The Major Responses So Far Into The Senate Loot Box Inquiry

The Senate inquiry into loot boxes isn't due to report back until mid-September. Ahead of their deliberations, members of industry, academia and the public have made submissions to the panel. Here's what they had to say.

Note that some submissions below are abridged for brevity. I've also bolded segments of particular interest.

QLD's Attorney-General and Minister for Justice, Hon. Yvette D'Ath

QLD Attorney-General and Minister for Justice Hon. Yvette D'Ath, pictured far right. Image: myPolice Ipswich

As Attorney-General and Minister responsible for the regulation of gambling in Queensland, I am well aware of the recent community debate around video game features that resemble gambling. Generally, these features are offered through microtransactions that are a side-element to the actual game. Micro-transactions of this nature may take many forms.

Chiefly relevant to the Committee's inquiry are micro-transactions that involve the purchase of a virtual container, generally referred to as a loot box, containing an item that is unidentifiable at the purchase point (alternately, the game may present the player with a loot box but require the purchase of a key to open it). The purchase may require real money (via a credit card transaction) or credits accumulated by achievements within the game, or a combination of both. Where loot boxes are accessed via the use of accumulated in-game credits, the player may be given the option of purchasing extra credits with real money in order to speed up the availability of loot boxes to the player.

In most cases, the virtual items obtained from loot boxes have no effect on gameplay and are purely cosmetic. For example, the item may be an article of clothing or a "skin" that alters the player's appearance, or the appearance of a weapon or vehicle, within the game. However, despite their generally cosmetic nature, these items can change the way the player is perceived by other players within the game, therefore adding to the player's prestige and status and creating something of value to the player.

In this regard, the potential association between loot boxes and gambling arises because the player is spending money to obtain what is essentially a prize chosen at random. While the mechanics of the particular game may provide that a prize will be awarded each time a loot box is opened, the digital item representing the prize may vary widely in its value to the player, regardless of whether that value can be realised in a real monetary sense.

I am also aware of a concern that the loot box features of some games may be designed around compulsion, and may therefore lead to harms similar to those experienced by some gamblers, especially in unregulated environments (for example, an inability to control or track expenditure). Players may, for example, be driven by compulsion to overspend (or spend more time playing games than they otherwise would) in pursuit of a particular chance-based item that would increase their in-game prestige'. Accordingly, there is significant concern that some loot box facilities featuring chance-based items may normalise gambling behaviours, particularly in children, regardless of whether loot boxes are earned in-game or paid for with real money.

I note the issue driving loot boxes to national attention was the decision of American developer Electronic Arts (EA) to make non-cosmetic items (that is, items that could affect the· outcome of a game) available to players through purchasable loot boxes within the game Star Wars: Battlefront II. This "pay to win" approach outraged the gaming community, which successfully influenced EA towards a solution in which paid loot boxes no longer form part of the game.

I am also aware of concerns regarding the use of loot boxes within the game Fortnite, which arose as a result of the unprecedented popularity of that game, particularly with people under 18. However, I am advised that Fortnite's developer has also responded to community criticism by removing the random element from loot boxes available within that game.

However, it cannot be assumed that similar market-led corrections will be adopted by all developers, or that more insidious uses of gaming micro-transactions that resemble gambling will not emerge in the future. Game developers are, after all, increasingly reliant on the use of micro-transactions to monetise gameplay and thus fund both the initial development of the game and the development of additional downloadable content to keep the game fresh and exciting.

I will therefore be monitoring the Committee's inquiry with significant interest, as I expect that the inquiry's outcomes, and the Australian Government's response, will assist in my own ongoing consideration of the extent to which loot boxes may represent gambling, and of any remedial responsive action that might necessarily be undertaken to protect young Queenslanders from potential gambling-related or gambling-like harm.

However, I am aware that some features of online multiplayer gaming may make the regulation of loot boxes at the state level impractical. For example, many game developers, including the developers of games at the centre of recent loot box controversies, are based overseas and have global markets. I am advised that games may be purchased, patched and played via digital distribution platforms located on servers outside the jurisdiction in which the player resides.

Additionally, from an Australian perspective, multiplayer games, including those games involved in recent loot box controversies, are generally played on Oceanic servers that combine players from multiple Australian jurisdictions (and the wider oceanic region) in a single game. In addition to the significant regulatory difficulty suggested by these cross-border scenarios, I understand that players desire fairness and equality in all aspects of the game, and would likely object strenuously to state-based legislation that potentially made a loot box facility available to some of the players in a game but not to others even if chance-based items are purely cosmetic.

Accordingly, the Committee may wish to consider whether the Australian Government may be well placed to address the issue through amendments to the Interactive Gambling Act 2001 (Cth). This is due to the online and cross-jurisdictional nature of video gaming, as discussed above, and the national application of that Act. The approach would appropriately reflect the Commonwealth's responsibility for online gambling and ensure consistent implementation of any relevant intervention across all Australian jurisdictions.

I also note that the Australian Government has legislative responsibility for the classification of publications, films and computer games through the Classification (Publications, Films and Computer Games) Act 1995 (Cth). The Committee might therefore consider whether there is value in introducing an "R18+" rating for games with loot box facilities that resemble gambling. This would ensure that such games are categorised for an adult market in line with current restrictions on the age for gambling participation.

