Loot box brouhaha: Are video games becoming too much like gambling?

One of the most enticing elements of Overwatch, the massively popular multiplayer shooter that launched in 2016, are its loot boxes.

Every time you level up, you are rewarded with an unassuming, gunmetal grey crate. When you hold down a button to open it, the box begins to tremble and a bright ray of golden light spills out of the top.

The box opens, launching four tiny discs high into the air and revealing prizes such as alternate costumes or dance animations for your characters.

It's a sensory rush of anticipation and excitement not unlike the thrill of ripping open the foil wrapper on a pack of Pokemon trading cards or rolling up the rim at Tim Hortons.

But this thrill has led to an uncomfortable tension. While you can earn a loot box by simply playing for an hour or so, you can also just buy them.

Loot boxes aren't strictly new. Similar micro-transaction systems are a regular feature of smartphone games that are initially free-to-play. But unlike free-to-play games, where players might chip in a few dollars for a game they enjoy, loot boxes are being introduced in games that already sell at a retail price of $80 Cdn.

Gamers have become increasingly critical of highly anticipated new releases — such as Forza Motorsport 7, Middle-Earth: Shadow of War and Star Wars Battlefront II — locking items and features that in previous instalments were free.

Many players have likened it to gambling — and some are even calling for government regulation on the matter.

'I've seen people literally spend $15,000'

Usually, loot boxes are paid for with virtual, in-game currency that you buy with real money. In Middle-Earth: Shadow of War, for example, you can buy a Gold War Chest, which contains Orc Followers to add to your army, for 200 Gold. You can buy a minimum of 500 Gold for $6.99 on the PlayStation Store, or in bulk packages all the way up to 12,000 Gold for $133.49.

Forza Motorsport 7 is a little more complicated. Right now, you can only earn loot boxes by playing the game. But Microsoft's Turn 10 Studios told Ars Technica it plans to add real-money options to buy them in the future.

Electronic Arts' sports games include an entire mode that revolves around loot boxes. The popular Ultimate Team mode, where players can buy and open digital trading card packs of players, earns the publisher $800 million US a year.

Manveer Heir, a game designer who previously worked with EA, told Vice's gaming site Waypoint he had seen people "literally spend $15,000 on Mass Effect multiplayer cards." He cited this as an example of a "whale," or a player who spends far more than the average.

Jamie Madigan, a psychologist and author of Getting Gamers: The Psychology of Video Games and their Impact on the People Who Play Them, said that extra step of buying virtual currency is key in getting you to ultimately spend more.

"When you decouple the pain of spending money from the pleasure of getting the thing, people tend to spend more money. It sort of obfuscates how much money they're spending. And people are lazy, so they don't do to the mental conversion from Gold Coins and Diamonds to dollars. So they lose track of how much they've spent, and they spend more."

Many industry analysts and psychologists agree that loot boxes and casino gambling use comparable tactics.

"I personally would argue that they are a form of gambling," said Betsy Brey, games researcher and editor of First Person Scholar. "It very much plays into the gambler's fallacy: 'Well, I've been unlucky 10 times, so maybe on the 11th time, the chances have to be in my favour soon.'"

Gabe Zichermann, an expert in gamification and people's addiction to technology, said loot boxes use "operant conditioning," doling out the most coveted rewards at irregular intervals, preventing us from recognizing a pattern.

"It is literally, exactly, a slot machine," said Zichermann. "They're all based on the same basic fundamental behaviour pattern: When people cannot predict how much they're going to get, they often get very focused and fixated on it, and want to do it over and over again, past the point of rationality."

Call for regulation

Some gamers, including a number of prominent gaming personalities on YouTube and Twitch, have called for either games ratings boards like the ESRB or even governments to regulate them like gambling in casinos.

Fan outcry became louder when boxes started including items that can give you a competitive advantage over other players online — such as a stronger weapon or armour modifications in Star Wars Battlefront II. This is often referred to as a "pay to win" situation.

"ESRB does not consider loot boxes to be gambling," the North American games ratings organization told Kotaku. "While there's an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don't want)."

The European games ratings board PEGI echoed that statement. "It's not up to PEGI to decide whether something is considered gambling or not — this is defined by national gambling laws," a representative told Eurogamer.

The discussion has even reached the British Parliament, after an MP asked the government "to help protect vulnerable adults and children from illegal gambling, in-game gambling and loot boxes within computer games." The government replied by saying only games where items can be exchanged for real money would fall under the purview of Britain's Gambling Commission.

Meanwhile, China's ministry of culture instituted new rules for online gaming this spring, forcing game developers to reveal the odds and drop rates of items in their loot boxes. But this only applies to that geographic region — a Chinese player's odds of getting a rare item in Overwatch or League of Legends could be different from the undisclosed rates of players in another country.

Skyrocketing budgets

According to developer Rami Ismail, whether you want to buy them or not, loot boxes change the design of a game.

"If you add loot boxes, you're gonna have to adjust the game's economy, and the game's design, to make those interesting. Which means that you're effectively designing a game for things that aren't in it — unless you pay," he said.

A report by Rolling Stone revealed that games publisher Activision is experimenting with how this might work. They were granted a patent for a system that would engineer scenarios in multiplayer online games that entice players to buy more in-game content.

One scenario sketched out in the patent would pair a novice player with an expert who uses higher-level equipment — the aim being to entice the novice into buying loot boxes that might have better-quality gear, like their opponent.

Discontented gamers will likely have to get used to loot boxes for the foreseeable future. As the scope and emphasis on graphics quality in games increases, the cost of making them has skyrocketed.

"Loot boxes are effectively an SOS from the industry. The business models that we have do not work," said Ismail.

"The demands are up and the budgets are up, but the business model doesn't allow for growth. No gamer would accept a base game that was $120 — well, very few would. But that's really where we are. That's why you pay $60 (US) for a game and $30 for a season pass, and then $15 for the expansions that come after it, and some micro transactions just to cover that last part."