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In
video game Video games, also known as computer games, are electronic games that involves interaction with a user interface or input device such as a joystick, controller, keyboard, or motion sensing device to generate visual feedback. This fee ...
s, a loot box (also called a loot crate or prize crate) is a consumable virtual item which can be redeemed to receive a randomised selection of further virtual items, or loot, ranging from simple customization options for a player's
avatar Avatar (, ; ), is a concept within Hinduism that in Sanskrit literally means "descent". It signifies the material appearance or incarnation of a powerful deity, goddess or spirit on Earth. The relative verb to "alight, to make one's appearanc ...
or character to game-changing equipment such as weapons and armor. A loot box is typically a form of monetisation, with players either buying the boxes directly or receiving the boxes during play and later buying "keys" with which to redeem them. These systems may also be known as ''gacha'' (based on – capsule toys) and integrated into ''gacha'' games. Loot box concepts originated from
loot system In video games, loot is the collection of Item (gaming), items picked up by the player character that increase their power or level up their abilities, such as In-game currency, currency, magic (gaming), spells, equipment and weapons. Loot is mea ...
s in massively multiplayer online role-playing games, and from the monetisation of
free-to-play Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which ...
mobile gaming A mobile game, or smartphone game, is a video game that is typically played on a mobile phone. The term also refers to all games that are played on any portable device, including from mobile phone (feature phone or smartphone), tablet, PDA to h ...
. They first appeared in 2004 through 2007, and have appeared in many free-to-play games and in some full-priced titles since then. They are seen by developers and publishers of video games not only to help generate ongoing revenue for games while avoiding drawbacks of paid
downloadable content Downloadable content (DLC) is additional content created for an already released video game, distributed through the Internet by the game's publisher. It can either be added for no extra cost or it can be a form of video game monetization, enablin ...
or game subscriptions, but to also keep player interest within games by offering new content and cosmetics through loot-box reward systems. Loot boxes were popularised through their inclusion in several games throughout the mid-2010s. By the later half of the decade, some games, particularly '' Star Wars Battlefront II'', expanded approaches to the concept that caused them to become highly criticised. Such criticism included "
pay to win Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which ...
" gameplay systems that favor those that spend real money on loot boxes and negative effects on gameplay systems to accommodate them, as well as them being anti-consumer when implemented in full-priced games. Due to fears of them being used as a source in gray-market
skin gambling In video games, skin gambling is the use of virtual goods, often cosmetic in-game items such as "Skin (computing)#Video gaming, skins", as virtual currency to bet on the outcome of eSports, professional matches or on other games of chance. It is ...
, loot boxes began to become regulated under national
gambling law Gaming law is the set of rules and regulations that apply to the gaming or gambling industry. Gaming law is not a branch of law in the traditional sense but rather is a collection of several areas of law that include criminal law, regulatory law, c ...
s in various countries at the same time.


Design

A "loot box" can be named several different ways, usually related to the type of game that it appears in. A "loot box", "loot crate" or "lockbox" is often applied to shooter games since one obtains new equipable outfits or gear from it. Digital card games may use the term "
booster pack In collectible card games, digital collectible card games and collectible miniature wargames, a booster pack is a sealed package of cards or figurines, designed to add to a player's collection. A box of multiple booster packs is referred to as a b ...
" following from
collectible card game A collectible card game (CCG), also called a trading card game (TCG) among other names, is a type of card game that mixes strategy game, strategic deck building elements with features of trading cards, introduced with ''Magic: The Gathering'' in ...
roots. Loot boxes are often given to players during play, for instance as rewards for leveling up their character or completing a
multiplayer A multiplayer video game is a video game in which more than one person can play in the same game environment at the same time, either locally on the same computing system (couch co-op), on different computing systems via a local area network, or ...
game without quitting. Loot boxes may also be given out through promotions outside of gameplay, such as watching certain streaming events. Players can also buy them directly, most often with real-world funds but also through in-game currency (sometimes, in-game currency can or has to be paid for with real-world funds to obtain lootboxes). Some loot boxes can be redeemed immediately, while redeeming others requires further consumable items dressed as "keys". Loot boxes are generally redeemed through an in-game interface which dresses the process with appealing visual and audio effects. Some such interfaces are explicitly modeled on
slot machine A slot machine (American English), fruit machine (British English) or poker machine (Australian English and New Zealand English) is a gambling machine that creates a game of chance for its customers. Slot machines are also known pejoratively a ...
s or
roulette wheel Roulette is a casino game named after the French word meaning ''little wheel'' which was likely developed from the Italian game Biribi''.'' In the game, a player may choose to place a bet on a single number, various groupings of numbers, the ...
s, designed to create a psychological response to increase player excitement. When the player runs out of loot boxes or keys, a prominent button may be displayed with which they can buy more. The items that can be granted by a loot box are usually graded by "rarity", with the probability of receiving an item decreasing rapidly with each grade. While the set of items given are randomly selected it can come with certain guarantees, for instance that it will contain at least one item of a certain rarity or above. In some redemption processes, yet-revealed items are presented with a colour that corresponds to its rarity level, further heightening the excitement of revealing the items. Some game systems include a "pity-timer" mechanic, which increases the player's chances to receive a rarer item from a loot box if the player has not received one in the last several loot boxes they have opened. This pity-timer mechanic may also be used if the player purchases loot boxes in bulk rather than individually, such that one of the loot boxes in the bulk purchase is assured of having a rarer item. The player's inventory is managed in server databases run by the game's developers or publishers. This may allow for players to view the inventory of other players and arrange for trades with them. Items obtained from loot boxes and equipped or used by the player's character are nearly always visible to all other players during the course of a game, such as seeing a character skin or hearing a voice line. Most loot-box systems grant items without regard for what the player already owns. Means are provided to dispose of these duplicates, often involving trading them with other players or converting them into an in-game currency. Some loot-box systems allow players to then use this currency to directly purchase specific items they do not have. Some loot-box systems, primarily from Asian developers, use an approach adapted from ''
gashapon , also called , is a trademark of Bandai. Among the variety of vending machine-dispensed capsule toys that originated in the 1960s, it became popular in Japan and elsewhere. "Gashapon" is onomatopoeic from the two sounds "gasha" (or "gacha") f ...
'' (capsule toy) vending machines. These
gacha game A is a video game that implements the (toy vending machine) mechanic. Similar to loot boxes, gacha games entice players to spend in-game currency to receive a random in-game item. Some in-game currency generally can be gained through game play ...
s offer "spins" (analogous to turning the crank of a capsule machine) to get a random item, character, or other virtual good. One form of gacha called "
complete gacha A is a video game that implements the (toy vending machine) mechanic. Similar to loot boxes, gacha games entice players to spend in-game currency to receive a random in-game item. Some in-game currency generally can be gained through game pl ...
" allows players to combine common items in a set in order to form a rarer item. The first few items in a set can be rapidly acquired but as the number of missing items decreases it becomes increasingly unlikely that redeeming a loot box will complete the set. This is particularly true if there are a large number of common items in the game, since eventually one single, specific item is required. This particular practice was
banned A ban is a formal or informal prohibition of something. Bans are formed for the prohibition of activities within a certain political territory. Some bans in commerce are referred to as embargoes. ''Ban'' is also used as a verb similar in meaning ...
in Japan by the
Consumer Affairs Agency The is an administrative agency of the Cabinet Office of Japan responsible for consumer protection established on September 1, 2009. Under the law passed on December 10, 2022, the Consumer Affairs Agency now also has jurisdiction over the issue ...
in 2012, though gacha games at large remain. Some games may include seasonal or special event loot boxes which include specific items only available during the time of that event. In the case of digital collectible card games which rotate expansions in and out as part of keeping a viable meta-game, booster packs of a certain expansion may only be purchasable while that expansion is considered in standard play, and once it is "retired", these cards can no longer be earned in packs, though still may be gained from the use of in-game currency and used outside standard play.