I thank the Committee for its consideration of this issue and await the Committee's report with interest.

The Institute of Games

Image: Institute of Games Website

Gambling is defined in the Victorian Gambling Regulation Act 2003 as an activity which includes all of the following:

  • a prize of money or something else of value is offered or can be won;
  • a person pays or stakes money or some other valuable consideration to participate; and
  • the outcome involves, or is presented as involving, an element of chance.

An activity is defined as 'gambling' if it involves an element of chance. This applies even if the outcome of the activity may be influenced by a person's skill. As outlined in Drummond and Sauer’s study: ‘Video game loot boxes are psychologically akin to gambling’ there are video games that offer lootboxes. Lootboxes are digital containers that contain random rewards.

A lootbox constitutes a form of gambling if both of the following conditions are met:

- An amount (usually between $0.99 and $2.99) must be paid to obtain or open the lootboxes. Once opened one or more virtual items are received by the player. The value of these virtual items ranges between $0 and thousands of dollars.
- An online marketplace is available to the player on which the virtual goods can be traded, sold or gambled with; regardless of whether this is within the game or on a standalone website separate to the game

When these conditions are met, the virtual goods obtained through the lootbox mechanism hold a real money value. By using a lootbox the player pays money for an uncertain outcome involving an element of chance and has the ability to cash in their winnings.

...

Is the current consumer protection and regulatory framework for in-game micro transactions for chance-based items adequate, including international comparisons, age requirements and disclosure of odds.

The Institute of Games polled 300 parents on their awareness of the links between gambling and video games.

  • Only 5 parents were aware of the existence of lootboxes.
  • 100% of parents reported they wanted to see more resources to raise awareness about the links between gaming and gambling - 100% of parents reported they wanted to see more education to their children about the risks of gaming and how to deal with these risks.

The Institute of Games has ongoing conversations with Teachers, Social Workers and other professionals that support children and young people. An overwhelming majority are almost completely unaware of the links between gaming and gambling. The Institute of Games has ongoing conversations with gamers and has studied online forum conversations between gamers on platforms like Reddit. The majority of gamers question the morality of offering chance based items for purchase. This information leads us to believe that community sentiment is right to improve the consumer protection and regulatory framework.

The Institute of Games recommends to improve the consumer protection and regulatory framework by:

  • developing an ethical framework for the video game industry to ensure children’s rights are upheld and child safety standards are applied in online environments;
  • delivering prevention resources and workshops for parents and children;
  • amending the classification system to include clearer information about gambling in the game;
  • regulating chance based microtransactions as described above under gambling regulation.

Alex Knoop, LLB

Loot crates are simply one form of many revenue streams available to developers in their quest to keep consumers engaged with their product. They are choosing to pursue the loot crate revenue stream because it is currently the most lucrative option available.

Loot crates utilise the same psychological principles as slot machines in the form of ‘hook loop’ mechanics and these have been described by psychologists as creating some of the most powerful addictive effects. These mechanics are deliberately added to games in order to exploit people’s psychological vulnerabilities for consumer retention and profit.

Based on survey data it was established that most Australian children and well over half of Australian adults are ‘gamers’, which raises concerns about their exposure levels to these harmful mechanics. In particular, a key concern is that it could lead to problem gambling, or normalise gambling behaviours.

Unfortunately, there is already evidence surfacing of problem gaming behaviours in both children and adults. Even worse was that most of the popular game titles analysed had some form of these mechanics present in a way which is considered a medium to high risk of being predatory and thus likely to cause harm.

Australian agencies have the frameworks in place to easily address these issues under existing consumer protection law, the National Classification System and gambling legislation, however loot crates are falling just outside of the scope of all of these areas of law.

For consumer law it is difficult to prove if there is misleading or deceptive conduct occurring due to the lack of information about the drop rates of loot boxes. In classification legislation, gambling is not a key consideration requirement, and as such does not get closely analysed by the classification board, and gambling legislation struggles to link loot crates to the current definitions of gambling.

Internationally, some countries have banned loot crates outright such as Japan, Belgium and the Netherlands. Other have opted to attempt to regulate them with limited success such as China which made their sale illegal and odds disclosure mandatory. This has had limited success with developers quickly responding by slightly re-writing their loot crate mechanics to once again sit just outside the scope of the law by offering loot crates for free with virtual currency purchases, and thus exploiting loopholes in the legislation.

Several international rating agencies and gambling boards have said that loot crates do not fit the definition of gambling because the items do not hold real-world value. The fact that developers do not expressly allow the items to be converted to real-world money through their game reinforces this, despite conversion occurring through third party websites.

This ignores the fact that there is a causational link that has been established which shows that where developers allow microtransactions for loot crates, and the trading of those loot crate items between players, this gives rise to grey markets and middle-men which exploit the operation of these systems.

Based on all of this information I am of the conclusion that loot crates are gambling and are causing harm to the Australian public. I believe that the most effective means of addressing the issue is to bring loot crates within the definition of ‘gambling’ through strategic amendments to key legislation. Further, combine those amendments with new legislated requirements that all odds be disclosed, extra addictive elements (bright lights, colours, sounds etc.) be removed, and safety controls be put in place on the number of crates that can be opened in a period of time.

