Liden 1 JL Professor M. B. English Comp. 1010 21, October 2022 The Issue With Loot Boxes and Gambling Imagine walking into a crowded building full of sights and sounds. The cards whirring in the hands of dealers backdropped by a playground of neon colors and strobing lights. You hear the sounds of bells and whistles of various slot machines as the racketing noise of their levers being pulled goes *thonk thonk*. I’m sure most people pictured a lively bustling casino in their minds. Now imagine that all the patrons you see at the tables and sitting before the slot machines are children. This is essentially what microtransactions in video games have evolved into over the years. While things like cosmetic microtransactions in video games are commonplace these days, unfortunately so too are their cousin the “loot box”. A loot box is a box containing a prize of unknown value, especially one offered for sale to players as part of an online game (Collins). Because these loot boxes are randomized and the odds of getting the best items are stacked against the player, much like a lottery ticket would be, I and many others would argue that loot boxes are essentially the same as a scratch off lottery card or a Powerball ticket one might pick up at a gas station. Being that loot boxes are essentially gambling, and gambling has the potential to cause issues with a person’s physical, emotional, and financial health, as well as possibly leading to gambling addiction, many inside and outside of the gaming industry believe that the laws in our country should change and that regulators should step in to put a stop to RNG loot boxes once and for all. Vaguely Liden 2 The first video game to introduce microtransactions was The Elder Scrolls IV: Oblivion by Bethesda Game Studios all the way back in 2006. (Wikipedia) The item for sale was a simple armor set for the players horse, and while at the time this was received negatively, it proved the market was ripe for a new form of transaction: the microtransaction, better known in the industry as DLC or downloadable content. DLC originally started off as nothing more than additional contend made for purchase for an already existing and released video game, available only thanks to the internet. While DLC started as something seemingly innocuous it has rapidly transformed into a serious problem within the games industry. Loot box spending in 2022, according to website Statista.com, is projected to hit 18.79 billion dollars by the end of the year 2022, and an estimated spending of 20.3 billion dollars by the end of 2025(Statista). To put that into perspective the lottery in the US generated just under 27 billion dollars in 2020, and the lottery is reserved only for adults 21 and older. To top it all off, about 5% of gamers generate half of the entire revenue created by loot box sails. This wouldn’t be an issue of loot boxes weren’t primarily targeted towards children. New research study compiled by the GambleAware charity went through pre-existing research to examine the validity of the links between in-game random prizes, or loot boxes, and gambling behavior. (BBC) A few of the things it found was that of the 93% of children who played video games, up to 40% had previously opened loot boxes. It also found that twelve out of the thirteen studies on the topic have established unambiguous connections between opening loot boxes and problem gambling behavior. (BBC) “Many gamers do ascribe discrete financial values to loot box contents – based on purchase or resale price – suggesting that many loot boxes Liden 3 meet existing criteria for gambling regulations,” one of the authors of the newly commissioned research study wrote. (BeGambleAware) Many countries around the world have already begun conversations on how to change laws regarding loot boxes and the dangers it poses towards minors and their psychological health. One country, Belgium, has already made loot boxes illegal staying that video game loot boxes are in violation of gambling legislation, according to the Belgium Gaming Commission. Specifically, that organizing games of chance or betting, both of which are readily available to do in many video games today, requires a license from the Gaming Commission or GC. (Gamingcommission.be) In the United States back in 2021, Congressmen and women sent an open letter to several large video game companies urging them to re-evaluate and adopt stricter standards for how they handle in-game microtransactions, with loot boxes being the specific target of their ire. Despite this though, game publishers continue to pump their games full of predatory loot boxes and pay to win mechanics. There are countless horror stories of young kids accessing their parents credit card without their knowledge and running up bills that total in the thousands, and sometimes tens of thousands of dollars such as Jasman Choo, a teenager from Singapore who ended up spending $20,000 of his parents’ money. (Channel News Asia) Now while Jasman and many other people, adults and children alike may themselves not realize what is going on, the psychologists hired and employed by today’s game publishers do. Just as things like slot machines can be alluring to some people, so can too the loot box. Psychologists refer to the principle by which things like loot boxes or slot machines work. It’s called the principle of “variable rate reinforcement”. “The player is basically working for reward by making a series of responses, but the rewards are delivered unpredictably. We know that the dopamine system, which is targeted by drugs of Liden 4 abuse, is also very interested in unpredictable rewards. Dopamine cells are most active when there is maximum uncertainty, and the dopamine system responds more to an uncertain reward than the same reward delivered on a predictable basis” says Dr Luke Clark, a director at the Center for Gambling Research