History

Loot boxes are an extension of randomised loot drop systems from earlier video games, frequently used to give out randomised rewards in
massively multiplayer online role-playing games A massively multiplayer online role-playing game (MMORPG) is a video game that combines aspects of a role-playing video game and a massively multiplayer online game. As in role-playing games (RPGs), the player assumes the role of a character (of ...
(MMO or MMORPG) or similar games. Loot boxes took this approach and formulated a monetisation approach used by
free-to-play Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which ...
games in
mobile gaming A mobile game, or smartphone game, is a video game that is typically played on a mobile phone. The term also refers to all games that are played on any portable device, including from mobile phone (feature phone or smartphone), tablet, PDA to h ...
. Loot boxes also incorporate elements of the randomness of acquiring ''
gachapon , also called , is a trademark of Bandai. Among the variety of vending machine-dispensed bulk vending, capsule toys that originated in the 1960s, it became popular in Japan and elsewhere. "Gashapon" is Onomatopoeia, onomatopoeic from the two sou ...
'' capsule toys. The first known instance of a loot-box system is believed to be an item called "Gachapon ticket" which was introduced in the Japanese version of ''
MapleStory ''MapleStory'' () is a free-to-play, 2D, side-scrolling massively multiplayer online role-playing game, developed by South Korean company Wizet. Several versions of the game are available for specific countries or regions, published by vario ...
'', a side-scrolling MMORPG, in June 2004. Such tickets were sold at the price of 100
Japanese yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the ...
per ticket. Like real-life gachapon machines, players attained randomly chosen game items when they used the ticket on "Gachapon", an in-game booth that was distributed across the game world. The Chinese
free-to-play Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which ...
game '' ZT Online'' (or simply ''Zhengtu'') which was released in 2007 by the Zhengtu Network is also considered to be one of the early examples of video games that contained loot boxes as a part of its game system. Players in Asian countries typically do not have the funds to purchase full-cost titles, and use Internet cafes or PC bangs to play the game for free, or resort to
copyright infringement Copyright infringement (at times referred to as piracy) is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, s ...
to obtain copies of games for free. Instead of trying to change this approach, Asian games like ''ZT Online'' introduced loot boxes as a means to assure monetisation from a game that they would otherwise not receive revenue from the base sale. Within a year, Zhengtu Network reported monthly revenue from ''ZT Online'' exceeding , justifying the profitability of this scheme. This led to the approach of releasing games as free-to-play with
microtransactions Microtransactions, often abbreviated as mtx, are a business model where users can purchase virtual goods with micropayments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers. While microtransact ...
atop the title. Many free-to-play mobile games in Asian regions would offer loot-box approaches, most notably ''
Puzzle & Dragons is a puzzle video game with role-playing and strategy elements, developed and published by GungHo Online Entertainment for the iOS, Android, and Amazon Fire platforms. ''Puzzle & Dragons'' is a match-three puzzle game, requiring players t ...
'', released in 2011, which used its gacha approach to be the first mobile game to earn more than from its monetisation scheme. In Western regions (North America and Europe) around 2009, the video game industry saw the success of
Zynga Zynga Inc. () is an American developer running social video game services. It was founded in April 2007, with headquarters in San Mateo, California. The company primarily focuses on mobile and social networking platforms. Zynga states its missio ...
and other large publishers of
social-network game A social network game (sometimes simply referred to as a social media game, social gaming, social video game or online social game) is a type of online game that is played through social networks or social media. They typically feature multiplayer ...
s that offered the games for free on sites like
Facebook Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
but included microtransactions to accelerate one's progress in the game, providing that publishers could depend on revenue from post-sale transactions rather than initial sale. One of the first games to introduce loot box-like mechanics was '' FIFA 09'', made by
Electronic Arts Electronic Arts Inc. (EA) is an American video game company headquartered in Redwood City, California. Founded in May 1982 by Apple employee Trip Hawkins, the company was a pioneer of the early home computer game industry and promoted the d ...
(EA), in March 2009 which allowed players to create a team of
association football Association football, more commonly known as football or soccer, is a team sport played between two teams of 11 players who primarily use their feet to propel the ball around a rectangular field called a pitch. The objective of the game is ...
players from in-game card packs they opened using in-game currency earned through regular playing of the game or via microtransactions. Another early game with loot box mechanics was ''
Team Fortress 2 ''Team Fortress 2'' is a 2007 multiplayer first-person shooter, first-person shooter game developed and published by Valve Corporation. It is the sequel to the 1996 ''Team Fortress'' Mod (video gaming), mod for ''Quake (video game), Quake'' and ...
'' in September 2010, when
Valve A valve is a device or natural object that regulates, directs or controls the flow of a fluid (gases, liquids, fluidized solids, or slurries) by opening, closing, or partially obstructing various passageways. Valves are technically fittings ...
added the ability to earn random "crates" to be opened with purchased keys. Valve's Robin Walker stated that the intent was to create "network effects" that would draw more players to the game, so that there would be more players to obtain revenue from the keys to unlock crates. Valve later transitioned to a free-to-play model, reporting an increase in player count of over 12 times after the transition, and hired
Yanis Varoufakis Ioannis "Yanis" Varoufakis ( el, Ιωάννης Γεωργίου "Γιάνης" Βαρουφάκης, Ioánnis Georgíou "Giánis" Varoufákis, ; born 24 March 1961) is a Greek economist and politician. A former academic, he served as the Gree ...
to research
virtual economies A virtual economy (or sometimes synthetic economy) is an emergence, emergent economics, economy existing in a virtual world, usually exchanging virtual goods in the context of an online game, particularly in massively multiplayer online games (M ...
. Over the next few years many MMOs and
multiplayer online battle arena Multiplayer online battle arena (MOBA) is a subgenre of strategy video games in which two teams of players compete against each other on a predefined battlefield. Each player controls a single character with a set of distinctive abilities that im ...
games (MOBAs) also transitioned to a free-to-play business model to help grow out their player base, many adding loot-box monetisation in the process, with the first two being both ''
Star Trek Online ''Star Trek Online'' is a massively multiplayer online role-playing game (MMORPG) developed by Cryptic Studios based on the ''Star Trek'' franchise. The game is set in the 25th century, 30 years after the events of '' Star Trek: Nemesis''. ''Sta ...
'' and ''
The Lord of the Rings Online ''The Lord of the Rings Online'' is a massively multiplayer online role-playing game (MMORPG) for Microsoft Windows and OS X set in J. R. R. Tolkien's Middle-earth, taking place during the time period of ''The Lord of the Rings''. Originally d ...
'' in December 2011. Separately, the ''
FIFA FIFA (; stands for ''Fédération Internationale de Football Association'' ( French), meaning International Association Football Federation ) is the international governing body of association football, beach football and futsal. It was found ...
'' series included a "FIFA Ultimate Team Mode" that allowed players to use virtual trading cards to build a team. Initially released as downloadable content, the "FIFA Ultimate Team Mode" transitioned to a free add-on to the base game with the 2010 release, with the ability to buy card packs as a means to generate revenue for the game. EA took the success of this transition for ''
Mass Effect 3 ''Mass Effect 3'' is an action role-playing video game developed by BioWare and published by Electronic Arts. The third major entry in the ''Mass Effect'' series and the final installment of the original trilogy, it was released in March 2012 fo ...
'' in March 2012. ''Mass Effect 3'' offered "packs" that would offer uncommon gear, otherwise obtainable only by "
grinding Grind is the cross-sectional shape of a blade. Grind, grinds, or grinding may also refer to: Grinding action * Grinding (abrasive cutting), a method of crafting * Grinding (dance), suggestive club dancing * Grinding (video gaming), repetitive and ...
" through online gameplay. According to the game's producer Jesse Houston, these were used as a means to offset the development cost of the game's multiplayer mode. The ''Mass Effect 3'' team worked closely with the ''FIFA'' team to get the rollout of these packs right, which Houston compared to opening a ''
Magic: The Gathering ''Magic: The Gathering'' (colloquially known as ''Magic'' or ''MTG'') is a Tabletop game, tabletop and Digital collectible card game, digital Collectible card game, collectable card game created by Richard Garfield. Released in 1993 by Wizards ...
'' booster card pack to make a player feel like they were always getting value from the pack. Other early examples of packaged games with loot boxes included '' Counter-Strike: Global Offensive'' in August 2013, adding "weapon cases" in an update, and ''
Battlefield 4 ''Battlefield 4'' is a 2013 first-person shooter video game developed by DICE and published by Electronic Arts. The game was released in October and November for Microsoft Windows, PlayStation 3, Xbox 360, PlayStation 4, and Xbox One, and is the ...
'' in October 2013, adding "battlepacks", though they did not become purchasable until May 2014 and never granted duplicate items. '' Call of Duty: Advanced Warfare'', released in November 2014, included "supply drops" that contained randomised items including different variants of the game's weapons, character gear, and
experience point An experience point (often abbreviated as exp or XP) is a unit of measurement used in some tabletop role-playing games (RPGs) and role-playing video games to quantify a player character's life experience and progression through the game. Experi ...
s that could be used to customise one's character. With the financial success of ''
Overwatch ''Overwatch'' is a multimedia franchise centered on a series of online multiplayer first-person shooter (FPS) video games developed by Blizzard Entertainment: ''Overwatch'' released in 2016, and ''Overwatch 2'' released in 2022. Both games fea ...
'' and its loot-box systems, several games—particularly from popular franchises—in 2016 and 2017 included the mechanic as part of its meta-game. This included '' Call of Duty: WWII'', ''
Halo Wars 2 ''Halo Wars 2'' is a real-time strategy video game developed by 343 Industries and Creative Assembly. It was published by Microsoft Studios and released in February 2017 on Windows and Xbox One. The game is set in the science fiction universe ...
'', ''
Gears of War 4 ''Gears of War 4'' is a 2016 third-person shooter video game developed by The Coalition and published by Microsoft Studios for Windows and Xbox One. It is the fourth main installment in the ''Gears of War'' series, and the first mainline entry n ...
'', ''
Assassin's Creed Origins ''Assassin's Creed Origins'' is a 2017 action role-playing video game developed by Ubisoft Montreal and published by Ubisoft. It is the tenth major installment in the ''Assassin's Creed'' series, following 2015's ''Assassin's Creed Syndicate''. ...
'', '' Middle-earth: Shadow of War'', and '' Forza Motorsport 7''. By October 2017, this had led to critical review of the practice. In particular, the highly-visible '' Star Wars Battlefront II'', released amid criticism of its loot-box systems in November 2017, led to renewed discussions at various government levels related to the legality of these systems. The review aggregator
OpenCritic OpenCritic is a review aggregation website for video games. OpenCritic lists reviews from critics across multiple video game publications for the games listed on the site. The website then generates a numeric score by averaging all of the numeric ...
announced plans to include a "business model intrusiveness" for games that provide a metric on how much a game's loot and DLC system can impact the game. The reaction to loot boxes in the last half of 2017 was considered one of the major trends in the video game industry in 2017.


Criticism


Player expenditures and gambling concerns

Loot boxes are considered part of the
compulsion loop A compulsion loop or core loop is a habitual chain of activities that will be repeated by the user to cause them to continue the activity. Typically, this loop is designed to create a neurochemical reward in the user such as the release of dopamin ...
of game design to keep players invested in a game. Such compulsion loops are known to contribute towards
video game addiction Video game addiction (VGA), also known as gaming disorder or internet gaming disorder, is generally defined as the problematic, compulsive use of video games that results in significant impairment to an individual's ability to function in vario ...
and are frequently compared to
gambling addiction Problem gambling or ludomania is repetitive gambling behavior despite harm and negative consequences. Problem gambling may be diagnosed as a mental disorder according to ''DSM-5'' if certain diagnostic criteria are met. Pathological gambling is ...
. This is in part due to the use of a " variable-rate reinforcement schedule" similar to how
slot machine A slot machine (American English), fruit machine (British English) or poker machine (Australian English and New Zealand English) is a gambling machine that creates a game of chance for its customers. Slot machines are also known pejoratively a ...
s dole out prizes. While many players may never spend real-world money in a loot-box system, such addictive systems can bring large monetary expenditures from "whales", players who are willing to spend large amounts of money on virtual items. Gambling concerns are heightened in games that offer loot boxes and are known to be played by children. Loot boxes also feed into the social anxiety around the "
fear of missing out Fear of missing out (FOMO) is the feeling of apprehension that one is either not in the know or missing out on information, events, experiences, or life decisions that could make one's life better. FOMO is also associated with a fear of regret, ...
" (FOMO), as some random drops from loot boxes may be available for only a limited time, and players will be more inclined to spend money to obtain loot boxes so they do not miss out on these items. The use of pity-timers in loot box redemption also can feed into the gambler's fallacy, appearing to give credence to the player that they will be assured of a high-rarity item if they open enough loot boxes. Video games have generally been considered
games of skill A game of skill or game of wits is a game where the outcome is determined mainly by mental or physical skill, rather than chance. Alternatively, a game of chance is one where its outcome is strongly influenced by some randomizing device, such ...
rather than
games of chance A game of chance is in contrast with a game of skill. It is a game whose outcome is strongly influenced by some randomizing device. Common devices used include dice, spinning tops, playing cards, roulette wheels, or numbered balls drawn from ...
and thus are unregulated under most gambling laws, but researchers from New Zealand and Australia, writing in ''Nature Human Behaviour'' in 2018, concluded that "loot boxes are psychologically akin to gambling". A separate report from researchers in England in 2021 also concluded that loot boxes "are structurally and psychologically akin to gambling". Proponents for the use of loot boxes have countered complaints that they are gambling systems by likening them to opening collectible toys such as
Hatchimals Hatchimals is a line of mini-figures produced by Spin Master. The flagship toys feature a robotic creature—representing one of various species—that "hatch" themselves from an egg. After their initial release in October 2016, the toys faced a ...
or booster packs from physical
collectible card game A collectible card game (CCG), also called a trading card game (TCG) among other names, is a type of card game that mixes strategy game, strategic deck building elements with features of trading cards, introduced with ''Magic: The Gathering'' in ...
s (CCGs) like ''
Magic: the Gathering ''Magic: The Gathering'' (colloquially known as ''Magic'' or ''MTG'') is a Tabletop game, tabletop and Digital collectible card game, digital Collectible card game, collectable card game created by Richard Garfield. Released in 1993 by Wizards ...
''. In the United States CCGs have been subject to previous legal challenges related to if they are a form of gambling, but were not found liable. Some countries like Belgium have specifically exempted CCGs from gambling legislation because these games do not offer any type of gambling element. However, opponents of loot boxes address the fact that the process of opening a digital loot box is designed around a sensory experience and immediate return that can affect those that may be prone to gambling, a factor that does not exist with physical booster packs. Some have argued the increased use of loot boxes in games since ''FIFA'' was due to the perception that the act of opening loot boxes is an exciting element for a game for both the player, and those watching the player either on
YouTube YouTube is a global online video platform, online video sharing and social media, social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by ...
videos or through
live streaming Livestreaming is streaming media simultaneously recorded and broadcast in real-time over the internet. It is often referred to simply as streaming. Non-live media such as video-on-demand, vlogs, and YouTube videos are technically streamed, but no ...
, creating a number of multi-million subscriber video streams solely dedicated to opening loot boxes.
NPD Group The NPD Group, Inc. (NPD; formerly National Purchase Diary Panel Inc. and NPD Research Inc.) is an American market research company founded on September 28, 1966, and based in Port Washington, New York. In 2017, NPD ranked as the 8th largest mar ...
, which tracks video game sales, says that for games released through September 2017, there was no sign of consumer purchase change, positively or negatively, on games that included loot boxes. NPD reported that ''NBA 2K18'', which had been criticised by players for its loot-box system at its September 2017 launch, ended up as the best-selling game in North America for that month. Juniper Research estimated that the global video game market, worth around in 2017, is set to grow to about by 2022, buoyed by the increased use of loot boxes, particularly within China. For these reason, some developers see loot boxes as an essential means to monetise games, knowing that there will always be players willing to buy these even if most others do not. Games with randomised in-game rewards, including those from loot boxes, and which offer the means to trade these items with other players, are known to attract the use of
skin gambling In video games, skin gambling is the use of virtual goods, often cosmetic in-game items such as "Skin (computing)#Video gaming, skins", as virtual currency to bet on the outcome of eSports, professional matches or on other games of chance. It is ...
. In skin gambling, these customization items, "skins", become a
black market A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the se ...
virtual currency among players and operators of websites that allow players to trade the items for real-world funds, or to use those items to gamble on
esports Esports, short for electronic sports, is a form of competition using video games. Esports often takes the form of organized, multiplayer video game competitions, particularly between professional players, individually or as teams. Although orga ...
or other
games of chance A game of chance is in contrast with a game of skill. It is a game whose outcome is strongly influenced by some randomizing device. Common devices used include dice, spinning tops, playing cards, roulette wheels, or numbered balls drawn from ...
; subsequently these activities have been identified as gambling by legal authorities, and several legal challenges arose in the last half of 2016 to stop this practice. Valve's '' Counter-Strike: Global Offensive'', updated in 2013 to include randomised loot drops from in-games, has been the most visible example of skin gambling by mid-2016. Several games which followed in 2016 and onward that used loot boxes or other randomised rewards, including ''
Rocket League ''Rocket League'' is a vehicular soccer video game developed and published by Psyonix. The game was first released for Windows and PlayStation 4 in July 2015, with ports for Xbox One and Nintendo Switch being released later on. In June 2016, ...
'' and ''
PlayerUnknown's Battlegrounds ''PUBG: Battlegrounds'' (previously known as ''PlayerUnknown's Battlegrounds'') is a battle royale game developed by PUBG Studios and published by Krafton. The game, which was inspired by the Japanese film '' Battle Royale'' (2000), is based ...
'', did not include the ability to trade items or placed limits on trades, thus eliminating skin gambling from these games.


