In our last article we spoke a bit about loot boxes and the Commons debate on said topic. Let’s look into the matter further and dig a bit deeper.
The MPs and their call to classify loot boxes as gambling appears to have opened Pandora’s box, seen as a lot of the profits of the gaming industry come from children. The total profit of the industry is estimated at £110 billion. But, here’s the problematic bit. Companies do not only sell games to young players, they also enable them to purchase loot boxes. And we’ve seen that the purchase of loot boxes activates areas of the brain that are typically linked to gambling and gambling-related behaviours.
It is a large and profitable industry
At first glance, loot boxes seem rather benign. The mechanism is quite simple, you purchase the loot box and then upon paying the price you get to see what’s in it. It’s like buying your ticket for a lottery prize draw. You are paying first, and the outcome comes later, it is pretty clear that it involves an element of chance. That’s pretty much gambling in any book. Players all over the world have spent over $30 billion on loot boxes last year and that figure is set to reach $50 billion in five years’ time.
Certain countries have already classified loot boxes as gambling or have placed severe restrictions on their purchase. China, the Netherlands and Belgium have already taken the first steps to regulate and restrict the sale of loot boxes. Following the announcement of the conclusion of the Commons Committee that discussed the issue, it is more than evident that the UK Government will also have to take measures to ensure that children are protected and that companies are not taking advantage of them and their gullibility.
It is interesting to note that this is a rather unusual situation where conventional gaming companies are seen as the bad guys, while it is usually gambling operators that are portrayed as villains. And it makes sense since what conventional video game providers are doing is quite sinister. They are offering what essentially is a form of gambling, without admitting or acknowledging that fact and to make matters worse, they are offering gambling related services to children.
Companies to face increased pressure
The first thing that we need to look at are the figures, always and no matter what the topic is. In this case, we have a situation where more than 90% of all 10- to 16-year-olds are playing computer games (93% and 97% for boys and girls, respectively).
But the following figures are even more worrying. Three quarters of children who play games are aware that video game providers are trying to make them spend as much as possible and just a bit less than half of the children think that online games are fun only when they’re spending money.
There are various techniques, players are offered new playable content, new characters or weapons in addition to loot boxes. Some players are particularly keen on spending money for a feature that will enable them to complete a task or a mission that they have been struggling with.
The gaming industry is large, and companies are not likely to give up on the opportunity to make profit, but they will be facing increased pressure in the upcoming years and even months.