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20 November
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The US Government Wants to Put an End to Loot Boxes

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November 20, 2019
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A debate about whether or not loot boxes are a sort of gambling has been going on for years now. China and Belgium have already banned them, and the U.S. is on the verge of doing so too. Gamers in the States are spending hundreds of dollars monthly on these virtual crates, which contain a number of random virtual items or loot that can bring them benefits in a game. Many consider this pay-to-win approach to be very similar to gambling and as such, harmful to children.

Loot boxes appeared somewhere between 2004 and 2007. And if you have ever played free mobile games, there is a huge possibility that you have come across them. Maybe even bought one or two.

What Are They?

Loot boxes are virtual items that players can get for free or buy for real money in video or mobile games. Each crate holds random virtual goods that players can use in a game. It can be a simple customization option for your character, but it may also be equipment or an object that can significantly change the game, such as weapons, armor, etc. For example, in EA’s FIFA, gamers collect cards of soccer players this way. And getting a particular card enables them to add a certain soccer star to their team.

These virtual boxes are based on chance because you never know what items you are going to get. Some of them are more beneficial than others. Also, sometimes you are in pursuit of a particular item, which may prompt you to burn more cash on loot boxes until you finally get it.

The bottom line is this feature is a way for providers to take more money from gamers. Loot boxes are quite a lucrative business model. So it wasn’t long before the majority of big manufacturers in the gaming industry jumped on board. Nowadays, loot boxes are available in almost all the games popular around the world, such as Overwatch, League of Legends, FIFA, Counter-Strike: Global Offensive, Star Wars Battlefront II, just to name a few.

The popularity of loot crates has grown to such an extent that in 2018, providers generated around $30 billion selling loot boxes and skins for games. According to some predictions, by 2022, gamers around the world will be spending around $50 billion on these items. Alongside popularity, loot boxes sparked off a controversy. Parents, government officials, and even some gamers consider them to be a form of gambling.

What Seems to Be the Problem With Loot Boxes?

While there are games that grant loot boxes to players for free, there are those that make you buy one in order to get beneficial items. Many consider this pay-to-win method manipulative, and similar to gambling. And as such, it can be particularly harmful to children and teenagers playing games. It promises to give them something of value if they pay for it.

Problem With Loot Boxes

Also, each loot box comes with an element of chance because you’ll never know what goods it will reveal. Oftentimes, gamers are searching for a particularly valuable item, and they spend a lot of cash on these boxes until they finally find the desired object. So it’s evident how these virtual boxes can create addictive behavior, which is another link to gambling.

Loot boxes usually come at a price that seems reasonable to players. For example, in Blizzard’s Overwatch, a pair of loot crates costs $1.99, while 50 boxes cost $39.99. We have already mentioned the addictiveness of this mechanism, and gamers are known to spend considerable sums of money believing that the next box might be the right one.

Black Market for Loot Box Items

The content of each box is meant to be usable only in the game, and players can’t trade it for real-world money. Well, at least they couldn’t until the black market appeared. You can find many sites where gamers can buy or sell items found in loot crates.

Although game providers and the video game industry don’t have any influence over or benefit from this, it’s still a huge problem. People are spending vast amounts of money on trading virtual objects. And we can only wonder how much gamers are willing to pay for an object that brings them a virtual item in a game.

How Much Do People Spend on Loot Boxes?

According to some research, gamers around the world spend around $30 billion a year on loot boxes and skins. It’s estimated that by 2022, that number will rise to $50 billion.

Spend on Loot Boxes

Kids in the UK Emptied Family Bank Account

The U.K. was stunned recently by media headlines saying that four children from Hampshire emptied family bank account buying loot boxes for FIFA. As it turned out, their father bought them a single box using a family Nintendo account that was connected to his credit card. But the children watched what he did, followed his actions, and eventually ended up spending £550, which is around $700. 

The father did admit that he hadn’t protected the account, and the children were sorry, but it’s evident that buying loot crates can easily get out of control. And even after blowing that much money, they didn’t get the soccer star they were hoping for.

Japanese Gamer Burned $6,000 on Loot Crates

Unfortunately, the U.K. example we have mentioned above is not a lonely case. Children around the world are spending a lot of money abusing their parents’ credit cards, buying these in-game items. For example, U.S. gamers are spending hundreds of dollars each month on this game feature. But probably one of the most absurd stories about loot box purchases comes from Japan. 

In 2016, a Japanese gamer spent more than $6,000 on loot boxes, trying to get a specific character in an RPG video game. And you have to admit, spending that sum on a game character is ludicrous.

Belgium and China First to Outlaw Loot Crates

Since initially, they were meant as a fun element of surprise in video games, loot boxes are not regulated by gambling laws or any other legislation. But after facing harsh criticism, some countries decided to ban them.

Belgium was the first European country that took this step. After they officially forbade loot crates, providers such as Blizzard and EA had to remove the option of buying these items from their games for Belgian players. In Asia, China is the first country that took steps toward prohibiting loot crates but only in specific games, considering them a form of gambling.

Loot Boxes to Be Banned in the US

Loot Boxes Banned

The United States faces similar problems and controversy regarding loot boxes. People are complaining that this game feature, available even to children, represents a kind of gambling that can cause addiction. Current gambling and gaming laws don’t say anything about this particular issue.

Although many politicians have spoken about the problem, it was Republican Senator Josh Hawley who made the first step towards regulating loot boxes. He introduced a bill named the Protecting Children From Abusive Games Act. The bill suggests that games that are available to minors must not include loot boxes or any kind of pay-to-win mechanics.

However, this legislation doesn’t propose how that should be done. Many consider this to be a major flaw and are skeptical about how it will turn out in the end. If the bill passes, the Federal Trade Commission will be obliged to enforce these rules. That means that they will probably act on the Children’s Online Privacy Protection Act to decide what games are suitable for children.

What the Gaming Industry Says

As you may assume, the video game industry is not thrilled with the current state of affairs. Game providers are defending loot boxes, saying that they have nothing to do with gambling. In their own words, while gambling can leave you empty-handed, it will never happen with loot crates because they always reward players with items that are valuable for their game.

California-based video game company EA (Electronic Arts) has been a particularly vocal advocate for loot boxes. They say these have an element of surprise similar to that of a Kinder Egg, a chocolate candy that comes with a miniature toy. But then again, the Kinder Egg is forbidden in the U.S. too.

In regard to the claim that loot boxes force children to spend money, providers say that parents can always turn on parental control. But as we have seen in the examples we have mentioned above, this does not always help because children seem to find ways to bypass these controls.

The Uncertain Future of Loot Boxes

The U.S. has yet to determine whether loot boxes will be banned for good or continue to exist in some form. We can’t deny the potentially harmful effects they can have on children. By enabling them to purchase loot boxes, providers send messages to kids that, as long as they are paying, there is a chance they will collect a worthy item. It’s wrong, and it’s dangerous without a doubt.

Even adults may fall prey to these items since their element of chance is the same one casino games are based on. And that is a highly addictive mechanism that can lead to many problems. While loot boxes are, without a doubt, an entertaining element of video games, they are also another way for providers to collect profit from players. Still, the future of this gaming “Pandora’s” box, at least in the U.S., is still uncertain.

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