Impact on game design

Some loot-box systems within free games are criticised as "pay-to-win" systems, and may be derogatorily referred to as "pay-to-loot". In these cases, the contents of the loot box contain items, beyond superficial customization options, which directly affect gameplay, such as booster packs for a digital collectible card game, and with the impact on gameplay proportional to the item's rarity. This can tie the quality of a player's ability to compete with others to the random generation systems of the loot pack, and may drive players into paying for additional loot boxes to obtain high-rarity items to fairly compete with others.
Blizzard A blizzard is a severe snowstorm characterized by strong sustained winds and low visibility, lasting for a prolonged period of time—typically at least three or four hours. A ground blizzard is a weather condition where snow is not falling b ...
's digital card game ''
Hearthstone ''Hearthstone'' is a free-to-play online digital collectible card game developed and published by Blizzard Entertainment. Originally subtitled ''Heroes of Warcraft'', ''Hearthstone'' builds upon the existing lore of the ''Warcraft'' series by u ...
'', released in 2014, is frequently considered to require financial expenditure in booster packs to be a successful player. To minimize the effect of pay-to-win in ''Hearthstone'', Blizzard implemented its Standard gameplay mode to only allow players to use cards from the core set or from any expansion released in the prior two year prior, helping to give newer players a better chance to compete against experienced players who may already have all prior card sets. Some commentators expressed concern that for these types of loot-box models to be successful for the publishers, the game itself has to be designed around promoting and encouraging the player to purchase loot boxes, which fundamentally impacts core game design principles and may weaken the underlying game mechanics. This may include the use of loot boxes as a means to bypass the need to grind missions repeatedly to get gameplay-changing items that significantly help towards completing a single-player game, which drives players to use real money to purchase these to avoid the time sink. For example, '' Middle-earth: Shadow of War'' has a second, true ending requiring the player to gain many more stronger allies to meet its higher difficulty. While the developers playtested the balance of the game without the loot-box system activated, assuring the game could be completed without additional monetisation, reviewers found that the game required a great deal of time needed to complete numerous additional missions for the chance to acquire stronger allies, and with the consistent presence of the in-game market for loot boxes, made it difficult to avoid the allure of paying real money to bypass this grinding, creating a negative on the overall experience. The presentation of a storefront within a game which allows one to use real-world funds to purchase loot boxes or other equipment can also impact the sense of immersion a player has with a game. By July 2018, the developers of ''Shadow of War'' had released patches that completely removed the in-game storefront and loot-box system.


Incentives for monetisation

The implementation of some loot-box systems are considered anti-consumer by some players and commentators. Full-priced games which already provide
downloadable content Downloadable content (DLC) is additional content created for an already released video game, distributed through the Internet by the game's publisher. It can either be added for no extra cost or it can be a form of video game monetization, enablin ...
and then include a loot-box system have been heavily criticised by players. Some gaming journalists identify the inclusion of loot boxes in multiplayer games as a justified part of the publisher's cost for maintaining the game servers, but see their use in single-player games as only a means for the publishers to profit. Developers and publishers consider loot boxes part of a necessary process of monetising
AAA AAA, Triple A, or Triple-A is a three-letter initialism or abbreviation which may refer to: Airports * Anaa Airport in French Polynesia (IATA airport code AAA) * Logan County Airport (Illinois) (FAA airport code AAA) Arts, entertainment, and me ...
video games beyond their initial sale. Publishers have been hesitant of raising the base price of AAA games beyond (as of 2017) for fear of immediately losing sales, and instead seek post-release revenue streams to cover the increased costs and pace of the development process, the stagnation in growth in video game audiences, and a shortening window of time in which to gain full-price sales of their games after release. Monetisation schemes like loot boxes can help provide
long tail In statistics and business, a long tail of some probability distribution, distributions of numbers is the portion of the distribution having many occurrences far from the "head" or central part of the distribution. The distribution could involv ...
revenue, well after the release of the game. Post-release monetisation is believed by publishers to be necessary to compete with the
mobile gaming A mobile game, or smartphone game, is a video game that is typically played on a mobile phone. The term also refers to all games that are played on any portable device, including from mobile phone (feature phone or smartphone), tablet, PDA to h ...
sector, which predominantly uses free-to-play monetisation schemes. An analyst for KeyBanc Capital Markets, in the wake of the ''Star Wars Battlefront II'' controversy, said that the price of video games, even with added purchases for loot boxes and micro-transactions, remains lower than other forms of media on a per-hour basis, and that games are generally underpriced for what value they give. Developers noted that the decision to include loot boxes in a game, and how they will be priced in real-world funds, may come from their publisher or upper management, but the implementation of their mechanics, including what they include, how they are doled out, and the like, are frequently set by the developers themselves. Some developers argue that the loot-box approach can mesh well with certain types of games, as long as they are not implemented to be a predatory manner towards consumers, and the decision to implement loot boxes within a game may be chosen by the developers rather than a mandate from the publisher. When the loot-box systems are used principally as a means to gain post-sales revenues rather than as an incentive to continuing playing the game, developers feel this requires them to significantly alter the game design away from challenge in gameplay and onto getting players to spend money. They found that games where the baseline gameplay does not encourage or require spending money for loot boxes, the addition of new content obtained from loot boxes is generally celebrated within that community and may gain brief revenue from that. Further, loot-box systems are generally better handled when their use is determined early in development so the developers can design around it, rather than a last-minute addition. Developers found that the mechanics of loot boxes are more accepted by non-Western audiences and younger Western audiences, where these groups have developed different consumption patterns than older Western players, particularly as a result of growing up playing free-to-play mobile titles.


Specific examples


''Overwatch''

Blizzard Entertainment Blizzard Entertainment, Inc. is an American video game developer and publisher based in Irvine, California. A subsidiary of Activision Blizzard, the company was founded on February 8, 1991, under the name Silicon & Synapse, Inc. by three graduat ...
's ''Overwatch'''s loot box implementation does not impact gameplay, but other aspects of the system are subject to criticism. A free crate is given to the player each time the player reaches enough experience to level-up, but the rate of experience acquisition varies with player skill. While any item contains only cosmetic appeal and has no influence on gameplay, the desire for a specific item creates a strong incentive to purchase additional crates. ''Overwatch'' producer
Jeff Kaplan Jeffrey Kaplan is an American video game designer and former vice president of Blizzard Entertainment, a position he held until he left the company in 2021. He designed elements of ''World of Warcraft'' and is the former lead director of ''Overwa ...
detailed the desire to create an in-game currency allowing players to directly acquire an item independent of luck or skill, but currency is only given to a player after opening a crate. ''Overwatch''
software-as-a-service Software as a service (SaaS ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software. SaaS is cons ...
model delivers continued revenue as Blizzard adds new items to obtain through loot boxes. In response to criticism, Blizzard has made adjustments to its loot box system; for example, reducing the frequency of obtaining duplicate items from loot boxes while attempting to maintain the same in-game currency earning rate in June 2017. Blizzard's CEO
Mike Morhaime Michael "Mike" Morhaime (born November 3, 1967) is an American video game developer and entrepreneur. He is the chief executive officer (CEO) and founder of Dreamhaven, located in Irvine, California. Morhaime is best known as the co-founder and t ...
said that with ''Overwatch'' loot boxes, Blizzard avoided inclusion of pay-to-win, gameplay-changing elements and the ability to convert rewards from loot boxes back into real-world money, and thus "don't think ''Overwatch'' belongs in that
oot box ''The Legend of Zelda: Ocarina of Time'' is an action-adventure game developed and published by Nintendo for the Nintendo 64. It was released in Japan and North America in November 1998, and in PAL regions the following month. ''Ocarina of Tim ...
controversy". Industry analyst
Michael Pachter Michael may refer to: People * Michael (given name), a given name * Michael (surname), including a list of people with the surname Michael Given name "Michael" * Michael (archangel), ''first'' of God's archangels in the Jewish, Christian and ...
speculated that the loot box model of ''Overwatch'' that uses only cosmetic items will become the more preferred method of offering this monetisation in the future. Despite this, ''Overwatch'' system still does not allow players to directly use real-world funds to purchase a specific cosmetic item, and the rate which they earn in-game currency towards loot boxes can be slow, both aspects which contribute towards in-game spending and the potential for gambling. ''
Overwatch 2 ''Overwatch 2'' is a 2022 first-person shooter by Blizzard Entertainment. As a sequel to the 2016 hero shooter ''Overwatch'', the game intends a shared environment for player-versus-player (PvP) modes while introducing persistent cooperative m ...
'', which will release as a free to play title, will not use loot boxes and instead offer new cosmetic items through a battle pass system.


''Star Wars Battlefront II''

Conversely, Electronic Arts' '' Star Wars Battlefront II'', developed by
EA DICE EA Digital Illusions CE AB (trade name: DICE) is a Swedish video game developer based in Stockholm. The company was founded in 1992 and has been a subsidiary of Electronic Arts since 2006. Its releases include the ''Battlefield (video game serie ...
studio and released in November 2017, received heightened attention in the wake of the October 2017 loot-box criticism. Principally an online multiplayer shooter, ''Battlefront II'' was developed to eliminate the "season pass" approach that the original 2015 game had used, which was found to have split the player base over those that paid for the added content and those that did not. Instead, ''Battlefront II'' brought in other micro-transaction schemes that would still allow all players to play together but provided the desired revenue streams for EA. These schemes include a loot-box system providing, among other rewards, "Star Cards" that provide boosts to a specific character class, and which have tiered levels tied to rarity that provide greater boosts. Because these higher-tier Star Cards give direct advantages to players willing to acquire many loot boxes with real money than at the rate one would obtain simply playing the game, its loot-box system at the time of its
open beta A software release life cycle is the sum of the stages of development and maturity for a piece of computer software ranging from its initial development to its eventual release, and including updated versions of the released version to help impro ...
period had been described as one of the more egregious "pay-to-win" systems for a full-price game. EA did re-evaluate this approach in response to criticism, and prior to full release, reworked the loot-box system so that some items still offered in loot boxes like Star Cards could also be earned through other routes such as in-game achievements, in-game currency, or through direct monetary purchase. Just prior to release, members of
EA Access EA Play (formerly EA Access and Origin Access) is a subscription-based video game service from Electronic Arts for the Xbox One, Xbox Series X/S, PlayStation 4, PlayStation 5 and Microsoft Windows platforms, offering access to selected games ...
that had early access to the release version of ''Battlefront'' discovered that its other in-game currency and micro-transaction systems required players to spend numerous hours in game matches to earn credits at a sufficient rate to unlock special hero characters, or alternatively spend real-world funds to buy in-game currency or loot boxes that offered that currency as a possible reward. The combined loot-box and micro-transaction systems, all elements of "pay to win" schemes, drew even more criticism. Just hours before the game's official launch, EA and DICE temporarily disabled all micro-transaction purchases until they figured out a way to offer these systems in a favorable manner for consumers; DICE stated: "We will now spend more time listening, adjusting, balancing, and tuning" before they are reintroduced. According to ''
The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', the decision to remove the micro-transactions just before launch was demanded by
Disney The Walt Disney Company, commonly known as Disney (), is an American multinational mass media and entertainment conglomerate headquartered at the Walt Disney Studios complex in Burbank, California. Disney was originally founded on October ...
, which owns the ''Star Wars'' properties. Disney, knowing the franchise draws in younger players, feared the loot-box systems would contribute towards gambling behavior in children. EA later affirmed its revamped approach to micro-transactions within the game to be released in March 2018, eliminating any pay-to-win elements like Star Cards as potential rewards from loot boxes: Star Cards would otherwise only be earned by an experience-point-based progression in the game, while loot crates would be limited to only cosmetic items or in-game credits to buy these items. The player reaction to ''Battlefront'' loot-box system led to the Belgian Gambling Commission to evaluate the nature of loot boxes specifically in ''Battlefront''. In the United States, it generated legislative debates about a potential sales ban within Hawaii and some other US states. EA has stated that they do not consider the approach of loot boxes in ''Battlefront'' as gambling, as it is strictly an optional feature. The reaction and change to the loot box and monetisation scheme caused sales of ''Battlefront'' to fall from expectations, and EA's stock lost 8% of its value a week after the game's release (equal to about ). Analysts expect that EA will have to re-evaluate how they monetise games in the future to avoid similar backlashes, which may further reduce future revenues. In its fiscal quarter results following the release of ''Battlefront II'', EA reported missing their sales mark of 10 million units by about 10%, which EA
CFO The chief financial officer (CFO) is an officer of a company or organization that is assigned the primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financ ...
Blake Jorgensen attributed to the loot-box controversy over the game. This, coupled with the removal of micro-transactions from the game while they readdressed the loot-box approach, led to the game missing EA's revenue projections for that quarter. In April 2018, EA's Patrick Söderlund stated that the loot-box controversy over ''Battlefront'' impacted the company significantly, which included a reorganisation of executive positions, and that: "For games that come next, for ''Battlefield'' or for ''
Anthem An anthem is a musical composition of celebration, usually used as a symbol for a distinct group, particularly the national anthems of countries. Originally, and in music theory and religious contexts, it also refers more particularly to short ...
'', layers havemade it very clear that we can't afford to make similar mistakes. And we won't."


