Regulations for Loot Boxes in Video Games Imminent

Discussions over the legality of loot boxes was high on the list of most gaming regulators around the world in 2019 and early 2020. The COVID-19 pandemic shifted the attention away from loot boxes as governments and government agencies have been battling a number of other pressing issues related to COVID-19.

As things slowly start getting back to normal, it is inevitable that the loot box discussions are going to resurface. We believe that it is just a matter of time before governments across the world come out with new gaming regulations that video game developers will have to comply should they continue to want to use loot boxes in their video games.

What Are Loot Boxes?

If you don’t play video games, the term loot boxes may not be very familiar to you. Loot boxes have been around for over a decade and were usually built into free to play games. However, in recent year’s loot boxes have become a lot more popular as more video game developers have started implementing them in their games as they found a way to use loot boxes to bring in more gaming revenue.

Popular multiplayer video games like Overwatch, Apex Legends and Star Wars Battlefront II incorporate loot boxes. These loot boxes have special items hidden away and it is left up to the player to purchase these loot boxes and see if they can uncover this special item which usually helps them progress to the next level of the game or give them some special powers that help them play better.

These loot boxes are usually made available for a low price of $2 or $3 per box. The catch with these loot boxes is that there are multiple items located in each loot box and there is a slim chance that you will find your ‘special items’ in the first loot box you buy. Gamers get so attached to the game and the special features that they are willing to spend quite a bit of money as they look to buy more loot boxes in search of that special item.

Chinese players who were born in the 90s are estimated to have spent over $167m on loot boxes in 2018.

What Are Loot Boxes Controversial?

Loot boxes are controversial due to a number of reasons. A number of players have cried out for help in recent months claiming that they were addicted to loot boxes and had no control over the money they were spending to acquire more loot boxes.

A player recently said that when she started playing Path of Exile (PoE) she thought it was a harmless video game but later realized that she had developed a gambling addiction via loot boxes and was finding it difficult to stop.

Gaming regulators have taken heed to such complaints and have claimed that video games with loot boxes are similar to games of chance since the player has no idea what they are buying when they purchase a loot box. A number of gaming regulators have called for video games with loot boxes to be classified as online gambling and be subjected to online gambling regulations. Some of these issues are discussed further here.

Which Countries Have Cracked Down on Loot Boxes?

A number of countries including the United Kingdom (UK), Belgium, China and Australia have cracked down on video gaming developers who use loot boxes in their games. The Belgium Gaming Commission (BGC) ruled in 2018 that loot boxes violated their gambling laws and forced operators to remove loot boxes from their games or pull out from the new country.

The BGC notified operators that if they failed to comply with these new regulations they would be hit with a €800,000 fine and could face up to 5 years of jail time. The Minister of Justice in Belgium said they decided to take this decision as loot boxes mixed gambling and gaming and could cause a dangerous mental health problem.

Australia also decided to take a strong stance against loot boxes after the Australian House of Representatives Standing Committee said that it was important to prevent individuals under the age of 18 from accessing video games with loot boxes. The Committee claimed that based on current gambling laws in Australia they cannot categorically classify loot boxes as gambling but admitted there were concerns that it was very similar to gambling.

Some of the proposed recommendations in Australia is for loot boxes to have a clear age restriction rule, a disclaimer that loot boxes had the potential to cause problem gambling issues and loot boxes had a similar resemblance to online gambling.

The Digital, Culture, Media and Sport Committee (DCMS) committee in the UK also reached a similar conclusion stating that loot boxes should not be made available to children and that loot boxes should be bought only via in-game credits that are earned by winning credits during the game.

The United States has had mixed views on loot boxes as some legislators have claimed that it must be classified as gambling whereas other legislators don’t feel that it meets all the criteria to be classified as a game of chance.

Self-Regulation Could Be the Solution

Video game developers have been asked to use more discretion and self-regulation in their video games by letting players know which specific items are available in each loot box or allowing players to accumulate credits while playing and use it to purchase these loot boxes.

Whether video game developers will comply with the self-regulation push or continue to taunt gaming regulators remains to be seen.