Study Urges Games With Loot Boxes To Be Restricted To Players Old Enough To Gamble

The Australian Senate inquiry into micro-transactions heard a call for "serious consideration" to restrict games with loot boxes to "players of legal gambling age" yesterday. The authors of a large scale study presented their findings, strongly supporting a previous study that claimed loot boxes were psychologically akin to gambling.

The study by Dr David Zendle and Paul Cairns from York St. John University and the University of York. Dr Zendle submitted that study to the Environment and Communications References Committee yesterday at a public hearing, and was the only person to appear in front of the committee.

Titled "Loot box spending in video games is linked to problem gambling severity", the study surveyed 7422 gamers through a paid online survey (over six thousand replies were discarded due to non-serious answers, incomplete answers or for ethical concerns).

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.

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The study took direct aim at the prevailing industry view of loot boxes:

Industry statements typically disassociate loot boxes from gambling. They instead highlight similarities between loot boxes and harmless products like trading cards or Kinder Surprise eggs. As the ESRC put it: "We do not consider loot boxes to be gambling … loot boxes are more comparable to baseball cards, where there is an element of surprise and you always get something."

...

These results support the position of academics who claim that loot boxes are psychologically akin to gambling. Spending large amounts of money on loot boxes was associated with problematic levels of spending on other forms of gambling. This is what one would expect if loot boxes psychologically constituted a form of gambling. It is not what one would expect if loot boxes were, instead, psychologically comparable to baseball cards.

The submission also warned that their results suggest that either "loot boxes act as a gateway to problem gambling amongst gamers" or that loot boxes give developers "an unregulated way of exploiting gambling disorders amongst their customers".

To that end, Dr Zendle and Cairns added to previous submissions calling for loot boxes to be earmarked in parental advisories, as well as a descriptor noting the presence of "in-game gambling content". This would likely be done through the classification system.

NSW And Victoria Push For Loot Boxes To Be Classified

With just under a month until the Senate inquiry into "gaming microtransactions for chance-based items" - loot boxes and such - reports back, more submissions to the inquiry have been made public. Two of those submissions have come from the Victorian Minister for Gaming and Liquor Regulation, as well as the NSW Government's deputy secretary of Liquor, Gaming and Racing, and both submissions are encouraging an update to the classification guidelines to recognise loot boxes.

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"We recommend that ... serious consideration is given to restricting games that contain loot boxes to players of legal gambling age," the academics added.

The academics noted in the study that the relationship between loot box use and problem gambling was "stronger previously observed relationships between problem gambling and factors like alcohol abuse, drug use, and depression".

They noted that the research was correlational, however, and that it was impossible to determine whether their results were looking at a situation where loot box spending would encourage problem gambling, or vice versa.

"It may, indeed be the case that both directions of causality are true: Problem gamblers spend more on loot boxes, whilst buying loot boxes simultaneously leads to increases in problem gambling amongst gamers," they added.

Their submission, which includes the study, can be downloaded from the Australian Parliament website. The academics' video submission to the inquiry can also be viewed here.

Australian Loot Box Inquiry Report Delayed To October 17

The Australian loot box inquiry was due to table a report yesterday, but the Senate has opted to extend the inquiry by another month for additional hearings and briefings.

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Comments

    Can't wait for Overwatch to be reclassified R.

      Because game ratings completely stop kids from playing them....

        I don't think that is what he is getting at.

        While a rating is just a sticker on a box, if they instead apply the same age restrictions as gambling... it would be illegal for Blizzard to sell to minors. With each breach an offence under the law.

        But thats as long as they dont let the classification board handle this.

    Makes sense. With tangible products like booster packs and Kinder surprises there is a physical factor that influences your cognitive processes. There is a direct, visible result of your actions that most people will use as an indicator of how much they have spent.

    In the virtual world, there isn't any kind of feedback and this is why you hear of people spending thousands of dollars on Candy Crush or loot boxes. You spend the money, the boxes pop loot out which goes to your inventory out of sight and then you think "It's just a few dollars to try again" and the process repeats.

    If developers want to avoid the gambling associations, perhaps they should redesign their interfaces to make it more obvious to players how much they have spent so far. Of course, that defeats the purpose of microtransactions which are meant to be small so you don't see them mounting up as easily.

      The overwhelming majority of the time it's not even a physical currency exchange, either. It's imaginary money - a few mouse clicks or a fingerprint acknowledgement, streamlining the process to make it as easy and unconscious as breathing. The effortless transaction compouds the ease with which they can stack up.

        The credit system is a rort.
        If you pay cash for something faulty you get a refund in cash. With credits you might not even get a refund on them. You bought credits with cash. Not the item in game you bought that with credits. Your credits are fine their not faulty, no entitlement to a refund there. If that makes sense.