''FIFA''

Electronic Arts also published the ''
FIFA FIFA (; stands for ''Fédération Internationale de Football Association'' ( French), meaning International Association Football Federation ) is the international governing body of association football, beach football and futsal. It was found ...
'' series of
association football Association football, more commonly known as football or soccer, is a team sport played between two teams of 11 players who primarily use their feet to propel the ball around a rectangular field called a pitch. The objective of the game is ...
games in annual installments, using the appearances and attributes of the real-world athletes in the teams on the league. Part of more recent entries in the system include its "Ultimate Team" mode, where players can form their own teams by collecting "cards" of these players, which have been offered through virtual card packs that can be purchased with in-game currency or real-world funds (Points currency). While this is a similar mechanism to other games using loot box mechanics, the use here is criticised due to the fact that cards earned from one version of the game do not carry over into the next year's version. Thus, players must work to regain a competitive team by re-earning in-game credits or spending more money by buying additional points, with the potential to continue that cycle each year. EA has since implemented Ultimate Team-like mechanics in other sports simulation series, including ''
Madden NFL ''Madden NFL'' (known as ''John Madden Football'' until 1993) is an American football video game series developed by EA Tiburon for EA Sports. It is named after Pro Football Hall of Fame coach and commentator John Madden and sold more than 130 m ...
'', ''
NBA Live ''NBA Live'' is a series of basketball video games published by EA Sports. The series, which debuted in 1994, is the successor to the previous ''NBA Playoffs'' and ''NBA Showdown'' series. Beginning in the late 2000’s, NBA Live sales had drop ...
'', ''
NHL The National Hockey League (NHL; french: Ligue nationale de hockey—LNH, ) is a professional ice hockey league in North America comprising 32 teams—25 in the United States and 7 in Canada. It is considered to be the top ranked professional ...
'', and ''
UFC The Ultimate Fighting Championship (UFC) is an American mixed martial arts (MMA) promotion company based in Las Vegas, Nevada. It is owned and operated by Zuffa, a wholly owned subsidiary of Endeavor Group Holdings. It is the largest MMA ...
''. In 2016, EA reported that revenue from Ultimate Team pack purchases was a year, roughly half of their total revenue from microtransactions across their portfolio, and 30% of their entire digital sales revenue. CBC reported from a leaked 2021 EA presentation of the company's intent to drive ''
FIFA 21 ''FIFA 21'' is an association football simulation video game published by Electronic Arts as part of the ''FIFA series''. It is the 28th installment in the ''FIFA'' series, and was released on 9 October 2020 for Microsoft Windows, Nintendo Switc ...
'' players to the Ultimate Team mode as the "cornerstone" of the game. In a reply, EA stated that they do not "push" players to spend money in their games and that the majority of ''FIFA'' players do not spend any money in-game.


Regulation and legislation

Because of their use of random chance to gain items after committing real-world funds, games using loot boxes may be considered a form of gambling. While gambling laws vary from country to country, a common theme that tends to distinguish loot boxes from gambling is the inability to transform the contents from a loot box back into real-world money by legitimate means within the video game. Games with loot-box systems have become subject to regulation in several Asian countries, while questions of the legality of loot boxes are under consideration in some Western ones. Steven Wright for ''
PC Gamer ''PC Gamer'' is a magazine and website founded in the United Kingdom in 1993 devoted to PC gaming and published monthly by Future plc. The magazine has several regional editions, with the UK and US editions becoming the best selling PC games ma ...
'' observed that several of the concerns for loot boxes related to gambling had been previously experienced through lawsuits in the 1990s against the
baseball card A baseball card is a type of trading card relating to baseball, usually printed on cardboard, silk, or plastic. In the 1950s they came with a stick of gum and a limited number of cards. These cards feature one or more baseball players, teams, sta ...
industry as well as with the physical ''
Pokémon Trading Card Game The , abbreviated as ''PTCG'' or ''Pokémon TCG'', is a collectible card game developed by Creatures Inc. based on the ''Pokémon'' franchise. It was first published in October 1996 by Media Factory in Japan. In the US, it was first published by ...
'', but these cases did not impact either arena to a significant degree.


Asia and Oceania


China

In December 2016, China's
Ministry of Culture Ministry of Culture may refer to: *Ministry of Tourism, Cultural Affairs, Youth and Sports (Albania) *Ministry of Culture (Algeria) *Ministry of Culture (Argentina) * Minister for the Arts (Australia) *Ministry of Culture (Azerbaijan) * Ministry of ...
announced legislation which required "online game publishers" to publicly release from May 2017 onwards the "draw probability of all virtual items and services". When the law came into effect publishers complied, resulting in a variety of statistics being released which quantified the odds of Chinese players receiving different categories of item from each loot box, some of which were as low as 0.1%. Other changes mandated by the new regulations required publishers to limit the number of loot box purchases any player can purchase in a day (including limiting the size of multiple loot box bundle packages), and requiring the publisher to give more favorable odds to the player to get rare items with the number of loot boxes they have opened, effectively assuring a player of receiving a rare item by opening a fixed number of loot boxes. A 2021 paper evaluated the state of many Chinese games that used loot boxes, and found that of the current top 100 games offered on China's Apple App store, 91 of those games included loot boxes but only about 5% of these made full, proper disclosure of loot box probabilities to China's law. The law also banned game publishers from directly selling "lottery tickets" such as loot boxes. In June 2017,
Blizzard Entertainment Blizzard Entertainment, Inc. is an American video game developer and publisher based in Irvine, California. A subsidiary of Activision Blizzard, the company was founded on February 8, 1991, under the name Silicon & Synapse, Inc. by three graduat ...
announced that, "in line with the new laws and regulations", loot boxes in their game ''
Overwatch ''Overwatch'' is a multimedia franchise centered on a series of online multiplayer first-person shooter (FPS) video games developed by Blizzard Entertainment: ''Overwatch'' released in 2016, and ''Overwatch 2'' released in 2022. Both games fea ...
'' would no longer be available for purchase in China. Players would instead buy in-game currency and receive loot boxes as a "gift" for making the purchase. Effective November 2019, China's
General Administration of Press and Publication General Administration of Press and Publication (GAPP; ) is the administrative agency responsible for regulating and distributing news, print and Internet publications in China. This includes granting publication licenses for periodicals and book ...
prohibited the sale of loot boxes to users under eight years of age and restricted their sale to older users under 18 years of age to a maximum monthly spending limit ranging from 200
renminbi The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 2022. ...
to 400 renminbi.


Japan

Following the success of the gacha model from ''Puzzle & Dragons'' in 2011, it became recognised in Japan that the system was essentially gambling, particularly for younger players. By May 2012, Japan's
Consumer Affairs Agency The is an administrative agency of the Cabinet Office of Japan responsible for consumer protection established on September 1, 2009. Under the law passed on December 10, 2022, the Consumer Affairs Agency now also has jurisdiction over the issue ...
banned the practice of "
complete gacha A is a video game that implements the (toy vending machine) mechanic. Similar to loot boxes, gacha games entice players to spend in-game currency to receive a random in-game item. Some in-game currency generally can be gained through game pl ...
", in which a predetermined set of items gained from loot boxes would combine once completed to form a rarer and thus more valuable item. This was done not by introducing any new legislation, but by issuing a legal opinion that virtual items could be considered "prizes" under existing legislation written in 1977 to prevent the complete gacha practice in the context of baseball
trading card A trading card (or collectible card) is a small card, usually made out of paperboard or thick paper, which usually contains an image of a certain person, place or thing (fictional or real) and a short description of the picture, along with other ...
s. Within a month of the opinion being issued, all major Japanese game publishers had removed complete gacha rules from their games, though many developers found ways around these rules. Japanese mobile game developers, including
GREE GREE (derived from an abbreviation of the "Six degrees of separation" concept) is a Japanese social networking service founded by Yoshikazu Tanaka and operated by GREE, Inc. GREE focuses primarily on mobile games and over ninety percent of its ...
and
DeNA Dena (in Luri and fa, ) is the name for a sub-range within the Zagros Mountains, Iran. Mount Dena, with length and average width, is situated on the boundary of the Isfahan, Kohgiluyeh and Boyer-Ahmad and Chaharmahal and Bakhtiari Provin ...
, worked to establish a self-regulating industry group, the Japan Social Game Association. However, this association was disbanded by 2015.


South Korea

In March 2015, members of
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
's
National Assembly In politics, a national assembly is either a unicameral legislature, the lower house of a bicameral legislature, or both houses of a bicameral legislature together. In the English language it generally means "an assembly composed of the repre ...
, led by the
Liberty Korea Party The Liberty Korea Party () was a conservative political party in South Korea that was described variously as right-wing, right-wing populist, or far-right. Until February 2017, it was known as the Saenuri Party (), and before that as the Hanna ...
, proposed amendments to the country's existing games industry regulation that would require games companies to release "information on the type, composition ratio, and acquisition probability" of items granted by loot boxes. Though the amendment did not pass, it led to attempts by the South Korean games industry to self-regulate. This has not convinced assembly members, who have continued to propose statutory regulation. However, there have been several revisions to the self-regulation (most recently, in July 2018), which now requires all video games to clearly display the payout rates of the items from the loot boxes to the player. There are also plans in the near future to expand the scope of this regulation to include other in-game purchases, such as the success rate of a paid consumable item whose purpose is to enhance another virtual item. The Fair Trade Commission still oversees consumer issues related to loot boxes and video games; in April 2018, it issued a fine against
Nexon Nexon Co., Ltd. is a global video game publisher, listed in Japan, that specializes in online Virtual World games for PCs, consoles and mobile. Nexon is one of the world’s ten largest interactive game companies based on market capitalization a ...
related to its game ''
Sudden Attack ''Sudden Attack'' (Korean: 서든어택) is a free-to-play multiplayer first-person shooter online game developed by the South Korean company GameHi. On December 2, 2013, Nexon America CEO Min Kim announced plans to discontinue ''Sudden Attack'' ...
'' for deceptive loot-box practices, as well as two smaller fines to other companies.


Singapore

In October 2014, Singapore's parliament passed The Remote Gambling Act, which introduced a ban on unlicensed gambling websites and fines for anyone violating it. The law's definition of gambling included staking "virtual credits, virtual coins, virtual tokens, virtual objects or any similar thing that is purchased...in relation to a game of chance", leading to concerns that it would require producers of any game in which players paid money and received a randomised outcome to seek a license to operate from the government. In response to games industry lobbying home affairs minister
S. Iswaran S. Iswaran ( ta, எஸ் ஈஸ்வரன்; born 1962) is a Singaporean politician who has been serving as Minister for Transport since 2021 and Minister-in-charge of Trade Relations since 2018. A member of the governing People's Action P ...
clarified the law in parliament, stating that "the Bill does not intend to cover social games in which players do not play to acquire a chance of winning money and where the game design does not allow the player to convert in-game credits to money or real merchandise outside the game". The minister also specifically excluded platforms which offered "virtual currencies which can be used to buy or redeem other entertainment products", such as
Steam Steam is a substance containing water in the gas phase, and sometimes also an aerosol of liquid water droplets, or air. This may occur due to evaporation or due to boiling, where heat is applied until water reaches the enthalpy of vaporization ...
, from the provisions of the bill. However, the minister also said:
The fact is that the line between social gaming and gambling is increasingly becoming blurred. What may appear benign today can quickly morph into something a lot more sinister tomorrow in response to market opportunities and consumer trends. That is why the legislation is cast broadly.
The Remote Gambling Act was placed under review by Ministry of Home Affairs of Singapore in 2021 with the aim to amend the law be technology agnostic, and may potentially include regulations for loot boxes among other types of non-traditional gambling products.


Australia

Within Australia, games with loot boxes would fall under gambling restrictions if they can be played "for money or anything else of value"; the question remains if items that only exist within game have "value" that can be quantified, even if this is related to an item's prestige. The
Victorian Commission for Gambling and Liquor Regulation The Victorian Commission for Gambling and Liquor Regulation (VCGLR) was the independent statutory authority that regulated the liquor and gambling industries in Victoria, Australia. This regulation included liquor and gaming licensing, complianc ...
has stated that it considers loot boxes to be gambling, but does not have the authority to prosecute companies registered overseas. The commission has suggested "an immediate R rating" for any games which feature loot boxes as a solution to this limitation. In March 2018, the Australian Office of eSafety published a list of safety guidelines on the dangers of online loot boxes. The
Australian Senate The Senate is the upper house of the Bicameralism, bicameral Parliament of Australia, the lower house being the House of Representatives (Australia), House of Representatives. The composition and powers of the Senate are established in Chapter ...
passed a motion, led by Jordon Steele-John, in June 2018 directing the Environment and Communications References Committee investigate loot boxes and report back to the Senate in September 2018. The investigation, which started in August 2018, evaluated the use of loot boxes in video games and considered them under issues related to gambling and effects on children. The report, released in mid-September 2018, found that loot boxes are "psychologically akin to gambling", and that games with loot boxes are potentially "exploiting gambling disorders among their customers". The Committee recommended that games with loot boxes be labeled to warn of parental guidance and indicate that they contain "in-game gambling content" and suggest that such games be rated to represent the legal gambling age in the country. In the final report, the Committee urged the Australian government to "undertake a comprehensive review of loot boxes in video games" through a multi-departmental effort to determine what legislative and other actions need to be taken. A February 2020 report from the Australian House of Representatives Standing Committee on Social Policy and Legal Affairs that focused on Internet content that should be blocked behind age verification gates recommended that the Office of the eSafety Commissioner or similar body "report to the Australian government on options for restricting access to loot boxes and other simulated gambling elements in computer and video games to adults aged 18 years or over, including through the use of mandatory age verification". By August 2020, the
Australian Classification Board The Australian Classification Board (ACB or CB) is an Australian government statutory body responsible for the classification and censorship of films, video games and publications for exhibition, sale or hire in Australia. The ACB was establis ...
(ACB) had updated it regulations that games with any microtransaction, including loot boxes, must be labeled on its cover as containing "in-game purchases" as part of the ratings classification. MP
Andrew Wilkie Andrew Damien Wilkie (born 8 November 1961) is an Australian politician and independent federal member for Clark. Before entering politics Wilkie was an infantry officer in the Australian Army., Australian Parliament House Biographies; 19 Augu ...
introduced a bill in November 2022 that would require video games with loot boxes to be automatically rated by the ACB as R18+ or be refused a rating. By existing law, R18+ games are restricted from sale to minors. Wilkie stated that he believed that loot boxes in video games were grooming minors "for future gambling" as a rationale for the bill.


