How Loot Boxes In Children’s Video Games Encourage Gambling


From my contribution to Forbes Sportsmoney: "Loot boxes" and other common video game features can mimic gambling and can lead children and adolescents to associate gambling with fun. These "microtransactions" are big business- earning tens of billions of dollars annually for gaming companies. Parental awareness of these dynamics is important.

A child plays Fortnight, a game with loot boxes that can encourage gambling behavior
SOUTH PASADENA, CA – APRIL 23: 11-year-old Ansel, the photographer’s son, plays Fortnite featuring … [+]GETTY IMAGES

While gambling is illegal in the U.S., children can begin gambling as early as 10, and 80% of adolescents reported gambling in the past year. If your child plays video games, they may be gambling without realizing it. Do you know how to identify gambling behavior and what you can do if you suspect there is a problem?

Loot Boxes in Children’s Video Games Encourage “Gambling-like” Behavior

Video games used to be one-time purchases. Today, games act more as a service, with companies often providing them for free and relying upon “loot boxes” and microtransactions like in-app purchases to create revenue streams. According to a Federal Trade Commission report, loot boxes have been a topic of concern both nationally and internationally over concerns that they encourage gambling-like behavior or use concerning tactics that can encourage addictive consumer spending, even in games targeting young children.

Loot boxes are typically an in-game container that masks the contents- which are random. Players spend real currency or in-game currency to receive one of these random items, which can make the player more powerful, competitive, or appealing. The concept became mainstream in 2010 when introduced into popular games like Team Fortress 2, and then Overwatch and Call of Duty:WW2. In fact, some popular games, like Star Wars Battlefront II incorporated them to such an extent that it was accused of being “pay to win,” prompting a significant backlash that led to the publisher, Electronic Arts, to revise the game. Yet the formula remains common, with popular franchises such as Candy Crush, Diablo, Final Fantasy releasing games that rely heavily on microtransactions and loot boxes to succeed.

Loot boxes and microtransactions can lead children to gamble without realizing it
Microtransactions, loot box systems, and pay to win in mobile games, in-app purchase system in the … [+]GETTY

Loot Boxes Generate Huge Profits For The Video Game Industry

Recent research suggests that the video gaming industry generated up to $30 billion from loot boxes in 2018. Major games studios like Ubisoft and Take-Two Interactive rely on these tactics for a majority of their corporate revenue. Yet these studios’ revenue may be disproportionately impacting a small number of gamers- over 90% of this revenue is generated from a small number of gamers who are called “whales.” These “whales,” or gamers who spend disproportionate amounts on in-game purchases, may be already exhibiting concerning gambling behavior, even if they are under-age.

Loot Boxes Simulate Gambling Behavior

According to addictions researchers, loot boxes create dynamics similar to gambling behavior. In a recent survey of adolescents by these Central Queensland University researchers, they found that a majority of the best-selling video games had loot boxes, that almost all adolescents aged 12-17 or 18-24 had played a game with loot boxes, and that the average 12- to 17-year-old spent on average $50 per month on loot boxes. The average 18- to 24-year-old spent on average $72 per month on loot boxes. Importantly, this same research showed that loot box purchases significantly increased the odds of problem gambling later.

Analyses of motivations for gamers to purchase loot boxes mirror common reasons for gambling: gamers are exchanging money or something of value in an attempt to influence a future event, the outcome of that future event is not known at the time of the transaction, and chance at least partly determines the outcome. When games are designed to maximize spending as a perceived path to victory within the game, gamers may feel forced to engage in gambling behavior in order to progress.

Loot Box Spending May Lead To Problem Gambling

Emerging research suggests that loot box purchases and similar gambling behavior among children or teens can lead to problem gambling later in life. These activities seem fun and harmless, potentially normalizing risky behavior. Given that many games targeting children (such as Pokemon franchise games) contain these mechanics, parents must be aware of this potential concern and monitor spending in games, ideally requiring parental permission to make any purchases, talking to your children about how gambling works, and watching for problem gambling behavior such as changes in money, changes in behavior and irritability when away from gaming, secrecy, and changes in school performance or social activities. If you are concerned your child has a problem, there are many addiction resources online, including helplines from SAMHSA , the National Council on Problem Gambling , and state helplines.

View on the Forbes Sportsmoney web site