{"id":243871,"date":"2021-11-08T03:48:29","date_gmt":"2021-11-08T10:48:29","guid":{"rendered":"https:\/\/gamesync.consulting\/?p=243871"},"modified":"2023-02-10T22:34:43","modified_gmt":"2023-02-11T05:34:43","slug":"the-action-against-loot-boxes-is-a-wake-up-call-for-the-industry","status":"publish","type":"post","link":"https:\/\/gamesync.consulting\/the-action-against-loot-boxes-is-a-wake-up-call-for-the-industry\/","title":{"rendered":"The Action Against Loot Boxes Is a Wake up Call for the Industry"},"content":{"rendered":"[et_pb_section fb_built=”1″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” text_font_size=”18px” text_line_height=”1.8em” header_2_font=”Poppins|700|||||||” header_2_font_size=”32px” header_2_line_height=”54px” hover_enabled=”0″ sticky_enabled=”0″]\n

The esports industry has grown exponentially over the past few years. The future projections show an increasingly profitable industry with higher revenues, visibility and player base. However, as we move further into the next phase of esports, certain old practices are coming under legal scrutiny.<\/p>\n

In the first half of 2018, several European nations have scrutinized the place of loot boxes in the video gaming industry. Loot Boxes are one of the prevalent ways for game developers to maintain a steady stream of income while allowing their games to be free of cost. The advantage of such a business model is in the greater reach to the masses, while enticing users to open more boxes via the help of audio-visual cues.<\/p>\n

Loot Boxes can be called the golden goose of the esports industry. It dramatically increased the revenues for game developers and Valve was one of the first to successfully use loot boxes to further their revenue source. The vast success of Dota 2 and the revenue model ensured that they have a significant source of income.<\/p>\n

However, Loot Boxes constitute a form of gambling, at least according to the Dutch Gaming Authority. They have specifically pointed out four games which are illegal according to their laws but have also sent a statement to the industry as a whole.<\/p>\n

What Is a Loot Box?<\/h2>\n
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Overwatch has its loot boxes on sale within the game client<\/p>\n<\/div>\n

A loot box is a consumable virtual item which can be opened to provide further cosmetic, virtual items. These virtual items can be in the form of customization to existing items as well as game-changing equipment which boosts your character\u2019s efficiency.<\/p>\n

When a user opens a loot box, he stands a chance to win a virtual item. However, a player needs to use real money directly or indirectly to open a loot box. The loot box can be purchased directly via payment or a user can purchase in-game currency\u00a0\"\"which then opens these loot boxes. The items won from these loot boxes ideally should not have any monetary value according to the game developers.<\/p>\n

However, many of these game developers have also enabled a trading system wherein users can trade items. These items are meant to be traded for one another, but it breeds a gray market where users pay real money for the items. The monetary value of an item depends on its visual effects, it\u2019s efficiency in the game as well as rarity. Assigning a real money value to the items essentially tilts the definition of Loot Boxes as a whole. The Dutch Gaming authority found some of the games illegal according to the Dutch Betting and Gambling act which centers around the concept of betting and gambling real money on items that can be traded outside of the game. The Authorities published a paper which notes that \u2018the content of these loot boxes is determined by chance and\u2026 the prizes to be won can be traded outside of the game: the prizes have a market value.\u2019<\/p>\n

The Dutch Gaming Authority Cracks the Whip<\/h2>\n

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Following several complaints by players and parents alike in November 2017, the Dutch gaming Authority took it upon itself to broaden its scope. They studied the top ten games on Steam and decided that certain games with loot boxes will be considered gambling under the Dutch Betting and Gambling Act.<\/p>\n

It is important to note that they have decided to take action only against certain games and not all ten. The criteria for the choice seems to be the real world value of these loot boxes and the contents within. The potential for resale on these loot boxes provides a real-world value to the virtual items after the initial purchase. While the report does not specifically name the four-game titles, a report by\u00a0nos.nl<\/a>\u00a0suggests that the\u00a0titles are: Dota 2, FIFA 18, Players Unknown BattleGrounds ( PUBG) & Rocket League. Ofcourse while the veracity of this list is uncertain, the titles do present a condemning case for the classification. Each of the titles has a vibrant trading system where the user can trade items he receives via loot boxes. This trading system essentially puts a value on the items which are often sold in lieu of real money as well.<\/p>\n

AudioVisual Cues during Lootbox opening is a strong gambling cue<\/h5>\n
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Lootboxes have similar audio-visual cues to slot machines<\/p>\n<\/div>\n

Despite real money sales breaking several marketplace rules, it is a reality and is a widespread phenomenon. The loot boxes have several similarities to gambling websites. They play audio and visual cues when opened which is very similar to that of gambling websites. Slot machines in today\u2019s world still play the sound of coins when a user wins something. This is despite the fact that the winnings are usually in the form of a printed paper instead of coins. The audio cues from these incidents trigger certain senses in the human brain. Loot Boxes present something quite similar as they have various visual cues which entice users to gamble more.<\/p>\n

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\u201cThey are designed as gambling games are designed, with the feeling that you have almost won. There are all sorts of sound effects and visual effects when you open such a loot box, so you have a tendency to play through and through.\u201d \u2013 Marja Appelman, director of the Gaming Authority.<\/p>\n<\/blockquote>\n

The remaining six games, where loot box prizes are not tradable are not illegal for now. However, the Gaming Authority does take time to criticize these games as well. They urge the game publishers to remove the feature altogether reminding them of their duty towards young children who use their services.<\/p>\n

A Targeted Action Towards a Vulnerable Group of People<\/h2>\n

The concept of winning prizes via loot boxes and ultimately winning something rare has several similarities to gambling. The design of the entire system targets a vulnerable group of people, children. The majority of video game users are children and are extremely vulnerable to influence. The audio-visual cues from loot boxes and the entire concept of the chance to win a\u00a0\"\"high price virtual item are very addictive.<\/p>\n

The key word here is \u2018chance\u2019. When loot boxes are presented as a game of chance, they have to be subject to the limitations imposed on gambling websites and organizations. But Lootboxes are sometimes presented as a game of skill, which is actually wrong when you consider the process behind the same. The wrongful definition of loot boxes is extremely dangerous since it enables users to think that they can win something if they perform better. The earnings from Loot Boxes are\u00a0projected<\/a>\u00a0to reach $50 billion by 2022, a huge number by any standards. If this industry is left unregulated, it is bound to create addiction problems in young children and become a bigger problem.<\/p>\n

Other Regulatory Authorities Will Follow<\/h2>\n

The Entertainment Software Rating Board ( ESRB) found nothing wrong with loot boxes since they provide a digital item on every purchase. There is no chance of a user \u2018not receiving\u2019 an item and that is why loot boxes are equivalent to gambling. However, the Dutch Gaming Authority clearly rejected the sentiment as they found the concept of loot boxes quite similar to that of gambling. This conclusion is mainly due to the real world value of the loot box prizes.<\/p>\n

The Authority found that addiction is not yet severe amongst the video game users, but the potential for the addiction remains high. The decision by the Dutch Gaming Authority is going to force several European Gambling Authorities to have a closer look at the industry. Other countries are actively discussing the topic and we might soon see more regulations come the way of the industry. The Dutch Gaming Authority has had numerous discussions with other European supervisory bodies regarding the onset of Loot Boxes and gambling in video games.\"\"<\/p>\n

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We have seen several countries already lay down rules regarding loot boxes and the gambling problem.<\/p>\n