      $10-$100 pricetags also tend to defeat the original purpose of "microtransactions."

      I really wish we'd kept the term "expansion" for major pieces of content, and relegated "DLC" to small pieces of content - a map, a mission, or a playable character - and microtransactions would be restricted to referring to pieces of DLC under a certain price-point.

      "...if developers want to avoid...", the fact is that they intentionally created the mechanic to exploit the psychology of both the gambler and the addict consumer...these guys have specifically qualified people who plan this stuff, they aren't hick developers in mom's garage.

      Last edited 18/09/18 5:05 pm

    I’d support a ban for games rated under MA (or R), BUT it needs to be clear that ‘loot boxes’ only refer to prizes that can be purchased using real life currency.
    I’ve got no problem at all with loot boxes being included as a chance-based incentive to keep playing- those have been in games for as long as I can remember.

    I predict that publishers and developers will roll over on this issue over the next 4-5 years (under the guise of good-will) and we’ll see a decrease in micro transactions and loot boxes in AAA titles, followed closely by all major publishes moving to streaming-based subscription models to replace micro-transactions as their major revenue stream. You’ll end up paying for timed use (either as a time period or metered) and they’ll tie DLC content updates and addictive, gambling-like mechanics into those systems to keep you paying.

      Subscriptions are dangerous for the publisher/developer.

      There's only so many subscriptions that people can handle. Once you're locked into one (and you've invested time and effort into your account) it's very difficult to pull people away.
      It's one of the main reasons that WoW has been the dominant MMO for 10+ years.
      It's simply too hard for even other massive AAA games to break into the market.

      At best people can buy 1 month, play the game after release then it becomes a ghost town. At worst, people will skip the game and keep playing what they already pay for.

      I don't think multiple publishers moving to subscription models is a viable solution.

      We're probably more likely to get smaller episodic games. Where you might only pay $30 but need to buy the next 3 episodes for another $30 each over the next 12 months or whatever.
      That gives them continual income, while making the initial game smaller and a bit cheaper to develop.
      Or like other industries, they're going to have to start working on cutting costs.

        Fair points.

        I think it’s more likely that you’ll buy a publisher or platform wide subscription to mitigate some of those risks, maybe with a layer of smart charging under that to compensate specific developers for making popular games.
        More EA Access, Xbox Gamepass style than WoW.

        I don’t know for sure though.

      In regards to the second part of your response - unfortunately, I think what you said could hold some water. That's not to say that definitely going to happen, but I could certainly see publishers and developers scramble towards something like a streaming based subscription if their precious micro transaction revenue began drying up due to new laws and restrictions (if indeed that does begin to happen). I mean, a streaming based subscription has already been talked about by Microsoft in regards to the next generation of consoles (at least as an option, which I'm sure would be a litmus test to see how people react to such a thing).

      If that's the direction the gaming industry heads in, I'll be utterly done with the 'new' system. I'll stick with the 'old' games as there is plenty of them that I'd be happy to go back to / games that I've been meaning to play for years, etc ... and I'll just watch YouTube videos and Twitch streams of the 'new' games. In fact I think there is every possibility that watching other people play games could be the new 'piracy'. I couldn't foresee a huge conversion rate of people adapting to a streaming based system, especially with how bad the internet still is in a lot of places around the world. The input latency alone, even in places with half decent connections, would still be enough for people to abandon it (at least that's what I think).

        As long as the industry doesn’t move to streaming before adequate technology is available most places and there’s still competition in the market to stop things getting too crazy, I don’t care at all if the payment model changes.

        I’ve seen enough technologies come and go over the years to know that the quality of service will more or less work out. After the ‘always on’ Xbox hysteria that seems completely ridiculous just 5 years later I’m happy to stay out of the next round of hyperventilating.

        The big companies don’t want to lose money by shutting us out and competition should(?) stop them from f-ing us over mostly. We’ll all be subjected to the same mass market where the easily exploitable people who currently buy microtransactions will keep rewarding exploitative behaviour, but there’s nothing we can do about that.

        It’ll be fine.

          After the ‘always on’ Xbox hysteria that seems completely ridiculous just 5 years later

          Otoh, PSN has been brought down by multiple DDoS attacks in the last four years, as well as numerous times when it's been down for other reasons without warning. I am very happy that Sony opted against making an 'always on' console.

            Oh for sure.

            I've only bought one physical Xbone game since launch night though, so I'm absolutely living in the always-on reality and I've never had any problem at all.

