Will game studios’ gamble on loot boxes pay off as regulations increase? – gotechbusiness.com


you would be hard pressed to find a game that doesn’t include any kind of microtransactions these days, especially in mobile games. It just makes sense for gaming companies – a hugely lucrative source of income, the microtransactions market was worth $60 billion $106 billion in 2021 and expected to be $106 billion by 2026.

Usually offered as in-game collectibles, currency, or randomized loot boxes, microtransactions are now better received than they were a few years ago. Loot boxes, which allow players to receive random in-game rewards in exchange for real money, have been discredited for a while and are now increasingly controlled by the government.

Loot boxes have become a problem because they encourage spending real money for a miniscule chance to get hold of valuable in-game items, usually leaving players with nothing to show but the desire to continue betting for better items. Companies have been known to employ predatory sales tactics to sell loot boxes, thereby giving minors a chance to gamble. Despite Electronic Arts (EA) insistence that loot boxes are not gambling, and in fact “surprise mechanics”, several studies have shown that there is a link between loot boxes and gambling addiction.

Redemption of red tape

When Belgium forbidden loot boxes in 2018 it looked like the first domino had fallen and more regulations from other countries would soon follow. However, the subsequent response has been slow, despite countries like the UK agree that loot boxes are a problem that needs to be addressed.

One of the biggest hurdles for countries trying to regulate loot boxes is that they fall short of their current definitions of what gambling is, allowing companies to offer them and continue to operate outside of traditional gambling rules.

The Netherlands, following in the footsteps of the Belgian ban, also tried to get the gears moving by fine electronic art in 2019 on the inclusion of loot boxes in the popular FIFA franchise. This fine was toppled earlier this year after appeal.

However, EA could not celebrate its victory for long, as the Netherlands is doing now pushed to update legal definition of gambling to ensure better regulation of loot boxes. It remains to be seen whether this will result in an outright ban, or lead to EA requiring a gambling license and all associated regulations. If it happens, it’s likely that EA will simply remove the offending loot boxes from games sold in the Netherlands, similar to its response to the ban in Belgium.


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