Lastly, amend key legislation to ensure that these mechanics are specifically analysed by the Classification Board and where found to be present, carry a mandatory R18+ classification. These strategic amendments are cheaply and easily implemented and will address most of the issues raised. It also protects the balance of protecting minors and allowing adults to partake in these activities under a regulated system, rather than outright prohibition.

Dr Kym Jenkins, President of The Royal Australian & New Zealand College of Psychiatrists

Addictions, including problem gambling, are widely recognised as health issues. Pathological gambling was first included as a disorder in the International Classification of Diseases (ICD) in 1977 and is included in the ICD-11 under disorders due to substance use or addictive behaviours. The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) also included gambling disorder as a new category on behavioural addictions, reflecting research to suggest that gambling disorder is similar to substance-related disorders in clinical expression, brain origin, comorbidity, physiology and treatment.

Addictions are also associated with significant morbidity and mortality across both physical and mental health dimensions. Approximately 90% of people diagnosed with problem gambling have at least one other mental health diagnosis and approximately 30% have three or more diagnoses. Psychiatrists have an important role in identifying and diagnosing problem gambling, as well as any other underlying, comorbid mental illness. In some instances these will be a consequence of the gambling behaviour and will improve when gambling is controlled or ceased.

In other cases, gambling may be a way of managing preexisting mental health issues. For instance, research suggests that mood and anxiety disorders may often precede gambling problems for some people, but others may develop depression as a result of the financial and relationship stress arising from gambling.

While further research is required to ascertain whether micro-transactions for chance-based items constitute gambling from a medical perspective, there are a number of similarities which are concerning. It should also be noted from the outset that children and adolescents are likely to be exposed to the risks associated with micro-transactions, considering their increasing presence in a wide range of online and mobile games that appeal to younger audiences. Considering the developmental vulnerabilities of younger people, the following factors may therefore be all the more concerning.

Firstly, the variable ratio reinforcement schedule which underpins many gambling models similarly underpins the model of chance-based items. This involves a reward structure wherein users do not know how many purchases are required to obtain the item sought, leading to the rapid acquisition of repeated behaviours in the search of a reward (Drummond and Sauer, 2018). Concurrent with these behaviours are the adaptation of neural dopamine pathways which further encourage these behaviours (Murch and Clarke, 2015).

While most people who engage in gambling activities with a variable ratio reinforcement schedule do not develop problem gambling, many do, and these are likely to be people with pre-existing vulnerabilities. This risk is likely to be similar with games which involve micro-transactions for chance-based items, as both are based on a similar reinforcement schedule.

Secondly, micro-transactions can reinforce and perpetuate continued play thus sustaining ongoing spending by way of 'entrapment'; that is, when an individual believes that they have invested too much to quit (King and Delfabbro, 2018). This is similar to 'chasing losses' in traditional gambling and people who engage in micro-transactions often report their primary motivation as a desire to extend play, as well as an aim to chase lost credits and to speed up play (Kim, Holling$head and Wohl, 2017). The risk of 'entrapment' occurring may even be more likely with micro-transactions as the virtual nature of the transactions may be such that costs do not appear as immediate or salient as in traditional gambling (King and Delfabbro, 2018).

Thirdly, some of the mechanisms used in electronic gaming machines (EGMs) are being increasingly used in games which involve micro-transactions for chance-based items. Like EGMs, micro-transactions often encompass rapid playing speeds combined with rapid (or in the case of micro-transactions, immediate) payouts, the potential to quickly and easily multiply bets/transactions, and audiovisual effects to enhance the gambling experience. Although further research is required to gauge the level at which these properties may encourage addictive behaviours in micro-transactions, there is some evidence to suggest that these properties may be associated with addictive behaviours in EGMs (Gambling Research Australia, 2014).

Fourthly, the ease with which gaming platforms utilising micro-transaction business models can be accessed bears similarities with the rise of interactive and online forms of gambling. New gamblers are more easily recruited online, especially young people who are highly involved in web-based activities and who already have particular vulnerabilities with regard to problem gambling. In addition, online gambling sites are accessible 24 hours a day and do not require the person to leave their home. Mobile and internet games which involve microtransactions for chance-based items carry many of these same risks.

Finally, it is important to note that gaming disorder has recently been recognised in the ICD11. Individuals with gaming disorder are likely to be vulnerable to associated behavioural addictions including problem gambling with potential overlap between gambling and gaming disorders. As such, people with gaming and/or gambling disorder may be particularly vulnerable to developing addictive behaviours towards micro-transactions involving chance-based items available within the games they play. This is particularly, though not exclusively, so when those rewards are important for gameplay, especially when the importance of those rewards render the game 'pay-to-win'.

The RANZCP recognises that there may be significant jurisdictional issues with regulating games which offer chance-based items. As such, the RANZCP would defer to relevant legal experts in determining the most appropriate regulatory framework for in-game microtransactions for chance-based items. However, further information about the RANZCP's views with regard to regulating more traditional gambling products may be found in our recently updated Position Statement 45: Problem gambling.

Interactive Games & Entertainment Association

Loot boxes are simply one form of optional micro-transaction that will always provide players with in-game items. They are not necessary or required to enjoy, progress in or complete a video game.

• Loot boxes do not constitute a form of gambling under current Australian law. Virtual items obtained in loot boxes are not money or considered “other consideration of value” because they are only useable in-game and can’t be cashed-out or exchanged for real-world money. They do not have value outside of the video game in the real-world.