New Zealand

The Gambling Commission within the
Department of Internal Affairs The Department of Internal Affairs (DIA), or in te reo Māori, is the public service department of New Zealand charged with issuing passports; administering applications for citizenship and lottery grants; enforcing censorship and gambling law ...
for New Zealand stated, in response to a citizen's email, that currently in their view "loot boxes do not meet the legal definition of gambling", but are reviewing the situation as it progresses.


Europe


United Kingdom

In March 2017, the UK's
Gambling Commission The Gambling Commission is an executive non-departmental public body of the Government of the United Kingdom responsible for regulating gambling and supervising gaming law in Great Britain. Its remit covers arcades, betting, bingo, casinos, ...
issued a position paper "Virtual currencies, esports and social casino gaming". The paper took the position that virtual items are "prizes", and that, in general "Where prizes are successfully restricted for use solely within the game, such in-game features would not be licensable gambling". However, the paper continues that:
In our view, the ability to convert in-game items into cash, or to trade them (for other items of value), means they attain a real world value and become articles of money or money's worth. Where facilities for gambling are offered using such items, a licence is required in exactly the same manner as would be expected in circumstances where somebody uses or receives casino chips as a method of payment for gambling, which can later be exchanged for cash.
In August 2017, the commission opened an investigation into
skin gambling In video games, skin gambling is the use of virtual goods, often cosmetic in-game items such as "Skin (computing)#Video gaming, skins", as virtual currency to bet on the outcome of eSports, professional matches or on other games of chance. It is ...
. Later, in November, the commission's executive director Tim Miller was interviewed on
BBC Radio 4 BBC Radio 4 is a British national radio station owned and operated by the BBC that replaced the BBC Home Service in 1967. It broadcasts a wide variety of spoken-word programmes, including news, drama, comedy, science and history from the BBC' ...
where he confirmed that the commission had also been investigating loot boxes and suggested self-regulation of the games industry. The Commission issued a statement that month recognising that they cannot make the determination when loot boxes crosses over into gambling, as that they can only enforce what Parliament has issued as the law for gambling, and restating the legal definition of gambling in this regards from their earlier position paper. Miller said while they cannot take action toward loot boxes until Parliament changes the law, they can raise awareness of issues with loot boxes that might affect children and their parents, and are trying to evaluate the risks and issues associated with that as part of their August 2017 skin gambling investigation. Miller further stated that even if other countries were to pass laws or regulate loot boxes, the Commission would still need to follow the UK's laws. In October 2017, a month prior to the ''Battlefront II'' controversy, MP
Daniel Zeichner Daniel Stephen Zeichner (born 9 November 1956) is a British politician who has served as the Member of Parliament (MP) for Cambridge since 2015. A member of the Labour Party, he defeated Liberal Democrat Julian Huppert before retaining his seat ...
of Cambridge, on behalf of a constituent, submitted a written
parliamentary A parliamentary system, or parliamentarian democracy, is a system of democracy, democratic government, governance of a sovereign state, state (or subordinate entity) where the Executive (government), executive derives its democratic legitimacy ...
question "to ask the Secretary of State for Digital, Culture, Media and Sport (DCMS), what steps she plans to take to help protect vulnerable adults and children from illegal gambling, in-game gambling and loot boxes within computer games". In response, MP
Tracey Crouch Tracey Elizabeth Anne Crouch (born 24 July 1975) is a British politician who has served as the Member of Parliament (MP) for Chatham and Aylesford since 2010. A member of the Conservative Party, she gained the seat from Labour's Jonathan Shaw ...
, Parliamentary Under-Secretary for the Department, referred back to the stance of the Gambling Commission's position paper, and said that:
The government recognises the risks that come from increasing convergence between gambling and video games. The Gambling Commission is keeping this matter under review and will continue to monitor developments in the market.
Separately, over 10,000 British citizens signed a petition requesting that the British government "adapt gambling laws to include gambling in video games which targets children", which includes issues over loot boxes. The government's response stated that the
Video Standards Council The Video Standards Council (VSC), also known as the ''VSC Rating Board'', is an administrator of the Pan European Game Information, PEGI system of Video game rating, age rating for video games. It was established in 1989, originally with the purpo ...
is in discussions with
Pan European Game Information PEGI () or Pan-European Game Information is a European video game content rating system established to help European consumers make informed decisions when buying video games or apps through the use of age recommendations and content descripto ...
(PEGI) to determine if there are any changes needed in the PEGI standards in relationship to gambling in games, and that the Gambling Commission is also considering the interaction between these games and younger players. The response also referenced the
Consumer Protection from Unfair Trading Regulations 2008 The Consumer Protection from Unfair Trading Regulations 2008 is a statutory instrument in the United Kingdom made under the European Communities Act 1972. It came into force on 26 May 2008. It is effectively the successor to the Trade Descriptio ...
law which, according to the response "includes a requirement on businesses not to subject anyone to misleading or aggressive marketing practices, or, for example, direct exhortation to buy products, such as games content, including in-game purchases such as loot boxes". In March 2018, MP
Anna Turley Anna Catherine Turley (born 9 October 1978) is a British politician. She was the Labour and Co-operative Member of Parliament (MP) for Redcar from 2015 until 2019. Turley was chair of the Co-operative Party from 8 June 2019 until December 2019. ...
of
Redcar Redcar is a seaside town on the Yorkshire Coast in the Redcar and Cleveland unitary authority in the county of North Yorkshire, England. It is located east of Middlesbrough. The Teesside built-up area's Redcar subdivision had a population of ...
asked the government to "bring forward legislative proposals to regulate the game mechanics of loot boxes". In response Minister of State MP
Margot James Margot Cathleen James (born 28 August 1957) is a British politician who served as Minister of State for Digital and Creative Industries from 2018 to 2019. She was Member of Parliament (MP) for Stourbridge from 2010 to 2019. Elected as a Conserva ...
said that "PEGI informs consumers purchasing products from major app stores if they contain further purchases and are considering the possibility of placing these notifications on boxed products", and that "regulators such as PEGI and the Gambling Commission are speaking to industry to ensure that those who purchase and play video games are informed and protected". The Gambling Commission issued a report in November 2018 on the state of gambling and its effect on youth. While news outlets had stated that the Commission determined that loot boxes can be considered a gateway for youths to undertake gambling in other scenarios beyond video games, the Commission clarified that they had not made any direct conclusion, and only found that about 3 in 10 children in the UK have opened loot boxes in games. Starting in January 2019, the
Department for Digital, Culture, Media and Sport , type = Department , logo = Department for Digital, Culture, Media and Sport logo.svg , logo_width = , logo_caption = , seal = , seal_width = , seal_caption = , picture = Gove ...
of the House of Commons opened up public input on how immersive technology like virtual reality may impact culture, with a specific focus on "the addictive nature of some technologies". The Department has also held public hearings with members of the video game industry to solicit their input. MP
Margot James Margot Cathleen James (born 28 August 1957) is a British politician who served as Minister of State for Digital and Creative Industries from 2018 to 2019. She was Member of Parliament (MP) for Stourbridge from 2010 to 2019. Elected as a Conserva ...
, the current
Minister for Culture, Communications and Creative Industries In the Government of the United Kingdom, the Parliamentary Under-Secretary of State for Arts and Heritage is a ministerial post in the Department for Culture, Media and Sport. The post is usually a junior to middle-ranking minister to the more ...
, stated in these discussions that the UK's approach to how they treat loot boxes will likely be different from how other European states like Belgium have done, as the countries do not share similar laws for other gambling activities. James said "Loot boxes are a means of people purchasing items, skins, to enhance their gaming experience, not through an expectation of an additional financial reward. And also, more importantly, they can't be traded offline for money. So I think there are big differences, and I don't think really it is true to say loot boxes are gambling." The Gambling Commission issued a statement in July 2019 that they cannot oversee the sale of loot boxes in most video games as there is no way to monetise the items within the loot box, a core distinction from gambling as written in current legislation. The Commission did caution that there are third-party sites that enable the means to monetise loot box items, similar to
skin gambling In video games, skin gambling is the use of virtual goods, often cosmetic in-game items such as "Skin (computing)#Video gaming, skins", as virtual currency to bet on the outcome of eSports, professional matches or on other games of chance. It is ...
, but they are not in a position to monitor those sited, and urged companies like Valve to take better steps to prevent skin gambling monetisation. In its final report, published 9 September 2019, the Department for Digital, Culture, Media and Sport recommended that the British government take precautionary steps to prevent the sale of games containing loot boxes to minors, and to work with PEGI to make sure that games with loot boxes are labeled as having gambling mechanics. Further, the report stated that "We consider loot boxes that can be bought with real-world money and do not reveal their contents in advance to be games of chance played for money's worth" and urged the government to add games containing loot boxes as regulated under the
Gambling Act 2005 The Gambling Act 2005 (2005 c 19) is an Act of the Parliament of the United Kingdom. It mainly applies to England and Wales, and to Scotland, and is designed to control all forms of gambling. It transfers authority for licensing gambling from t ...
, which would restrict their sale. The report also agreed with the conclusions of the Gambling Commission that game publishes and developers must take more steps to limit the grey market of skin gambling. The
Children's Commissioner for England The Office of the Children's Commissioner for England is a non-departmental public body in England responsible for promoting and protecting the rights of children as set out in the United Nations Convention on the Rights of the Child, as well a ...
came out with a report the following month echoing the same concerns, that loot boxes are akin to gambling for minors, and encouraged updates to gambling laws to reflect how games may use them to draw minors to continue to spend money. The
National Health Service The National Health Service (NHS) is the umbrella term for the publicly funded healthcare systems of the United Kingdom (UK). Since 1948, they have been funded out of general taxation. There are three systems which are referred to using the " ...
director of mental health
Claire Murdoch Claire Louise Murdoch is the Chief Executive of the Central and North West London NHS Foundation Trust and national director for mental health, NHS England. She was rated by the Health Service Journal as the seventeenth most influential person ...
stated in January 2020 that the Service was incorporating concerns related to loot boxes and the mental health of youth into their Long Term Plan, but cautioned that "no company should be setting kids up for addiction by teaching them to gamble on the content of these loot boxes. No firm should sell to children loot box games with this element of chance, so yes those sales should end." In June 2020, DCMS began requesting evidence from game companies related to loot boxes as part of a further investigation. It issued its first findings in July 2022, where it concluded that players of games with loot boxes were "more likely to experience gambling, mental health, financial and problem gaming-related harms". DCMS did not intend to change gambling laws in the UK to account for loot boxes as this "would have significant implementation challenges and risks of unintended consequence", but urged video game companies to employ measures to reduce the potential harm to players from loot boxes, such as implementing parental controls, more transparency on loot box odds, and warning players who have spent a large amount of money on loot boxes. The DCMS said they would not hesitate to change laws should the video game industry not work on these measures. The
House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
Gambling Committee released a special report on the state of gambling in the UK on July 2, 2020. The report identified the ongoing issue of loot boxes, how they may be seen as gambling and their effect on the youth, and concluded that "Ministers should make regulations under section 6(6) of the Gambling Act 2005 specifying that loot boxes and any other similar games are games of chance, without waiting for the Government's wider review of the Gambling Act." The Advertising Standards Authority (ASA) issued guidance on mobile games in September 2021 aimed at how such games advertise their in-game premium currency. Among these factors, the ASA's guidance stated that games that included loot boxes must disclose this information on store pages and any advertising for the game. While the ASA cannot penalise companies that fail to follow their standards, being named by the ASA as going against their guidelines can be seen as a deterrent. In February 2017, the
Isle of Man ) , anthem = "O Land of Our Birth" , image = Isle of Man by Sentinel-2.jpg , image_map = Europe-Isle_of_Man.svg , mapsize = , map_alt = Location of the Isle of Man in Europe , map_caption = Location of the Isle of Man (green) in Europe ...
's Gambling Supervision Commission updated their regulations to explicitly define virtual items as being "money's worth" even when not convertible into cash, explicitly bringing loot boxes under statutory regulation.