          I don't think I'm as optimistic as you are (and I don't stress about the situation at all - what will be, will be). I still, to this day, think that the 'always online' which was propositioned by Microsoft for the Xbox One was a terrible idea (24 hour verification is heavy handed, not even Denuvo requires that). The internet isn't that great where I live. What if game streaming becomes a standard? Then what I'm able to play (and at what quality) is *entirely* based on how well the internet is performing (or if it's even working at all). I like the thought that it's all based on what's INSIDE my house (that I have complete control over) that dictates my gaming experience (i.e. how good the components of my PC are, or what tier/revision of console I'm playing on ... not if any of the multitude of things between my house and the ISP are working exactly as they should every time I want to sit down and play a game).

          It's also as @Inquisitorsz said above: every publisher is going to want maximum revenue, so they aren't all going to buy into a centralised 'Steam-like' streaming service where someone else gets a cut of their money. Every single publisher/developer is going to want to have their very own streaming service. How many are there going to be? Origin, Uplay, Battle.net, Bethesda.net, Rockstar Social Club. That's just five off the top of my head, God knows how many more might pop up if streaming games becomes the new standard. There is nothing about it that bodes well as far as I'm concerned. Like I said before, if that's where it all ends up then I am completely DONE. I will go back to playing 'old' games (cracked if need be) and simply resort to watching anything new that catches my interest via YouTube or Twitch.

          Perhaps I'm just old but I don't have this irrevocable faith in the internet like some people do, especially when it comes to the likes of replacing a gaming PC or a console entirely. I had the same sentiments when Microsoft kept touting "the power of the cloud", and how it was going to turn every Xbox One into a supercomputer. Yeah, what ever happened to that? Of course I use the internet, but I make a clear distinction between using it of my own volition as a tool, and being FORCED to use it in order to access something that previously didn't require it. I would feel the same way if one day people were required to access the internet in order to start the engine in their car. When it isn't necessary, I will simply never support it.

        We're seeing it already with Games As A Service, and Season Passes. The whole process with this is to generate ongoing profits for the companies, ostensibly to cover the costs of ongoing support (new features, server costs, etc) but in reality to generate profit beyond the initial surge of release purchases.

        If esports continues the way they are, picture a future where you pay an entry fee just to play a tournament in a popular game. Argument is there that an entry fee covers costs and/or prizes.

        Imagine some kid needing to pay 100 vbucks for a game of Fortnite, the equivalent of $1. Is that better or worse than lootboxes? If people cant see that as a possible future, just wait.

        These ARE big businesses, and they will find a way to nickel and dime gamers. Currently its lootboxes, but if they aren't worth doing, they still want that profit and will find a way.

      Agreed. I've developed a game that uses randomised rewards that players can buy, but only with in game "soft" currency. You can't buy the coins or crates with real money. If you spend real money in my game you purchase from a list of "pre-rolled" items so that you know exactly what you are getting

        Derailed?

          Yup. I originally had Coin packs but after the Loot Box story first blew up I decided it was right to remove them before release.

        I worry that the nannystaters out there will demand that even 'soft' currency lootboxes be deemed gambling.

        From your description, Derailed is how it should be. Earn ingame coins, use them for some randomised reward. But others will see that as gambling behaviour, and teaching kids to gamble. Which is an incredibly broad criteria and catches so many games you may as well ban games for kids.

        Or just as bad, the official criteria will conflate the ability to spend money on the game, and the presence of a random reward into being ambling even though the two aren't connected.

        I'm all for blocking the predatory setups that are pay to win, but I just worry that in the rush to do so, innocent games are going to get caught up in whatever the new rules become.

        It'll happen somewhere, whether its here, Belgium, China, or the USA, and then what?

          I worry too. Government responses are rarely nuanced and well thought out. Would be very hard to make a profitable game without IAP or randomised rewards.

    The big publishers like EA, 2K and Activision are not interested in having healthy, sustainable businesses that provide their customers with valuable and rewarding experiences because there's more profitable ventures to be found in tricking people into spending every last dollar to get some intangible reward that may never come. This is incredibly short-sighted though.

    Like any underhanded and unconscionable business practice, the politicians will eventually come to realise that it's no good for society and attempt to place restrictions on it. Maybe the worst offenders will even suffer financial losses and realise what they were doing was wrong the whole time.

    I can't wait, we may once again get games that are actually rewarding to just play rather than being addictive and hollow.

      You are so wonderfully charitable when considering the motives of politicians.

      Like any underhanded and unconscionable business practice, the politicians will eventually come to realise that it's no good for society and attempt to place restrictions on it.

      See, I - a cynic - would've said that most underhanded and unconscionable business practices tend to get a free pass from politicians if they're getting donations out of it, or can otherwise arrange to get their own cut. And the only reason this might get examined is if it starts looking like the pollies can get some popular kicking in on someone who isn't a donor or who can't be extorted.