Video game publishers, developers and platforms typically do not allow loot boxes, virtual items or game points to be traded, exchanged, sold or gambled on external websites and services. Secondary markets that attempt to allow players to sell and gamble their virtual items are entirely unauthorised and potentially illegal external operations that are not involved with, or approved by, game publishers, developers or platforms. Where a party, other than the video game publisher, developer or platform, offers a mechanism to “cash out”, purchase or gamble virtual items, they are also likely acting in violation of Terms of Service and End-User License Agreements. Accordingly, game companies actively try to prevent these practices. If external websites and services are operating in such a manner without the authority of the game publisher, developer or platform, the legal responsibility to comply with Australian legislation, including gambling legislation, falls solely on the external websites and services.

Loot boxes utilise the same “surprise and delight” mechanics that trading cards, Kinder Surprises and many other consumer products have been using for years. All these products, including loot boxes, are subject to a vast range of consumer protections and regulations and it would not be appropriate to impose a special regulation on the video game industry.

The video game industry takes its responsibility to its players, parents and guardians very seriously. As such, video game consoles and platforms provide parents and guardians with extensive and robust tools that they can use to ensure that children and younger users are not allowed to make any in-game purchases without obtaining approval first. These tools extend to the purchase of any game content and micro-transactions, including loot boxes.

Dr Marcus Carter, University of Sydney, former Digital Games Research Association

Games are extremely engaging, immersive and compelling. That the third [type] does not offer the opportunity to monetise the rewards does not mean they are not a predatory form of gambling. This is reflected by the Belgian Gaming Commission’s recent decision that lootboxes are a form of gambling, even if players can’t trade or sell the options they are rewarded, noting that:

“What is important is that players attach value to it and that this value is also emphasised by the game developers themselves” (p.10)

I note here that it may be the case that children – who do not place the same value on ‘real’ money as adults – are more vulnerable to the configuration of economically isolated rewards that have significant social and cultural value to players (such as being able to play with Cristiano Ronaldo in FIFA) or advantages in competitive games (such as in Angry Birds 2).

Many freemium games employ highly strategic, manipulative and predatory practices to ensure players attach maximum value to the chance-based rewards. In my own research into Candy Crush Saga4, I found that the pressure from social competition was very persuasive in getting players to pay money to remain competitive against their friends. ‘Loot-boxes’ similarly employ similar persuasive and manipulative mechanics to encourage players to make micro-transactions. The recent controversy around Star Wars: Battlefront II was exacerbated by the way rewards gave in-game advantage, a very persuasive configuration in a competitive game.

I note here that the focus of the inquiry on or as gambling may give the impression that ‘lootboxes’ are configured like traditional gambling games, which have fixed (consistent) odds and rewards that are knowable. This is potentially not the case with loot-boxes, which do not disclose the odds. It is possible that some loot-boxes are configured with variable odds, which change based on factors such as player profile (e.g. less likely to reward wealthier players) or behaviour (e.g. more likely to reward players the more they spend). This latter example of predatory and manipulative practice exploits the ‘Gamblers Fallacy’ - “the expectation that the probability of winning increases with the length of an ongoing run of losses”.

In their recent article, Rune Nielsen and Pawel Grabarczyk note several other characteristics of gambling that are likely to be manipulated by the way that loot-boxes are configured. For example, players of ‘Marvel Strike Force’ recently identified that different players of the game are given different odds in the game’s chance-based micro-transactions. This is easily implemented when reward cannot be traded for real-money, potentially making them more harmful than rewards that can subsequently be traded for money.

It is very likely that many large freemium games, which can draw millions of dollars a day in revenue, employ similar strategies to maximise their income. This is almost impossible for research to investigate, as such practices are kept strictly confidential. The potential impact of this on player’s attitudes towards real-world gambling are also potentially problematic, and may be contributing to the explosive growth of problem gambling in 18-25 year old Australian men.

Compounding these manipulative practices is the pervasive and everyday nature of mobile game play, where the majority of revenue comes from in-app purchases. Players are heavily incentivised to permit mobile games to send them push notifications, for example to remind them when they can play again. These appear like text messages on a players’ phone. Some games send push-notifications about limited-time offers, such as a discount on purchasing ingame currency, or for a free ‘loot-box’ for logging in every day.

Large companies likely spend considerable resources on identifying the most effective way to send these messages to encourage players to engage in in-app purchases, many of which (as discussed) heavily resemble gambling. For some players (many of whom are children), this would be like having slot machine in your pocket that actively encourages you to gamble at your most vulnerable moment. The senate inquiry should therefore also consider broadening its scope to consider non-gambling, but still predatory, monetisation strategies in mobile games.

Esports Games Association Australia Ltd

EGAA interim CEO Mat Jessep (L), EGAA director Anna Lockwood (R). Image: Alex Walker (Kotaku)

The Esports Games Association Australia Limited ACN 624 508 845 (EGAA) is a newly incorporated body working with members from all stakeholders in the Australian esports industry on issues of mutual interest and importance. Our mission is to act for members to further professionalise and better self-regulate esports in Australia.

One key area of interest for our members is the approach to gambling on esports and any related impacts to integrity. In that regard, we have established a dedicated panel, the ‘EGAA Gambling and Integrity Panel’. This panel is headed up by our Board Member, David Harris and co-led by gambling and entertainment law expert, Julian Hoskins, and sports integrity expert, Iain Roy.

