The UK could follow European counterparts Belgium and Netherlands in regulating loot boxes and microtransactions.
A report by the House Of Lords Gambling committee in the UK has suggested that in-game loot boxes need heavier restrictions placed against them.
The report defines loot boxes as “things in video games where you are handing over money and you are getting something uncertain that is determined randomly in some way.” These items have already been banned in Belgium and have caused European ratings board PEGI to put more extensive labels on games that include warnings of in-game purchases.
Belgium isn’t the only European country to regulate these loot boxes. In 2018, the Netherlands determined that some loot boxes would be legal and others illegal, depending on whether or not the items were transferable. If they were non-transferable, the loot boxes would be considered legal as there is no chance for any outside gain from your items. However, if the items could be transferred the in-game purchases would be deemed illegal.
The House of Lords report cites research from Dr. Zendle who found that “loot box spending is linked to problem gambling in both adults and adolescents” and that every single study showed “there was a link between spending on loot boxes and problem gambling.” These findings, while shocking, come as no surprise as companies often look to hook “whales” – a term that has been coined for those players who spend above and beyond what is considered a healthy amount on these purchases.
Dr. Zendle suggests that “as loot boxes share many features with gambling, and that spending on loot boxes is linked to problem gambling in both adults and children, they should be regulated.” This sentiment was echoed by the House of Lords who stated, “if a product looks like gambling and feels like gambling, it should be regulated as gambling.”
The report then makes its biggest suggestion saying, “We recommend that Ministers should make regulations under section 6(6) of the Gambling Act 2005 specifying that loot boxes and any other similar games are games of chance, without waiting for the Government’s wider review of the Gambling Act.”
Speaking to BBC Breakfast, Lord Grade who is chairman of the committee said loot boxes are “teaching kids to gamble” and that the UK’s Gambling act was “way behind what was actually happening in the market.” This follows calls from earlier this year when the NHS Mental Health Director urged companies to ban loot boxes from their games.
This could cause some big issues within the industry with companies like EA making a huge percentage of their profit from these microtransactions. EA alone made nearly $3 billion in microtransaction revenue in 2019 with no doubt a large chunk of that coming from FIFA Ultimate Team, which is an incredibly popular mode littered with loot boxes in one of the UK’s most popular games.
While some companies continue with these loot boxes, others have adapted to a fairer system for players. Rocket League, which used to have a loot box system called crates, instead opted to change to a more transparent system called blueprints. Other games like Fortnite use a Seasonal Battle Pass system which allows players to choose whether to pay a one-off fee to earn already disclosed items as they play. This doesn’t mean Fortnite is clean, however, as speaking from experience of working in video game retail in the past, the time-limited skins that are released within game cause kids to demand their parents to drop upwards of $10 for a singular cosmetic item so as not to feel left out.
It will be interesting to see if the UK government takes heed of these findings and acts to regulate loot boxes in the gaming industry and with a report this damning and calls from institutions such as the NHS it would be a surprise at this point if they didn’t.