at the University of British Columbia. (PC Gamer) Another psychologist that studied this phenomenon was B.F. Skinner who in the 1930’s conditioned animals to respond to certain stimuli in closed boxes, aka Skinner Boxes, and showed that even when the rewards were removed from the equation, the subjects of the study would persistently respond, sometimes many hundreds of times, all to try and recreate the circumstances in which it got its reward before. If that isn’t enough to worry you, lets talk about a few of the other psychological principles at work in games aimed at audiences as young as six years old. First there is the “sunk cost fallacy”. According to Grammarly.com “the sunk cost fallacy is the human tendency tostick with endeavors in which we’ve already invested time, money, or other resources even when changing course would be the more logical choice.” (Grammarly) By far the best example of this in practice is constantly throwing money at a car that keeps breaking down every month. Oddly enough, we as humans have this idea in our minds that its “not over” until we give up, so in a persons mind its almost as if they haven’t lost until they give up. So even though you’re 10 loot boxes and $50 dollars down, its not actually $50 lost until you decide to give up the chase on that legendary item, or that high stat player in games like FIFA. Again, back to the car, it’s not money wasted until you decide that it would be better off to just purchase another vehicle. There’s also the “gambler’s fallacy” which preys upon people’s skewed idea of probability. A perfect example of this would be tossing a fair coin five times and getting heads all five of those times. In many people’s minds the next flip of the coin would be more likely to Liden 5 land on tail’s simply because its “due” to come up tails regardless of the fact that each coin flip has an exactly 50/50 chance of landing on either. This works hand in hand with the “sunk cost fallacy” in that the more loot boxes you go through, the higher the perceived chance of getting that item you’ve been chasing after, and again, even though you’re ten loot boxes in, its not a lost cause until you decide its time to give up. These are just a few of the many psychological principles at play in modern day loot boxes, but there are many more such as the “availability heuristic”, “illusion of control”, “the near miss illusion”, and the list goes on. (Psychology of Games) Considering all of the many psychological tools of manipulation that are at play, it’s clear to me, and to many others in the gaming community that not only are loot boxes almost identical to gambling, but that they should be regulated as such by the government. It is obvious that with such a gigantic stream of revenue flowing to these publishers, CEO’s, shareholders, and the lobbyists hired by said publishers, that this is going to be an uphill battle. Hopefully though as the public becomes more aware of this issue, and more stories of children, teenagers, or even adults going into debt and spending incredible sums of money on what amounts to nothing more than a fancy “Skinner Boxes”, that more people and regulators will get involved in the fight to end this type of harmful and insidious manipulation in our video games. Liden 6 Works Cited Closes, James. “Lifting the Lid on Loot-Boxes.” Be GambleAware, https://www.begambleaware.org/sites/default/files/202103/Gaming_and_Gambling_Report_Final.pdf. Accessed 27 Oct. 2022 Gerkin, Tom. “Video game loot boxes declared illegal under Belgium gambling laws.” BBC News. 26 April 2018, https://www.bbc.com/news/technology-43906306. Accessed 27 Oct. 2022 Kramer, Lindsay. “Sunk Cost Fallacy: Definition and Examples.” Grammarly, 25 Aug. 2022, https://www.grammarly.com/blog/sunk-costfallacy/#:~:text=The%20sunk%20cost%20fallacy%20is%20the%20human%20tendency%20to% 20stick,be%20the%20more%20logical%20choice, Accessed 27 Oct. 2022 “Lentis/Microtransactions in Videogames.” Wikibooks, Wikimedia Foundation, 30 March 2021, https://en.wikibooks.org/wiki/Lentis/Microtransactions_in_Videogames#:~:text=The%20 first%20microtransaction%20sold%20by,cosmetic%20item%20was%20too%20much. Accessed 25 Oct. 2022 “Loot Box.” Collins Dictionary, HarperCollins Publishers. www.collinsdictionary.com/us/dicttionary/english/loot-box. Accessed 26 October 2022. “Loot boxes linked to problem gambling in new research.” BBC News, 2 April 2021, www.bbc.com/news/technology-56614281. Accessed 27 Oct. 2022 Liden 7 https://www.channelnewsasia.com/cnainsider/spent-parents-money-mystery-loot-boxes-gamingproblem-gambling-2050696. Accessed 28 Oct. 2022 Madigan, Jamie. “Using Psychology and Loot Boxes to Destroy Video Games: A fun and Practical Guide.” The Psychology of Games, 1 Jan. 2018, https://www.psychologyofgames.com/2018/01/using-psychology-and-loot-boxes-too-destroyvideo-games-a-fun-and-practical-guide/. Accessed 29 Oct. 2022 “State and local lottery revenue in the United States from 1977 to 2020.” Statista, Dec. 2021, https://www.statista.com/statistics/249128/us-state-and-local-lottery-revenue/. Accessed 24 Oct. 2022 Wiltshire, Alex. “Behind the addictive psychology and seductive art of loot boxes.” PC Gamer, 28 Jan. 2017, https://www.pcgamer.com/behind-the-addictive-psychology-and-seductive-art-ofloot-boxes/. Accessed 29 Oct. 2022 Yeoh, Grace. “I spent $20,000 of my parents’ money on mystery boxes’: When lines between gaming and gambling are blurred.” Channel News Asia, 20 June 2021, Davies, Rob. “Video game loot boxes linked to problem gambling, study shows.” The Guardian, 1 Apr. 2021, https://www.theguardian.com/society/2021/apr/02/video-game-loot-boxesproblem-gambling-betting-children. Accessed 27 Oct. 2022 https://medium.com/@theroarbots/the-dangers-of-video-game-loot-boxes-85768e2b5602 Liden 8 https://www.gamedeveloper.com/business/congress-turns-its-eye-toward-loot-box-regulation-inletter-to-developers