Broadly, the EGAA works closely with and supports the overall mission of the IGEA, with a specific example being the involvement of the EGAA Gambling and Integrity Panel's review of and minor assistance with the IGEA's submission to the Senate Committee in relation to its inquiry (noted above). By way of submission, the EGAA is, in principle, supportive of the IGEA's submission. Further, we would be happy to work with and assist the IGEA on the provision of any further information in support of its submission, including attending any Senate hearing, so as to better assist your Committee in its inquiry.

Association of Heads of Independent Schools of Australia

The rapid evolution of the digital environment and online gaming, including online gambling, suggests that constant vigilance is required to ensure the risk of harm to children and young people is minimised and that information and education programs are fit for purpose.

It is AHISA’s view that the sheer scale of the potential for children to be exposed to online gambling, either through simulated gambling games or in-game gambling features such as loot boxes warrants ongoing review of federal online gambling legislation and regulation with a specific focus on children and young people.

With particular regard to chance-based micro-transactions in digital games, it is AHISA’s view that there is sufficient research evidence to indicate a substantial risk of harm and therefore a case for governments to consider strategies for protection and harm minimisation.

AHISA therefore recommends:

That the Australian Government makes a determination that chance-based microtransactions in digital games are a form of online gambling. As a consequence of this determination, the Government should consider whether existing legislation needs strengthening, or whether further industry regulation is required, such that game producers and distributors are to advise whether digital games include options for ingame purchases or simulated gambling play such as loot boxes.

That an advisory group to the federal Minister for Social Services be established to monitor developments relating to risk of harm to children and young people from online gambling, including from simulated games and in-game gambling, with a view to recommending national research projects, pinpointing new information of relevance to government-supported education programs and websites and suggesting amendments to existing legislation or other government regulatory measures such as industry use of product classifications and warnings when warranted.

Australian Institute of Family Studies

Note: The Institute of Family Studies is a statutory research agency within the federal Department of Social Services. This submission was filed by Rebecca Jenkinson, Megan Carroll and Julie Deblaquiere from the Australian Gambling Research Centre, which was established within the department in 2012 and produces research and publications centred on gambling and the gambling sector.

In weighing up these possibilities, and considering recent steps being taken in countries such as Belgium and the Netherlands, we recommend prohibiting micro-transactions for chance-based items in online games available in Australia. This will alleviate the public health risks and associated costs with further normalising gambling in the Australian community through the provision of these items in video games.

It is also possible that, for example, banning ‘loot boxes’, together with introducing alternatives such as the provision of in-game items through non-randomised mechanics, may provide many players with a preferable way of obtaining desired in-game items.

If ‘loot boxes’ were to be retained, harm minimisation measures could be considered but this would be a weaker option for preventing the potential for gambling harm. A suite of options could include:

• Games should be clearly labelled that gambling with real money is a game feature.

• Make it mandatory that players are provided with the odds of selecting each possible ingame item in an easily accessible and understandable way. The variable odds of achieving low value versus highly desired in-game items, and the cost in actual dollar terms of each ‘loot box’ item, should be clearly shown.

• Introduce tighter restrictions on micro-transactions for chance-based items, either through the gaming classification system or another regulatory mechanism. Restrict access to gambling aspects of video games for underage players, including through third-party sites.

• Consider introducing other harm reduction measures (such as gambling messaging and mandatory spending limits) similar to those applied to more traditional gambling activities.

• Conduct public education campaigns to better inform gamers, parents and the general public of the harms associated with micro-transactions, and gambling more generally, in online video games.


Comments

    I don't know if this has been discussed. Isn't lootbox effectively the same as blind box toys/trading card game packs you buy?

    Kid cereals that provide 1/3 stickers for you to collect. Kinder surprise chocolates. Many more examples of "lootbox"

    If the ban is to take place for lootbox, why are other form of similar item not banned?

    Last edited 31/07/18 2:12 pm

      Because some loot boxes also have the ability to trade those items on a secondary marketplace, and sometimes those items can be cashed out for real money. The implementation and effect of loot boxes in video games is also vastly different in some circumstances. That's the gist, anyway.

        Well, lootbox you spend real money for virtual items to sell back for real money.

        With trading cards, you spend real money for physical items to sell back for real money.

        The only difference is one being virtual item and one physical. The idea of lootbox pretty much come from trading cards booster packs, some loot box literally give you virtual "cards" as well.

        I feel the whole thing of treating lootbox in video games as gambling but ignoring everything else is a direct attack on video games in general because it is the easiest target.

          Not all loot boxes have a secondary market / allow you to sell the items back for real money, though.

            That is true but at the same time, that is when people start selling accounts. It is like going down the rabbit hole.

      Really depends where you draw the line. I've had this discussion multiple times. It's really hard to lock down the definition.

      First, you have random card packs in Magic... you know you're buying a random pack. That's all it is.

      Then you have a kinder surprise or cereal stickers... those are a "free" bonus in addition to the food. So that's different again. On one hand it's a collectible, on the other hand it you're mainly buying the chocolate. If you start talking about "compulsion to buy" then you really start talking about advertising.... which is a very different beast.

      Then you have paid games with paid lootboxes of the worst kind like battlefront 2.