        Yeah, notice how our politicians hem and haw when it comes to reigning in the ACTUAL gambling industry because the pokies redirect so much money from the poor addicted saps who pour their paychecks into them into their coffers. But when it comes to mere vidya gems they can't jump on it fast enough. At best, this is a stopped clock moment.

    Even adults need protection from this too, I want to see regulation like the gambling industry....

    Company and product is licensed in Australia. (Accountability - block clone game market on mobiles too.)
    Taxes (cause they offshore all that money)
    Auditing (keep them honest)
    List odds and mechanics, including catchup, pay2win,and match fixing
    That no item is exclusive to a lootbox and any ingame item can be purchased in store by itself.
    No sales to children
    No ingame marketing or sales pressure.
    Applies to console, PC and mobile

    Going off of what is stated in this article. there are 2 things I find very interesting with this report. Firstly, the paragraph "This is what one would expect if loot boxes psychologically constituted a form of gambling. It is not what one would expect if loot boxes were, instead, psychologically comparable to baseball cards." Personally, I would say that cosmetic loot boxes are less akin to gambling due to there being no monetary reward, i.e. no market around reselling the items (Yes i know about CS:GO and will deal with that later) whereas with say baseball or MTG cards, there are communities for buying and selling the cards and some go for far more than loot box rewards in say CS:GO. Also, CCGs work off of the exact same principal as loot boxes just with physical rewards as some will buy 10s or 100s of packs in order to get one card that might be worth $150, so the psychological concern around the difference of the two regarding their study does seem a bit unusual.

    Secondly, they claim "We recommend that ... serious consideration is given to restricting games that contain loot boxes to players of legal gambling age." According to the studies that have been used by the Netherlands and Belgium, there is a variety of games in their report. While some of them (CS:GO, COD WWii, Overwatch) are classified as either PEGI 16 or 18, most are PEGI 12 or under including FIFA 18 and NBA 2K18. If this regulation was to come in and EA decided to fight it the same as there are attempting to do with Netherlands and Belgium investigating EA, then FIFA and NBA will be R rated games which does make a bit of a mockery of what the rating is for. GTA 5, drug use - R, Witcher 3 - intense violence (i think this is body parts being detached from attacks) - R, FIFA 19 - has card packs similar to a CCG - R

    Yes, I do agree that there should be mandatory monitoring tools to show users what they've spent on loot boxes and that packs earner via purely in-game means shouldn't be considered the same as loot boxes brought using real money. However, if something major is to happen with this investigation, both sides should stand before the Senate and produce detailed reports or failing that, have a report commisioned by an organisation that is impartial in the debate and thus makes it less biased.

      The trading card example is funny to hear from US publishers... as it was not a ruling in Australia or Europe (re Brussels recent battle with EA).
      It was a US Court Case to stop them being considered gambling as gambling laws in US were prohibtionist at the time.

      Saying its not considered gambling under US law... doesnt mean its not under Australian law, (Valve learnt that lesson with the word Service) it just means we havent made a definitive ruling like the US.

      Would be funny if EA told Brussels, "Its like trading cards" and Finland said "Your right... ban trading cards too"

    Can be put legislation on Kinder Surprises? A sweet version of loot boxes?

    My biggest issue with this debate is the question... Is it Gambling? Thats irrelevant.

    It is or isnt, is not a concern.

    Are consumers being harmed and pressured with psychological effects to buy items for real money for virtual items that have no value assigned to them other than the imaginery value the seller has applied to them. In products that are manipulative design to encourage the sale of such items through intentional difficulty mechanics, endless time waates or social pressures

    Gambling laws in Australia, are just industry specific consumer protection laws. Regardless of the determination I think should Australia draft an industry specific Microtransaction consumer protection law that keeps the industry honest and prevent mental and financial ruin of Australian lives (especially children and the mental health of susceptible adults)

    Pretty damning if a study says Lootboxes are more of a gateway to Gambling... than actual drugs.

    As far as ccgs go, at least they give you a rare in every pack.
    Ive always wondered as well if lootboxes were cheaper or if it was easier to obtain them in game would this be as much of an issue.
    I feel that the time invested/reward earnt is more of a negative factor in this. And considering most lootbox items are non transferrable and generally fluffed up with additional useless content, if they were cheaper would there be a general increase in player consumption especially if it also offered non duplicate rolling or guaranteed results on specific items. Black ops 3 cryptocurrency and black market boxes specifically, at the start the earn rate was good but common crates gave the best gear while saving up and spending on "rare" crates generally gave worse results on a 3 item drop compared to the 9 random drop. Also what is the point of having rarity when rare isnt even rare. Common, uncommon, rare, legendary, mythic, heroic, exotic.

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