnite and EA games affiliated with the game, came under massive scrutiny from the British Government. The meeting was named “Immersive and addictive technologies” by the Digital, Culture, Media and Sport Committee. One particular question was asked by Shaun Campbell, UK Country Manager, to Kerry Hopkins, VP of EA and Mathew Weissinger, Director of Marketing at Epic Games, regarding the spending limit on the game, after questioning about a £1600 transaction in one day by a minor on his uncle’s card. The question from Mr Campbell read, “do you have a spending cap for each day, week or month?” This was answered by Weissinger, “It depends on the game mode, but on a particular day, there are only ten items on offer from the store.” So, in theory, yes, there is a limit to how much in-game currency one can spend, but the purchase of in-game currency is not capped. The most significant amount of “V-Bucks” can buy 13,500 for $79.99, which can be done repeatedly. Although Kerry Hopkins stated that they would refund any purchases if the evidence was there, he also admitted that purchasers could take advantage of the system in place. A link to the full hearing can be found here.

EA may refer to the loot box systems as “surprise mechanics” and “no different to a Kinder Egg”, but when the Fifa Ultimate team breaks records for in-game purchases of player packs and is worth 800 million dollars annually, this statement seems utterly ridiculous. They know how to utilise the system, changing the name of loot boxes to “surprise mechanics” and continuously forcing it in players’ face. Comparing the mechanics involved in loot boxes and gaming to a Kinder egg is preposterous. The only similar thing is that you know that a small plastic useless toy will be attained from a Kinder egg. Usually one at a time, and it’s mainly for the chocolate anyway. Loot boxes can be opened continuously, most of the time with less than a 01% chance of winning anything of the highest rarity out of them. This makes the mechanic much more addictive. Some of these games are directed at a 3+ age range whilst disassociating the value of real money by turning it into FUT coins, V-Bucks or whatever else they want to re-name poker chips into the sense of spending actual currency is lost. Casinos at least have a legal obligation to keep minors away and an ethical obligation.

With certain people more susceptible to the marketing of microtransactions and loot boxes than others, how do the companies know-how and who to target?

“These players have considerable higher scores of problem gambling symptoms”

Recently the Gamble Aware funded research project found strong evidence to show just who. Many gamers were surveyed through a few different countries, with 14,000 of them being in the UK. From the study, “For example, around 5% of loot box purchasers in our dataset generate around half of the industry revenue from loot boxes. Similarly, around a third of revenue is derived from the 2% of purchasers. Moreover, these players have considerable higher scores of problem gambling symptoms.” This research proved that it’s easy to conclude that companies such as EA games know what they’re doing when it comes to manipulative sales techniques to target vulnerable individuals.

“almost half my salary goes toward Fifa Ultimate Teams packs”

One gamer, Dan Ayres, claims that “almost half my salary goes towards Fifa Ultimate Team packs a month, and to be honest, it doesn’t make me happy; in fact, it does the opposite. I’ve had three relationships break down because of my gaming habits now.” When asked if the habit was an addiction, he stated, “oh yea, when I’m not playing, I’m thinking about it, or on the FUT app on my phone where you can still spend money whilst I’m at work. I’m obsessed, and so are my group of mates. We all want to have the best team; it’s almost like it’s just for bragging rights sometimes. This relates to an area in the study labelled “motivations for purchase”. Some of these include “gaining status and approval” and “fear of missing out, (FoMO)”. With Dan, this seems like the case, “we’ve got a WhatsApp chat which is going off at all hours, someone puts in a rare card that they’ve just got out of a specific pack, and it just makes you want it you know! Sometimes I’ll get up in the middle of the night and play if one of my mates puts something in the group chat.” Clearly, for this gamer, the FoMO characteristic of the target audience for gamers is true.

“I’ve had three relationships break down because of my gaming habits now”

For one to be spending half their salary a month on one firm of games, you would think that they would be in a high pay bracket to stay financially afloat. Correlating with Dr Casey’s study, most gamers spending this money are “not wealthy gamers”. In Mr Ayres case, he fits the category, “I mean, I’ve got a stable job and a roof over my head which I can easily pay the mortgage for as it was passed onto me, but anything that I could or should be saving, is going on Fifa packs. To be honest, I don’t even realise how much I’m spending because you spend a fiver her, three quid there, but when you’ve done that a few times a day through the month, it quickly adds up. And you know the worst thing, come September, a new game out, and I’ve got to start it all over again when the new game gets released.”

“When I’m not playing, I’m thinking about it”

Luckily for Dan, he can keep himself stable, but it’s a different story for many others. Continuously, there have been stories of parents going to press to complain about how much their child has spent online gaming, but there are parental controls available, so why are adults not learning this by now? Do games need to show a parental guidance age certification if there are microtransactions involved? Should parents be appropriately educated on how far video games have come in the last fifteen years?

With the possible introduction of cryptocurrencies in gaming coming soon, questions like this need to be addressed by the game’s companies. With the rise of cryptocurrency popularity in age groups of the same target audience as video games companies, this would be an alliance that could be profitable. Adding real-life currency into games will change its dynamic completely, making it a much more competitive place to be. Maybe steven Spielberg’s Ready Player One movie was not so far from the truth of the future. With rumours circulating in early June that the next Grand Theft Auto Game could use cryptocurrency as the in-game currency, this could become a reality very soon, depending on the authenticity of the circulating rumours. Find a TechRadar story on this through this link. If this comes into existence, the rise of people addicted to video games will increase dramatically. Being able to gain an income through solely playing video games, not content creation like many do now. For the time being, we can’t see if it’s for the better or worse. Then if you’re able to earn a living through it, is it an addiction or a job?

Countries like Belgium have taken strict actions against the loot box system, or “surprise mechanics”, as EA put it, by banning them entirely from platforms as they are “in violation of gambling legislation”. The Netherlands has banned loot boxes that are sold through monetary value. China has also taken a stance to make it obligatory to have the chance rate of obtaining certain items through the system. But if an adult with their own free will wants to commit time and money into something, whether it be positive or negative to themselves, then why shouldn’t they? Free will is something that should not be taken for granted. If you start to take that off people by putting spending caps into games and banning specific mechanics, a mass of the target audience could boycott gaming in general. This is something that significant games companies can predict, but it would work both ways. A happy medium will need to be found so the companies can still gain income but making the games fair and playable for everyone, no matter the financial background of the player.

In the foreseeable future changes will be made to loot boxes and microtransactions in the UK just as other countries have. If one country such as Belgium have banned these for breaching gambling laws in the country, then the proof should be there for all to see, leading the way for other countries to follow suit. The recent study finishes off with a section titled “6. conclusions and recommendations” where after analysing the research found have subtitled sections of possible solutions the government and games companies can take. These list of as “precise definitions, game labelling and age restrictions, odds disclosure, spending limits and information, real currency, money’s worth definitions, gatekeeper obligations, provisions for oversight and enforcement, provisions for research and educations.” Clearly the British government have the foundations here to think of a logical solution to move forward on this issue before the problem worsens. If Belgium are correct and these loot boxes breach their gambling laws, then children are being welcomed into gambling without their knowledge and could lead to horrible effects on the future of many individuals.

For all that it’s worth, video games companies are businesses with their main aim is to be profitable. No one is arguing that, but morals and ethics must be considered when the target audience for some of your biggest incomes are children in a huge age range. When the CEO’s of major games companies can’t see any wrongdoing when a list of countries is reviewing the way in which they do things then people need to be held accountable. Whether that will happen under UK legislation is yet to come but it’s certainly been in question for a few years now. The evidence is starting to stack up, but if many more years go by without a change the damage will have already been done.