      Then you have free loot boxes in paid games

      Then you have paid loot boxes in free games

      There's a whole bunch of other categories (especially if you split it down to cosmetic vs game affecting vs can be traded/sold)

      All of those factors affect the value, cost and complusion of random boxes.

      Then you can talk about random loot tables/drops from killing an online boss, like in WoW or Diablo.... While not directly linked to money, you're still gambling with your time and there's a compulsion to keep playing and "do one more run".

      Then you start getting into literally anything "random" that happens in games and it just becomes an absolute mess.

      The other issue is enforcement. If you really wanted to you could pretty easily restrict sales of a physical product to 18+ like adult entertainment, alcohol, cigarettes etc....
      That's much harder for digital content. Especially when state level (and even federal level) don't have much power on overseas developers.

      All that's likely to happen is a game would get banned here or at least rated R.
      Then we likely wouldn't get local servers and people would stop playing. It's really a lose/lose for everyone then.

        But that is we are categorising lootbox differently. But fundamentally, regardless if paid lootbox in paid game, free lootbox in paid game, paid lootbox in free game, it is the same lootbox with same idea of random items coming out from the box.

        WIth a booster pack of Magic, you are buying a plastic pack(lootbox) with random cards from the pack.

        By the definition of how they classify lootbox as gambling, the same can be done with anything that deal with probability and involving minors. I believe their entire point is to curb "gambling" addiction from minors because only minors play video games.

        I feel there is a very clear prejudice here against video games in general, rather than trying to solve this issue as a whole but using video game as a target in this very "recent" issue. Villianising video games as they see fit as a medium to push blames on. So far we have violence caused by video games, shooting caused by video games, mental disorder caused by video games, video game addiction as mental illness now gambling caused by video games.

        Too many blames just because video games are easy target and not other kind of entertaiment medium.

          I feel there is a very clear prejudice here against video games in general
          we're not seeing kids camping at EB games buying pokemon booster packs every 5 minutes trying to get a shiny, we're not seeing Wizards of the Coast selling booster packs for Magickbucks and continually advertising to the kids playing the game that they can easily just get one more booster pack.

          The mechanics of a booster pack and a loot box might be very very similar, or even exactly the same on paper. but the real world experience and their effects are noticeably different.

          maybe the outcome of the law change will mean booster packs require parental permission? I hope actually think that would be a fair outcome.

            we're not seeing kids camping at EB games buying pokemon booster packs every 5 minutes trying to get a shiny, we're not seeing Wizards of the Coast selling booster packs for Magickbucks and continually advertising to the kids playing the game that they can easily just get one more booster pack.

            Are we talking about fortnite or lootbox?

            Let's be clear here, what I am saying is buying a lootbox is the same as buying a booster pack. You get random items hoping for rare item/card and those item/card worth real money depending on the rarity of the item.

            Your point in saying it is harder for kids to get booster pack due to them having to go to stores that sells them is more effort than buying a lootbox directly while playing game is valid. Accessibility is a definitely a valid point.

            But what I am trying to say is they are both the same thing, kids will not stop at buying 1 booster pack, they want more because they want more rare cards. That same behavior applies to them buying lootboxes, they want more because they want more rare items. They are the same item that causes the same cause and effect once you purchase them. But because video game is so general and widely known, it became a target.

            But I understand virtual and physical has a big difference. It is so much easier for kids to steal their parents' credit card and buy lootboxes compare to stealing money to buy trading cards but that should be a different issue altogether.

              Are we talking about fortnite or lootbox? neither specifically

              But what I am trying to say is they are both the same thing
              But I understand virtual and physical has a big difference

              so.. we agree?

                If you agree they are the same thing then yes we agree. Lol.

                  But I understand virtual and physical has a big difference

                  But you don't agree that they are the same thing.

                  @ecxx

                  We agree the item itself is the same thing, accessibility is a different story.

              But what I am trying to say is they are both the same thing, kids will not stop at buying 1 booster pack, they want more because they want more rare cards. That same behavior applies to them buying lootboxes, they want more because they want more rare items.

              Yes, but there's still a lot different between buying and opening a pack of playing cards vs a lootbox.

              Buying the playing cards - artwork of a character or two on the wrapper.
              Buying the loot boxes - Shown all the different items in the box, so you know exactly what super-cool stuff you can in.

              Opening the playing cards - You open the wrapper, get that smell of fresh ink and look at your cards.
              Opening the loot box - Sounds! Lights! Dramatic visual effects! All the shiny and wow! You know, all the exact same psychological-targeted effects that slot/poker machines use to get people excited to open them.

              The difference is the presentation. I can tell you right now, if you were opening Kinder Surprises and fireworks went off whenever you opened the capture, there'd be a lot more of them sold.

                You do know gambling is not slot machine only right? Playing poker or roulette in the casino does not give you all the fireworks and bang when you win the money. Heck no one cares when you win money on the table except yourself.

                With or without the visual effects, lootbox will still sell.

            Have you been to a MTG store on release? I've seen many people buying whole boxes, cases even of cards so they can get 4 of the card they're looking for. I've seen people at the counter buying a handful of packs at a time, then buying more when they don't get what they need. There's also the case where MTG is a video game with exactly the same booster pack mechanics. There's really not difference between physical and digital card packs, so why do loot "boxes" get special attention?