Netherlands

In April 2018, the Dutch Gaming Authority issued a legal opinion that games which both sell loot boxes and permit the "transfer" of yielded items are illegal. In its report "Study into loot boxes: A treasure or a burden?", the authority stated that four games of the ten it studied violated gambling law in this way. It concluded that while the loot-box systems in the six remaining games did not meet the threshold for legal action, they "nevertheless foster dthe development of addiction" and were "at odds" with the authority's objectives. The authority gave the developers of the four unnamed games eight weeks to correct their loot-box system or face fines and potential bans on sales of the games in the Netherlands. Valve disabled the ability for players to trade in-game items from '' Counter-Strike: Global Offensive'', ''
Team Fortress 2 ''Team Fortress 2'' is a 2007 multiplayer first-person shooter, first-person shooter game developed and published by Valve Corporation. It is the sequel to the 1996 ''Team Fortress'' Mod (video gaming), mod for ''Quake (video game), Quake'' and ...
'', and ''
Dota 2 ''Dota 2'' is a 2013 multiplayer online battle arena (MOBA) video game by Valve. The game is a sequel to ''Defense of the Ancients'' (''DotA''), a community-created mod for Blizzard Entertainment's '' Warcraft III: Reign of Chaos.'' ''Dota 2' ...
'', stating that they were told by the Dutch Gaming Authority that they had until June 20, 2018 to remedy the loot-box situations within these games. On July 11, 2018 Valve re-enabled the ability for players to trade in-game items from ''Counter-Strike: Global Offensive'', but restricted customers from the Netherlands and Belgium from opening loot boxes. EA had not modified ''FIFA'', leading to the Gaming Authority to seek fines from EA. EA had sued, but lost its case in October 2020, with the judge agreeing with the Gaming Authority's decision related to gambling, and was ordered to remove the ability to sell loot boxes to player in ''FIFA'' within three weeks or be fined a total of per week up to a maximum until they were removed. EA has planned to appeal this decision. EA appealed the decision to the Dutch Administrative Jurisdiction Division, which overturned the decision in March 2022. The higher court ruled that since the Ultimate Team packs were part of the larger game of skill, it did not violate the Dutch gambling laws, reversing the fine against EA. The authority's investigation was opened following a
parliamentary A parliamentary system, or parliamentarian democracy, is a system of democracy, democratic government, governance of a sovereign state, state (or subordinate entity) where the Executive (government), executive derives its democratic legitimacy ...
question tabled by MP
Michiel van Nispen Michiel van Nispen (born 14 October 1982) is a Dutch politician, he has been a member of the House of Representatives of the Netherlands for the Socialist Party since 2 April 2014, when he replaced Jan de Wit. Van Nispen studied Dutch law at T ...
in November 2017. Announcing the investigation, the regulator warned of the "possible dangers" of "addiction and large financial expenses". Following its April announcement, the Gaming Authority began to solicit other European Union countries to help harmonise their ruling on loot boxes among the Union. In April 2019,
Psyonix Psyonix LLC is an American video game developer based in San Diego. Founded in 2000 by Dave Hagewood, the company is best known for its 2015 game ''Rocket League''. In May 2019, Psyonix was acquired by Epic Games. History Psyonix was founded ...
disabled the ability for players in the Netherlands (and Belgium) to open loot crates with keys in ''Rocket League'' due to government regulations.


Belgium

In April 2018, shortly after the Netherlands' decision on loot boxes, the Belgian Gaming Commission completed its study of loot-box systems in four games, ''FIFA 18'', ''Overwatch'', ''Counter-Strike: Global Offensive'' and ''Star Wars Battlefront II'', and determined that the loot-box systems in ''FIFA 18'', ''Overwatch'', and ''Counter-Strike: Global Offensive'' were considered games of chance and subject to Belgium's gambling laws. The Commission stated that for loot boxes in ''Overwatch'', the action of opening a loot box is a game of chance to receive items of some perceived value to players, and there is no means to directly purchase in-game currency to obtain a specific item, while games like ''FIFA 18'' merge reality and fantasy by using real-life athletes to promote the loot-box system. Belgium's
Minister of Justice A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a v ...
Koen Geens Koen Geens (born 22 January 1958) is a Belgian jurist and politician of the Christian Democratic and Flemish (CD&V) who served as the Minister of Justice and as Deputy Prime Minister in the governments of Prime Ministers Charles Michel and Sophie ...
stated in these findings that "A dialogue with the sector is necessary" and that "It is often children who come into contact with such
oot box ''The Legend of Zelda: Ocarina of Time'' is an action-adventure game developed and published by Nintendo for the Nintendo 64. It was released in Japan and North America in November 1998, and in PAL regions the following month. ''Ocarina of Tim ...
systems and we cannot allow that". The study was conducted starting in November 2017, during which ''Battlefront II'' had temporarily removed loot boxes, so was not considered in violation. The Commission ordered that the loot-box systems from these three games be removed, or otherwise the publishers could face criminal offenses and fines up to . Geens called for a
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
-wide ban of loot boxes, saying that "mixing gambling and gaming, especially at a young age, is dangerous for the mental health of the child". In response to the announcement, several companies made their games with loot boxes unavailable to customers in Belgium with no financial recourse to customers who bought or paid for merchandise in the games: *
Valve A valve is a device or natural object that regulates, directs or controls the flow of a fluid (gases, liquids, fluidized solids, or slurries) by opening, closing, or partially obstructing various passageways. Valves are technically fittings ...
said that they were "happy to engage with the Belgian Gambling Commission and answer any questions they may have". EA and
Activision Blizzard Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. It was founded in July 2008 through the merger of Activision, Inc. (the publicly traded parent company of Activision Publishing) and Vivendi ...
declined to comment. As described above for the Netherlands, a patch to ''Counter Strike: Global Offensive'' in July 2018 prevented players from Belgium or the Netherlands from opening loot boxes. *
2K Games 2K is an American video game publisher based in Novato, California. 2K was founded under Take-Two Interactive in January 2005 through the 2K Games and 2K Sports labels, following Take-Two Interactive's acquisition of Visual Concepts that same m ...
modified ''
NBA 2K ''NBA 2K'' is a series of basketball sports simulation video games developed by Visual Concepts and released annually since 1999. The premise of the series is to emulate the sport of basketball, and more specifically, the National Basketball A ...
'' to comply with the ruling by removing the ability to buy MyTeam random card packs with real-world funds for Belgian players, though they can still be purchased through in-game currency. 2K still asserted that loot boxes did not violate Belgium's gambling laws, and encouraged players to contact their local representatives regarding these removals. *
Blizzard Entertainment Blizzard Entertainment, Inc. is an American video game developer and publisher based in Irvine, California. A subsidiary of Activision Blizzard, the company was founded on February 8, 1991, under the name Silicon & Synapse, Inc. by three graduat ...
will block Belgian players of ''Overwatch'' and ''Heroes of the Storm'' from buying loot boxes, though they can still earn these through in-game rewards. *
ArenaNet ArenaNet, LLC is an American video game developer and subsidiary of NCsoft, founded in 2000 by Mike O'Brien, Patrick Wyatt and Jeff Strain and located in Bellevue, Washington. They are most notable as developers of the online role-playing ga ...
disabled Belgian users from purchasing in-game currency with real-world funds from ''
Guild Wars 2 ''Guild Wars 2'' is a free-to-play, massively multiplayer online role-playing game developed by ArenaNet and published by NCSoft. Set in the fantasy world of Tyria, the core game follows the re-emergence of Destiny's Edge, a disbanded guild ded ...
''. While the game does not have loot boxes, it does have "Ecto Gambling" that allows players to use in-game currency to obtain random selections of items, which would similarly run afoul of Belgium gambling laws as they found for loot boxes. *
Square Enix is a Japanese Multinational corporation, multinational holding company, production enterprise and entertainment conglomerate, best known for its ''Final Fantasy'', ''Dragon Quest'', ''Star Ocean'' and ''Kingdom Hearts'' role-playing video game ...
announced the 2018 recall from app stores of three of its mobile games that include loot-box mechanics: ''
Mobius Final Fantasy was an episodic role-playing video game developed and published by Square Enix for iOS, Android (operating system), Android, and Microsoft Windows. It was released in Japan in June 2015, and released internationally in August 2016. The player con ...
'', '' Kingdom Hearts Union X'', and ''Dissidia Final Fantasy Opera Omnia''. *
Konami , is a Japanese Multinational corporation, multinational video game company, video game and entertainment company headquartered in Chūō, Tokyo, Chūō, Tokyo, it also produces and distributes trading cards, anime, tokusatsu, pachinko machin ...
disabled the ability for those in Belgium from purchasing in-game currency in ''
Pro Evolution Soccer 2019 (Abbreviated as ''PES 2019'') is a football simulation video game developed by PES Productions and published by Konami for Microsoft Windows, PlayStation 4, and Xbox One. It is the 18th instalment in the PES series and was released on 28 Augus ...
'', which could then be used to buy loot boxes. Players are still able to earn this currency in-game. * Simultaneously with its actions in the Netherlands in April 2019, ''Rocket League'' developer Psyonix disabled the ability for Belgium players to open loot boxes. *
Nintendo is a Japanese Multinational corporation, multinational video game company headquartered in Kyoto, Japan. It develops video games and video game consoles. Nintendo was founded in 1889 as by craftsman Fusajiro Yamauchi and originally produce ...
closed down two of its mobile games, '' Animal Crossing: Pocket Camp'' and ''
Fire Emblem Heroes is a free-to-play tactical role-playing game developed by Intelligent Systems and published by Nintendo for Android and iOS. The game is a mobile spin-off of the ''Fire Emblem'' series featuring its characters, and was released on February 2 ...
'' for Belgian users, as both offer the ability to use real-world money to buy a random in-game item. Electronic Arts' games ''
FIFA 18 ''FIFA 18'' is a football simulation video game developed and published by Electronic Arts and released worldwide on 29 September 2017 for Microsoft Windows, PlayStation 3, PlayStation 4, Xbox 360, Xbox One and Nintendo Switch. It is the 25th ...
'' and ''
FIFA 19 ''FIFA 19'' is a football simulation video game developed by EA Vancouver and released by Electronic Arts on 28 September 2018 for PlayStation 3, PlayStation 4, Xbox 360, Xbox One, Nintendo Switch, and Microsoft Windows. It is the 26th installm ...
'' were also called out by the Commission; however, EA did not make any modifications to these games; EA had previously stated in May 2018 that it did not believe the implementation of loot boxes in their games constituted gambling. As such, the Commission has started actions with the Belgian courts to initiate legal action against EA by September 10, 2018, though whether such action is possible would be a decision of the public prosecutor's office. Ultimately on January 29, 2019, EA announced that it would stop selling ''FIFA'' Ultimate Team packs with microtransactions to players in Belgium by February, bringing them into compliance with the Commission.


France

Following the controversy on loot boxes and microtransactions on release of ''Star Wars Battlefront II'', French Senator Jérôme Durain wrote to ARJEL, a government-mandated authority that oversees online gambling, to ask them to investigate the situation with pay-to-win loot boxes. Durain's letter stated his concerns that "some observers point to a convergence of the video game world and practices specific to gambling" in his request. ARJEL's report, released in June 2018, does not immediately consider loot boxes as gambling, but does address the need to continue to investigate them further following a planned report to be published by the Gaming Regulators European Forum. ARJEL noted that items from loot boxes do not normally have monetary value, and even when they are traded through skin gambling, the publisher of such games do not participate in that arena, thus distancing loot boxes from other forms of gambling.


Germany

In February 2018 Germany's
Commission for Youth Media Protection The Commission for Youth Media Protection (German: ''Kommission für Jugendmedienschutz'', ''KJM'') is a German state organisation that is intended to regulate the exposure of children to mass media. It is responsible for promoting compliance with ...
announced research into loot boxes undertaken at the
University of Hamburg The University of Hamburg (german: link=no, Universität Hamburg, also referred to as UHH) is a public research university in Hamburg, Germany. It was founded on 28 March 1919 by combining the previous General Lecture System ('' Allgemeines Vor ...
which concluded that they present features "typical of gambling markets". Commission head Wolfgang Kreißig said that it was "conceivable that loot boxes could violate the ban on advertising to children and adolescents". The commission concluded in March 2018 that loot boxes can possibly violate the prohibition of direct advertisement appeals to buy products directed towards minors; however, the games that they studied were rated for players of at least 16 years old, and thus were not targeted to be played by minors. The commission remained open on hearing complaints towards loot boxes on specific games, though have no legal authority to enact any fines or penalties should they be found to be against law. In October 2019, the
Federal Department for Media Harmful to Young Persons The Federal Department for Media Harmful to Young Persons (german: link=no, Bundesprüfstelle für jugendgefährdende Medien or ''BPjM'') is an upper-level German federal censorship agency subordinate to the Federal Ministry of Family Affair ...
(BPjM) stated it was looking into blacklisting the game ''
Coin Master ''Coin Master'' is a free, single-player, casual mobile game created by Israeli studio Moon Active. It has had over 100 million downloads (as of February 2021). ''Coin Master'' is the top-grossing mobile game in the UK (since February 2019) a ...
'' for distribution in Germany after
Jan Böhmermann Jan Böhmermann () (born 23 February 1981) is a German satirist, journalist, and podcast and television host. He also worked as a writer, producer, radio host, and is best known for his activism through publicity stunts. Early life and educati ...
had discussed issues with the game's monetisation mechanics. While ''Coin Master'' does not use loot boxes, the game uses a gameplay mechanism that requires the player to play a virtual
slot machine A slot machine (American English), fruit machine (British English) or poker machine (Australian English and New Zealand English) is a gambling machine that creates a game of chance for its customers. Slot machines are also known pejoratively a ...
to advance in the game, with the opportunity to use items purchased with real-world funds to influence or bypass the slot machine to achieve desirable results, a model adapted by many other games and one that can encourage or trivialise excessive gambling. If ''Coin Master'' had been blacklisted the BPjM may have opened the door for other games with similar monetisation routes to be reviewed. By March 2020, BPjM opted not to blacklist the game, but later announced in July 2020 that it may consider requiring games like ''Coin Master'' and games with loot boxes to be rated at a higher ratings level under a new Youth Protection Act that is expected to be passed and in enforcement in early 2021. Germany's
Bundestag The Bundestag (, "Federal Diet") is the German federal parliament. It is the only federal representative body that is directly elected by the German people. It is comparable to the United States House of Representatives or the House of Commons ...
passed revisions to the Youth Protection Act in March 2021 that would update the ratings systems for games to mark those with loot boxes or similar mechanics as "cost traps".