              Because card packs don't get UIs that look like slot machines/pokies/wheel of fortune etc. They also generally come with some known factors - each pack contains 1 rare, 2 semi-rare and 3 general cards, or whatever, and percentages based on that. And, the big one, you can't just attach a paypal account or credit card to one's member card at EB Games and just keep clicking a button to keep buying packs until you get the gold foil paladin mage. There are limiting factors in play that don't exist in non-physical media unless explicitly put there - cash, number of packs in stock, buying limits (in states that have them).

              With Kinder Surprise and whatnot, those same limits exist. With cereal packs and whatever, most of those are now simply coupons that one has to exchange and pay money for - you collect X coupons and you send them in with postage kind of thing, same as the stickers etc from the paper. However, because they come with a purchase of something else, they fit more with advertising and marketing practices than they do gambling - they're essentially promotional items, and while people may make purchases to acquire them, sell them on Gumtree for a zillion bucks (like the first round of those Woolworths animal books), or whatever, they're not the same thing in that the pack is the item purchased blind as to what's in them, with the same unlimited and deceptive capacity. While, yeah, perhaps those businesses should be made to take a look at their CSR, it's not as identical as people have been making it out to be.

                Most loot box vendors list basic odds, eg. "one guaranteed rare, one guaranteed uncommon or rare", so that's hardly an example of where physical CCGs differ from loot boxes.

                None of the limitations you list in physical media actually exist, except for stock availability. Cash isn't a barrier when you can buy with a debit/credit card, and no states have buying limits for CCGs that I'm aware of. Stock availability is only an issue at the highest levels, every large game store buys tons of stock when (for example) new MTG sets come out because they don't expire and there's always demand.

                I've sat in a games store and watched a guy chain-buy boosters one after the other on his debit card, open them right there, not find what he was after and buy another. It was absolutely as easy as 'just clicking a button', all he had to do was tap his card on the terminal. People also buy full cases of boosters all the time, hunting for cards they want. There's not nearly as much difference in behaviour between the two as you're implying.

              I genuinely doubt you've seen people buy a case while looking for 4 specific cards.

              Suggesting that ccgs are the same as in-game loot boxes is facetious and disingenuous whataboutism. If you're too personally invested to the point where you're unable to see the difference, I'd suggest you take a step back and ask why you're so vehement about deflecting attention away from something genuinely detrimental. It's well known that big games publishers have sought guidance from the same groups that advise casinos on how to entice people to spend money without thinking it through.

                4 of the same card - Voice of resurgence from Dragons Maze. A set full of awful cards. Couple of dudes with more expendable money than sense. Happens more often than what you'd think. I'm not completely for or against "loot boxes" and "booster packs". I just don't like that even though two things can operate exactly the same (eg MTG physical vs digital) that the digital version should be unfairly banned or regulated in oblivion. There's also the risk that the categorisation is way too broad and things like random free rewards or random loot drops from bosses get banned.

                First, troutmonkey is correct. I played MTG for years and was a tournament judge for years. People absolutely do buy full cases just to get particular cards, it's quite common.

                The suggestion that CCGs are the same as in-game loot boxes is apt because that's exactly what they were modelled after. The essential mechanics of both are the same. It's not disingenuous and it's not whataboutism, it's drawing attention to an activity that is considered perfectly acceptable but will likely be caught up in any attempt to expand the definition of gambling to include loot boxes.

                This isn't about deflecting attention, troutmonkey never even said what they think about access to loot boxes. Most people agree some kind of regulation is needed, but some of us are arguing that that regulation should be tailored to the problem. Squeezing loot boxes into gambling regulations is a brute force 'smash everything' solution that absolutely will catch unintended things in its net, such as CCG games, which is why it gets brought up regularly in these discussions.

                What some of us (myself included) want is a tailored set of regulations to deal specifically with this issue, that addresses only the problem and has no unintended side effects. That's hardly an unreasonable position to hold.

        An important factor to keep in mind is that not all risk-based or chance-based activities are gambling. The obvious example from your reply is random loot from a boss in a subscription MMO, which relies on a tenuous link between 'time is money' and 'random reward'.

        This exposes the inherent risk in some of the more black-and-white submissions being made, which appear to have not considered the broader reaching effects increasing the scope of 'gambling' would have. Simply coming up with some criteria that defines loot boxes as gambling will inevitably catch things that are widely regarded as 'not gambling' by society in its net. This is why I keep insisting in articles like this that pushing loot boxes into gambling is a brute force 'square peg into round hole' solution that will assuredly cause collateral damage, and that a much better one is to develop separate regulations to govern loot boxes specifically.

      Because you don't need to slap down 80 bucks to 'buy' playing Magic.

        Do you know how much an average Magic player spent buying packs?

          Yes, but they can also trade and sell cards they don't want. You can't sell a Mercy skin you don't want.

            And because they can trade and sell cards that magic players don't have to slap down $80....?

      Great Letrico. Please, continue to justify, quite literally, the worst thing in our community. I honestly don't know where to start.

      Physical cards are a niche. The video game industry is bigger than Hollywood.

      Games can hook you in all sorts of insidious ways. They are free-to-play (first hit is free, kids), but start hitting you up for money further in.

      They can do all sorts of nonsense to compel you to spend money. From sounds, graphic design, rewards of increased power.

      They are available instantly, any time you want. You don't have to visit the store, or buy online and wait for delivery.

      We've all been through this argument a million times. Look through one of the thousands of posts covering this topic.

        Not justifying. I believe in equality more that if lootbox is getting banned, so does others that is the same.

        Whether lootbox is destroying video games, we know it does and publishers finally got the backlash from the market but that is another story.

        Now back to the "gambling" element, it is different story. You can replace lootbox with anything else, it will still have the gambling element. Whether in virtual form or physical form, whether it has marketplace to sell the items or not, the gambling element to buying a mystery box item will be there. Lootbox, trading card packs, blind box figures, gachapon, there will be more examples.

        My point is it does not matter if it is physical or virtual, it is the same, gambling element is there. Just because video game is more acceptable to public and easy target makes it a scapegoat again.

          My point is it does not matter if it is physical or virtual, it is the same, gambling element is there.

          That's like arguing that nerf guns should be illegal because the ones that fire bullets are illegal.

          "It doesn't matter, the projectile-firing element is there."

            Let's not steer away from the topic at hand, not to mention the terrible example you have given.

            We are talking about promoting gambling behavior with lootbox aka blind packaging item that gives you random common to rare item.

            So you are telling me, buying hearthstone card packs are different than lootbox and that is different than physical trading card packs?

    So the general consensus so far seems to be that everyone except the companies making money off of it consider it gambling, and the companies making money off it shoot their own argument in the foot by acknowledging that outside sites trade the items, implying that despite their own argument and attempts to shut down the market, these items do have an extrinsic value beyond what the game assigns them, and that this value can be represented through a monetary value. By this logic, their conclusion that loot boxes are not gambling is not coherent with the points they raise in their argument.

    Last edited 31/07/18 4:43 pm

      Intrinsic value is exactly what these items don't have. External markets are an example of extrinsic value, which necessarily can be applied to anything capable of being traded.

      I don't believe any consensus is on display in this small sample of submissions, either. Four of the nine submissions advance the notion that it is gambling, two say it isn't, two say it should be separately regulated, and one says it's gambling if contents can be traded.

    If Australia moves to ban loot boxes and micro-transactions are we to expect the big development houses, with worldwide reach, to alter their games for the purpose of selling in a single market? Developers would need to essentially be required by law to create two versions of the same game, one with micro-transactions and one without. Like a lot of DLC, will it restrict who Australian players can play online with and/or will we be limited to what we can unlock or use in the game? Politicians will need to seriously consider the wider ramifications if a ban of this nature is to go ahead.

      Nintendo is doing that. So far I have seen couple of games that they have microtransaction have a big bundle that literally makes it play like a full game without further need of purchase.

        While not relevant to this discussion, I absolutely love this method of monetization. You keep the microtransactions, but once you cross a specific payment threshold (usually the cost of a full-price game) everything is unlocked and there's nothing to buy any more.
        For the "whales" susceptible to forking out their life savings in microtransactions, there's a hard limit. And for those who would normally not spend because they know it's futile, if they can see a hard limit they might be inclined to dip in.

          Yeap. Knowing there is a hard limit to unlock everything and the price is at acceptable range, I would go for it.

          For games with unlimited microtransaction, I usually stay away.

      Could be easily handled by ratings. Gambling is not banned in Australia, we just prevent children from doing it.

        Although at least one submission calls for a complete prohibition of chance-based microtransactions, so who knows where the government ends up deciding to take this.

      Reread the article and some of the responses. They're explicitly saying this already happens (with varying success rates) in many parts of the world. So yes, it can happen.

      Same as imposing the collection of a GST on major online retailers (Amazon, Ebay, etc.).

      Internationally, some countries have banned loot crates outright such as Japan, Belgium and the Netherlands. Other have opted to attempt to regulate them with limited success such as China which made their sale illegal and odds disclosure mandatory. This has had limited success with developers quickly responding by slightly re-writing their loot crate mechanics to once again sit just outside the scope of the law by offering loot crates for free with virtual currency purchases, and thus exploiting loopholes in the legislation.

      It's not creating two versions of the game, complete with all the complexities that would imply. They're merely patching a specific section of code for one specific market. It's more like replacing an orange lego brick in a wall with a red lego brick than anything else.

      If Australia moves to ban loot boxes and micro-transactions are we to expect the big development houses, with worldwide reach, to alter their games for the purpose of selling in a single market?

      Big names already have.

      Blizzard changed the way their Hearthtone cards work in China (admittedly by gaming the system, so making it you techincally buy crafting materials and get free packs as a bonus)

      Valve recently changed the loot box system in Netherlands so instead of buying a box and opening it for a random item, when you go to buy a box, it literally shows you exactly what will be in that box before you click buy.

    Who would have thought a Queensland politocian would have a more rational view than a gaming association.

    Nice to see the politician pointing out what most rational people would get, that loot crates for shinies (cosmetics) are incredibly insidious and damaging, since the shinies would have as much, or more, value to a player chasing them than things that affect gameplay (p2w items)

    I half expected half the repsonses to have no fucking idea what a videogame was

    But surprisingly a lot of the government people repsonses were well researched and well thought out

    I guess i was expecting the american level of idiot repsonse to gaming issues since thats all you see in the news

    Kind of jazzed that so many responses were decent and researched and not technologically illiterate like i expected

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