Sweden

Also in February 2018,
Ardalan Shekarabi Ardalan Shekarabi ( fa, اردلان شکرآبی; born 28 November 1978) is a Swedish politician and former party chairman. He was appointed Minister for Social Security in October 2019, and had previously served as Minister for Public Adminis ...
, the Swedish Minister for Public Administration, stated that he was "ready to ask heauthorities to take a closer look at the phenomenon of loot boxes and see if there is a need to change legislation in order to strengthen consumer protection." He raised the prospect of loot boxes being classified as a lottery by 2019. Shekarabi instructed the Swedish Consumer Agency in May 2019 to review consumer protection around loot boxes, particularly in how well they protect minors.


Poland

In February 2019, the Polish Ministry of Finance issued a statement saying that loot boxes are not gambling in the light of the Polish law, although it noted that they may well constitute gambling in other jurisdictions. Polish law defines gambling very specifically, and the current definition is not applicable to loot boxes.


European Union

A July 2020 report prepared on behalf of the
European Parliament Committee on the Internal Market and Consumer Protection The Committee on the Internal Market and Consumer Protection (IMCO) is a committee of the European Parliament. Work of the committee The committee is responsible for: * coordination at Community level of national legislation in the sphere of th ...
(IMCP), "Loot boxes in online games and their effect on consumers, in particular young consumers", was one of the first reports to reframe loot boxes as a matter of
consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...
rather than a gambling concern. The report identified that loot boxes in video games have "problematic design features" that create an "irresistible urge to play" and a "growing tension that could only be relieved by playing" in an addictive loop. While the report identified this had similarities with gambling, the authors also urged that the European Parliament consider the loot box issue at a consumer protection standpoint since it can create addictive behavior particularly in young persons. The report included recommendations such as restrictions on design features that encourage the addictive loop, better disclosure from publishers to players on loot box odds and the risks of playing such games, parental controls, and consumer testing with governmental oversight. A report by the Norwegian Consumer Council and backed by 18 other EU countries, released in May 2022, found that loot boxes in games like ''FIFA'' and '' Raid: Shadow Legends'' were "exploitative and predatory", and positioned the EU to include regulations related to loot boxes in upcoming directive discussions.


North America


United States

There are presently no laws in the United States targeting loot boxes, though the renewed interest in the issues with
skin gambling In video games, skin gambling is the use of virtual goods, often cosmetic in-game items such as "Skin (computing)#Video gaming, skins", as virtual currency to bet on the outcome of eSports, professional matches or on other games of chance. It is ...
from mid-2016 highlighted several concerns with using virtual items for gambling purposes. In past case law, courts have ruled that gambling with virtual currency within a video game is not illegal as long as there are no ties to real money, steps
Blizzard Entertainment Blizzard Entertainment, Inc. is an American video game developer and publisher based in Irvine, California. A subsidiary of Activision Blizzard, the company was founded on February 8, 1991, under the name Silicon & Synapse, Inc. by three graduat ...
and
Riot Games Riot Games, Inc. is an American video game developer, publisher and esports tournament organizer based in Los Angeles, California. It was founded in September 2006 by Brandon Beck and Marc Merrill to develop ''League of Legends'' and went on t ...
have done with their titles. Further, most states define gambling laws based on receiving something of value from paying for a game of chance, and traditionally, in-game items are considered to have no value in previous case law. However, with more technically-literate court judges that may consider "value" more than just a financial value, alongside new perception of how much value in-game items can have resulting from the skin gambling situation, could change how the framework in the United States would classify loot boxes. Hawaii state representatives Chris Lee and Sean Quinlan issued a statement in November 2017 taking a stance against loot boxes. "These kinds of lootboxes and microtransactions are explicitly designed to prey upon and exploit human psychology in the same way casino games are so designed." They plan to introduce legislation in the State of Hawaii, specifically to block sale of ''Star Wars Battlefront II'', and that they have spoken to lawmakers from other states to enact similar laws, such that federal legislation could be possible if enough states take action. Quinlan stated:
I realized just how bad it has gotten. We've been on this path for 15 years with day-one DLC, subscription passes, pay-to-win. We as consumers kept accepting that, kept buying those games. Now we're at a place where we need to consider, do we need to legislate? Does the ESRB have to consider a new rating that could deal with gambling and addictive mechanics?
Rather than passing legislation that could have a
slippery slope A slippery slope argument (SSA), in logic, critical thinking, political rhetoric, and caselaw, is an argument in which a party asserts that a relatively small first step leads to a chain of related events culminating in some significant (usuall ...
of harmful effects on the industry, Quinlan stated he would prefer to see the industry self-regulate, either by excluding gambling-like mechanics in games marketed to children, or have the industry rate games with these mechanics for more mature audiences which would affect how they would be sold and marketed. Lee later outlined how he would present a law, which would ban the sale of games to anyone under 21 if it contained a gambling element, defined if real-world funds are used to provide a "percentage chance" of receiving a specific in-game item rather than the item directly, applied both at retail and at digital distribution. By February 2018, two separate bills were introduced in Hawaii's state legislature: one bill would require retail games featuring loot-box mechanisms to have clear labeling stating "Warning: contains in-game purchases and gambling-like mechanisms which may be harmful or addictive", while a second bill would regulate sale of these games to only those 21 years of age or older, the minimum age for gambling within the state. However, by March 2018, the bills failed to meet necessary requirements to be considered in the legislation, and were dropped. In January 2018, three senators in
Washington state Washington (), officially the State of Washington, is a state in the Pacific Northwest region of the Western United States. Named for George Washington—the first U.S. president—the state was formed from the western part of the Washington ...
introduced Senate Bill 6266 (S-3638.1) in the state legislature, which would, if enacted, order the Washington State Gambling Commission to investigate loot boxes and their potential effect on underage gambling. Minnesota introduced a bill in April 2018 that would prohibit sale of games with loot-box systems to children under 18 years of age, and require specific labelling on these games to alert consumers to the loot-box system. In early May 2019, Republican Senator
Josh Hawley Joshua David Hawley (born December 31, 1979) is an American politician and lawyer who has served as the junior United States senator from Missouri since 2019. A member of the Republican Party, Hawley served as the 42nd attorney general of Mi ...
of Missouri announced that he intends to introduce a bill named "The Protecting Children from Abusive Games Act" that would ban loot boxes and pay-to-win microtransactions in "games played by minors", using similar qualifications to determine this as previously defined in the
Children's Online Privacy Protection Act The Children's Online Privacy Protection Act of 1998 (COPPA) is a United States federal law, located at (). The act, effective April 21, 2000, applies to the online collection of personal information by persons or entities under U.S. juri ...
. The
Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
would be responsible for enforcing the bill by making judgements and leveling fines for games that fail to take these steps. The bill was formally introduced in the United States Senate in the 116th Congress on May 23, 2019 as Senate Bill 1629, with co-sponsors
Ed Markey Edward John Markey (born July 11, 1946) is an American lawyer, politician, and former Army reservist who has served as the junior United States senator from Massachusetts since 2013. A member of the Democratic Party, he was the U.S. representati ...
(Massachusetts) and
Richard Blumenthal Richard Blumenthal (; born February 13, 1946) is an American lawyer and politician who is the senior United States senator from Connecticut, a seat he has held since 2011. A member of the Democratic Party, he is one of the wealthiest members of ...
(Connecticut), both Democrats. The bill was referred to the
Senate Committee on Commerce, Science, and Transportation The United States Senate Committee on Commerce, Science, and Transportation is a standing committee of the United States Senate. Besides having broad jurisdiction over all matters concerning interstate commerce, science and technology policy, a ...
at that time, and no further action was taken on it, with the bill expiring at the end of the
116th United States Congress The 116th United States Congress was a meeting of the legislative branch of the United States federal government, composed of the Senate and the House of Representatives. It convened in Washington, D.C., on January 3, 2019, and ended on Januar ...
on January 3, 2021. In the wake of the May 2022 Norwegian Consumer Council's report on loot boxes, fifteen advocacy groups wrote an open letter to the Federal Trade Commission urging them to evaluate ''FIFA'' and its Ultimate Team packs for its "manipulative design abuses", based on evidence from the Norwegian report.


Multi-national

In September 2018, members from the gambling commissions from fifteen European nations, including Austria, the Czech Republic, France, Ireland, Latvia, the Netherlands, Norway, Poland, Portugal, Spain, UK, as well as the state of Washington from the United States, announced a collaborative effort to "address the risks created by the blurring of lines between gaming and gambling". While the group's specific focus will be on skin gambling sites, they will be looking to "ensure that features within games, such as loot boxes, do not constitute gambling under national laws".


Self-regulation

Video game industry bodies have generally stated that they cannot regulate loot boxes as gambling unless the law of their countries specify what counts as gambling within games.


Europe

In many European countries, voluntary ratings for video games are provided by PEGI. PEGI has stated that a game having a loot-box system will not automatically require its "gambling content" descriptor. PEGI further stated that "It's not up to PEGI to decide whether something is considered gambling or not—this is defined by national gambling laws". Parliamentary questions in the United Kingdom revealed in March 2018 that PEGI is "considering the possibility of placing n-game purchasenotifications on boxed products". PEGI announced in April 2020 that it will add the supplementary label "Includes Paid Random Items" for games featuring loot box-like mechanics.


Japan

Before the disbanding of the Japan Social Game Association (JSGA) in 2015, it issued 2 self-regulatory guidelines for in-game gacha: provide a minimum 1% payout rate and establish a payment ceiling. For example, if a player has poured certain amount of money in gacha, the player is given a chance to choose whatever reward they want from the gacha pool freely. The association recommended a 50,000-yen ceiling. The Japan Online Game Association (JOGA), which now serves as the Japanese video game industry's self-regulatory body in lieu of JSGA, also issued similar guidelines with further specifications such as "listing all available rewards from the lootbox and payout rates of all rewards" and "listing changes to all available rewards and payout rates upon software revision, specifically during festive campaign with a deadline". While the new guideline does not recommend any payment ceiling, it recommends to display the expected maximum bet in order to guarantee obtaining the item if it exceeds 50,000 yen.


United Kingdom

UKIE The Association for UK Interactive Entertainment (Ukie) is a non-profit trade association for the video game industry in the United Kingdom (UK). Ukie was originally founded as the European Leisure Software Publishers Association (ELSPA), and the ...
, the video game industry trade organisation for the United Kingdom, asserted its stance that loot boxes do not constitute gambling and are "already covered by and fully compliant with existing relevant UK regulations".


United States

The
Entertainment Software Ratings Board The Entertainment Software Rating Board (ESRB) is a self-regulatory organization that assigns age and content ratings to consumer video games in the United States and Canada. The ESRB was established in 1994 by the Entertainment Software Asso ...
(ESRB), like PEGI, provides voluntary video game
content rating A content rating (also known as maturity rating) rates the suitability of TV shows, movies, comic books, or video games to this primary targeted audience. A content rating usually places a media source into one of a number of different categories, ...
s for games in the United States. ESRB does not consider loot boxes as a form of gambling, and will not rate such games with their "Real Gambling" content descriptions. ESRB considers that loot boxes are equivalent to collectible card game booster packs, and that the player is always receiving something of value with opening a loot-box purchase, even if it is not something the player desires. The Board further stated that games that are labelled with "Real Gambling" will likely be then rated "AO" (Adults Only), to comply with gambling laws; retailers typically do not stock such games, and would thus harm a publisher. Additionally, the ESRB also sees themselves as responsible to help guide parents on video game content. As an example, they found that parents were more worried about children spending money in-game and not any gambling aspects, and thus did not include loot boxes as one of its content descriptions, though would like to add them in the future should legislation or other industry standards establish gambling as a critical issue. The
Entertainment Software Association The Entertainment Software Association (ESA) is the trade association of the video game industry in the United States. It was formed in April 1994 as the Interactive Digital Software Association (IDSA) and renamed on July 21, 2003. It is based in ...
, the parent organization of the ESRB, asserted loot boxes are not a form of gambling, stressing that they are a voluntary and optional aspect in these games. Major publishers Electronic Arts and
Take-Two Interactive Take-Two Interactive Software, Inc. is an American video game holding company based in New York City and founded by Ryan Brant in September 1993. The company owns two major publishing labels, Rockstar Games and 2K, which operate internal g ...
have also stated they do not see loot boxes as gambling due to their voluntary nature. Electronic Arts' CEO Andrew Wilson stated in May 2018 that they will continue to include loot boxes in their games, and "While we forbid the transfer of items of in-the-game currency outside, we're also actively seeking to eliminate that where it's going on in an illegal environment, and we're working with regulators in various jurisdictions to achieve that". While other publishers have acquiesced to governmental concerns about loot boxes,
Electronic Arts Electronic Arts Inc. (EA) is an American video game company headquartered in Redwood City, California. Founded in May 1982 by Apple employee Trip Hawkins, the company was a pioneer of the early home computer game industry and promoted the d ...
has been generally steadfast in that they do not believe their implementation of loot boxes is a form of gambling. In statements made at hearings with the British Digital, Culture, Media, and Sport Committee, EA representatives compared loot boxes to "surprise mechanics" that one would find with
Kinder Surprise Kinder Surprise (Italian: ''Kinder Sorpresa'' or ''Ovetto Kinder''), also known as Kinder Egg or Kinder Surprise Egg, is a milk chocolate consisting of a chocolate egg surrounding a yellow plastic capsule with a small toy inside. Manufactured by t ...
eggs, and believe that their implementation of loot boxes are "quite ethical and quite fun, quite enjoyable to people". In the wake of the criticism over ''Star Wars Battlefront II'', financial analysts suggested that the video game industry will need to develop self-regulating principles to better handle monetisation and loot-box schemes to avoid government intervention into the industry. In February 2018, Senator
Maggie Hassan Margaret Coldwell Hassan (; née Wood; born February 27, 1958) is an American politician and attorney serving as the junior United States senator from New Hampshire. A Democrat, Hassan was elected to the Senate in 2016 while serving as the 81st go ...
brought up the issue of loot boxes during a hearing of the Senate Commerce, Science and Transportation Committee to four
Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
nominees, which the Commission oversees. She asked the nominees if "that children being addicted to gaming - and activities like loot boxes that might make them more susceptible to addiction - is a problem that merits attention?"; all four nominees agreed attention would be necessary. The same day, Hassan authored a letter to the ESRB "to review the completeness of the board's ratings process and policies as they relate to loot boxes, and to take into account the potential harm these types of micro-transactions may have on children" and "to examine whether the design and marketing approach to loot boxes in games geared toward children is being conducted in an ethical and transparent way that adequately protects the developing minds of young children from predatory practices." Though neither the hearing nor the letter called for regulation, Brian Crecente of ''
Glixel ''Rolling Stone'' is an American monthly magazine that focuses on music, politics, and popular culture. It was founded in San Francisco, California, in 1967 by Jann Wenner, and the music critic Ralph J. Gleason. It was first known for its cove ...
'' considered these as pretense to get the ESRB to act on its own before Congress would be forced to take legislative action. In response to Hassan's letter, the ESRB announced in February 2018 that it would require any rated game that offers any type of in-game purchase with real-world funds, encompassing loot boxes, would be required to be labeled as such. ESRB stated the labeling was primarily meant to help parents watch for games for their children, and because of the brevity of space they have on retail packaging, did not opt to require publishers to identify the specific form of microtransaction. However, the board still asserted that they still do not believe loot boxes themselves are a form of gambling. While Sen. Hassan called the ESRB's decision a "step forward", she still remained concerned of "the ESRB's skepticism regarding the potentially addictive nature of loot boxes and microtransactions in video games", and stated "I will work with all relevant stakeholders to continue oversight on these issues and ensure that meaningful improvements are made to increase transparency and consumer protections." The ESRB introduced this new label "In-Game Purchases (Includes Random Items)" in April 2020 to be used for games that include loot box-style mechanics. During a November 2018 Congressional hearing over problems with
Cambridge Analytica Cambridge Analytica Ltd (CA), previously known as SCL USA, was a British political consulting firm that came to prominence through the Facebook–Cambridge Analytica data scandal. It was started in 2013, as a subsidiary of the private intelli ...
's data leak and associated with
Facebook Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
and
Google Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
,
Joseph Simons Joseph Simons is an American attorney who formerly served as chairman of the Federal Trade Commission. Education Simons received a Bachelor of Arts in economics and history from Cornell University in 1980 and his Juris Doctor The Juris Docto ...
, chairman of the
Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
(FTC), promised to Congress that the FTC will investigate loot boxes, considering the potential market value of microtransactions. After the government had shut down in early 2019, delaying the FTC review, Hassan pushed on the FTC to provide an update on their review of loot boxes. The FTC held a public hearing on loot boxes on August 7, 2019, addressing industry representative and reviewing public comments submitted prior to the meeting. During the meeting, ESA representatives stated that Microsoft, Nintendo, and Sony are working on developing requirements for new or updated games using loot boxes, published on their respective console systems, to disclose the odds for items from loot boxes. Other publishers within the ESA, including Activision Blizzard, Bandai Namco, Bethesda, Bungie, Electronic Arts, Take-Two Interactive, Ubisoft, Warner Bros., and Wizards of the Coast, also stated they are committed to doing the same for other gaming platforms such as on personal computers, as to align with the existing requirements for the iOS App Store and Google Play mobile platforms. These efforts are expected to be in place before the end of 2020, according to the ESA.
Nintendo is a Japanese Multinational corporation, multinational video game company headquartered in Kyoto, Japan. It develops video games and video game consoles. Nintendo was founded in 1889 as by craftsman Fusajiro Yamauchi and originally produce ...
issued a new policy the next day to reflect the statement made to the FTC, requiring loot box odds to be published for all new and updated games on its systems, and assuring such games with in-game purchases could be regulated by parents on their
Nintendo Switch Online Nintendo Switch Online (NSO) is an online subscription service for the Nintendo Switch video game console. Nintendo Switch Online features include online multiplayer, cloud saving, voice chat via a smartphone app, access to a library of Ninten ...
app.
Epic Games Epic Games, Inc. is an American video game and software developer and publisher based in Cary, North Carolina. The company was founded by Tim Sweeney as Potomac Computer Systems in 1991, originally located in his parents' house in Potomac, M ...
affirmed they would also follow similar policies as adopted by the ESA and other publishers, already having taken steps to eliminate loot boxes from ''
Fortnite ''Fortnite'' is an online video game developed by Epic Games and released in 2017. It is available in three distinct game mode versions that otherwise share the same general gameplay and game engine: ''Fortnite Battle Royale'', a free-to-p ...
'', ''
Rocket League ''Rocket League'' is a vehicular soccer video game developed and published by Psyonix. The game was first released for Windows and PlayStation 4 in July 2015, with ports for Xbox One and Nintendo Switch being released later on. In June 2016, ...
'' and other games in its portfolio.


Worldwide

Apple implemented changes to the
iOS App Store The App Store is an app store platform, developed and maintained by Apple Inc., for mobile apps on its iOS and iPadOS operating systems. The store allows users to browse and download approved apps developed within Apple's iOS Software Deve ...
in December 2017, requiring developers that publish games to the Store that include monetised loot boxes or other similar mechanisms that provide random items in exchange for real-world funds, to publish the odds of items that can be received from these mechanisms prior to the player spending funds on the game. Google followed suit by May 2019, requiring apps in the
Play Store Google Play, also known as the Google Play Store and formerly the Android Market, is a digital distribution service operated and developed by Google. It serves as the official app store for certified devices running on the Android operating syst ...
using loot box mechanics to publish their odds. In November 2018, the
International Game Developers Association The International Game Developers Association (IGDA) is a nonprofit professional association whose stated mission is to "support and empower game developers around the world in achieving fulfilling and sustainable careers." The IGDA is incorpo ...
(IGDA) urged the video game industry to take action on loot boxes before governments step in to regulate them. IGDA identified three areas for the industry to focus on: commit to not marketing loot-box mechanics to youth, disclose the odds of receiving items in loot boxes, and educate parents on in-game parental controls. In February 2019,
review aggregator A review aggregator is a system that collects reviews of products and services (such as films, books, video games, software, hardware, and cars). This system stores the reviews and uses them for purposes such as supporting a website where users ...
OpenCritic OpenCritic is a review aggregation website for video games. OpenCritic lists reviews from critics across multiple video game publications for the games listed on the site. The website then generates a numeric score by averaging all of the numeric ...
began incorporating details about games that use loot boxes into its summary pages for games. In the academic literature, King and Delfabbro proposed twenty-four "social responsibility" measures that could be implemented by video game companies to prevent or reduce overspending on loot boxes. However, the willingness of the industry to adopt these measures has been questioned because of the industry's economic interests.


Litigation

In February 2020, two separate class-action lawsuits were filed in France against Electronic Arts over the Ultimate Team part of the ''FIFA'' games asserting it is equivalent to unregulated gambling. One class member asserted they spent over on Ultimate Team packs and never received a high-ranking place, which was necessary to get to be able to compete online with other players. The suits also contend that the ''FIFA'' games lack any parental controls to limit spending, which, combined with the pay-to-win nature of Ultimate Team, encourage underage gambling, directly referencing the 2019 decisions from Belgium and the Netherlands. A class-action lawsuit filed in California in June 2020 against Apple asserted that through the games using loot boxes mechanics offered by Apple's App Store, Apple "engages in predatory practices enticing consumers, including children to engage in gambling and similar addictive conduct in violation of this and other laws designed to protect consumers and to prohibit such practices". The lawsuit asserts that with these apps, Apple allows their devices to become unauthorised gambling devices which are illegal under California's code. Another class-action lawsuit was filed against EA in California in August 2020 over their Ultimate Team loot boxes in ''FIFA'' and ''Madden NFL'' games, with the plaintiff represented by the same legal firm as the June 2020 case against Apple. The EA case seeks a jury trial to decide if the Ultimate Team loot boxes are considered gambling mechanisms under California law, and seek in damages. Yet another lawsuit brought against EA in California in November 2020 asserted that the Dynamic Difficulty Adjustment feature used in the ''FIFA'', ''Madden NFL'', and ''NFL'' series, each which use a variation on the Ultimate Team approach, is purposely designed to alter the playing habits of gamers to reduce their chances of gaining Ultimate Team drops in game and draw them to purchase such items through microtransactions. This lawsuit was dropped in March 2021 after EA provided technical information and gave the plaintiff access to their engineers to make the assessment that the Dynamic Difficulty Adjustment was not used in any of the Ultimate Team modes. A class action lawsuit was filed in Illinois against Take Two Interactive in January 2022 for the use of loot box mechanics in the ''
NBA 2K ''NBA 2K'' is a series of basketball sports simulation video games developed by Visual Concepts and released annually since 1999. The premise of the series is to emulate the sport of basketball, and more specifically, the National Basketball A ...
'' series. The lawsuit, filed by the parent of a minor, states that the games "psychologically distance" the implications of loot box purchases from real-world financial costs, and thus engages in deceptive practices.


Impact

As a result of the heightened criticism and regulation in late 2017, developers and publishers have pulled loot boxes from their games. Such games include ''Star Wars Battlefront II'', '' Dauntless'', ''Middle-Earth: Shadows of War'', ''Forza Motorsport 7'', and ''
Rocket League ''Rocket League'' is a vehicular soccer video game developed and published by Psyonix. The game was first released for Windows and PlayStation 4 in July 2015, with ports for Xbox One and Nintendo Switch being released later on. In June 2016, ...
''. Others have adopted other monetization schemes that eliminate the random elements associated with loot boxes, such as challenge-based
battle pass In the video game industry, a battle pass is a type of monetization approach that provides additional content for a game usually through a tiered system, rewarding the player with in-game items for playing the game and completing specific chal ...
es stemming from ''
Fortnite Battle Royale ''Fortnite Battle Royale'' is a free-to-play battle royale video game developed and published by Epic Games. It is a companion game to '' Fortnite: Save the World'', a cooperative survival game with construction elements. It was initially re ...
''. Other games have kept loot boxes but altered how they can be purchases or their mechanics to eliminate some of the randomness and gambling attributes associated with them. In March 2019, ''
Heroes of the Storm ''Heroes of the Storm'' is a crossover multiplayer online battle arena video game developed and published by Blizzard Entertainment. It was released for Microsoft Windows and macOS on June 2, 2015. The game features various characters from Bli ...
'' removed the ability to buy loot boxes with real money. Loot boxes with random content are still available as free in-game rewards, but, after the March patch, cosmetic options are available for direct purchase with real money as well. In January 2019,
Epic Games Epic Games, Inc. is an American video game and software developer and publisher based in Cary, North Carolina. The company was founded by Tim Sweeney as Potomac Computer Systems in 1991, originally located in his parents' house in Potomac, M ...
adjusted the mechanics of '' Fortnite: Save the World'' loot boxes that are purchased with real-world funds, allowing purchasers to see the contents of the loot box before buying, as to address concerns of loot boxes being related to gambling. EA introduced a similar mechanic in ''FIFA 21'' in June 2021 called Ultimate Team Preview Packs, allowing users to preview the contents of these packs before they purchase.


References

{{Video game monetization Game design Business models Gambling terminology Video game controversies 2010s neologisms Video game law Gambling legislation