Loot boxes or Pandora's boxes? Why paid for rewards in video games may be more sinister than they appear

Children playing video games (Illustrated by Tracey Worrall)

Sophie Church

@sophiealichurch

If you have not heard of a loot box before, you could perhaps ask one of the estimated 93 per cent of children in the United Kingdom who play video games for a definition.

They would describe a virtual treasure chest found within a game that springs open to reveal a random prize: perhaps a weapon; or customisation for the player’s avatar; or a piece of armour. Loot boxes offer just that: loot.

But opening these chests comes at a cost. Where video games were once bought on a disc, now gaming companies present players with constant opportunities to trade virtual currency – or even real-world money – on items like loot boxes. This changed state of play – where competitors are encouraged to progress their game through spending on casino-inspired systems – has led many to question whether loot boxes are a form of gambling. Vulnerable groups such as children, gambling addicts or those with learning difficulties are thought to be particularly at risk, with research suggesting that young people who spend money on loot boxes are 10 times more likely to be problem gamblers in the future.

It did not make any sense because I thought my daughter would need my credit card details to buy anything in a game, or she would have to have my permission first

The conversation around loot box harm has also brought renewed focus onto a much-anticipated review of the 2005 Gambling Act, which, having appeared in the Conservative Party’s 2019 manifesto, has since been delayed by successive ministerial resignations. When the Gambling Commission identified a lack of legislation relating to loot boxes in the Gambling Act in 2016, efforts were made to address the issue. In 2019, the Digital, Culture, Media and Sport Committee called for loot boxes to be brought within the scope of the Gambling Act, and in 2020, a House of Lords committee report on gambling harm said the same.

In response, the government launched a call for evidence into the impact of loot boxes on gambling-like behaviour. The results, published in July 2022, “found an association between loot boxes and harms,” but did not find “a causative link.” The response went on to say that “games developers, publishers and platforms operating in the UK must take responsibility for ensuring player safety, and work collaboratively to find tangible industry-led solutions,” and that “children and young people should not be able to purchase loot boxes without parental approval.”

The response disappointed those who had been looking to the government to bring loot boxes into legislation – not least Liberal Democrat peer Lord Foster, who is chair of the Peers for Gambling Reform group. “I know the gaming industry contributes £7.16bn to our economy, but this is such a feeble response to such powerful evidence,” he says. “The government saying they are going to leave it to the industry to come up with solutions, and that they expect parents to supervise their children more is totally unrealistic. It is frankly gobsmacking.”

Samantha Turner, a mother-of-four from Hampshire, is among those who feel that the government’s response apportioned responsibility to the wrong places. When she happened to check her family’s phone bill – where a few numbers are on the same account – she noticed the amount varied from month to month. After looking closer, she saw references to “in-game purchases” logged next to the phone of Beatrice, her 12-year-old daughter. Over the course of six months, Beatrice had unintentionally spent around £750 on virtual prizes.

Turner had previously taken steps to assure Beatrice’s safety online: setting up parental controls on the phone when buying the device and notifying her phone contractor that the phone would be for a minor. “It did not make any sense because I thought my daughter would need my credit card details to buy anything in a game, or she would have to have my permission first,” she says.

But while playing Roblox, Beatrice was given the option to pick up rewards. “There was something about the set up that was guiding her, so that the purchase would be hidden and I may not notice,” she says. “I am absolutely convinced that the gaming company was taking advantage of my daughter.” When Turner confronted Beatrice, she was shocked by the amount of debt. She had not been aware she was doing anything wrong.

Other young people have developed addictive behaviours from in-game spending. Speaking about his experiences in a research project led by Newcastle University, a teenager told how he had made 15 transactions in the space of a week, spending £464 in total. “The game just got better and better as I spent more money and I got addicted to it,” he said. The boy remembered crying, knowing his family did not have the financial reserves to absorb these repeated expenditures. Turner also recounts stories of friends whose children have “got hold of their credit cards” to buy loot boxes. 

Dr Jane Rigbye is chief executive of the Young Gamers and Gamblers Education Trust, which works with teachers, parents and carers to protect young people from gambling harms. “Those who are responsible for the wellbeing of young people are telling us that gaming changes behaviours and moods,” she says. “Children are opting to spend money because their friends are, or because they want to progress to the next stage of the game or get other in-game rewards.” Dr Rigbye goes on to question “whether the psychological mechanisms underpinning loot boxes might be impacting how the brain responds to gambling when children are older.”

While Rigbye thinks the government’s decision to not classify loot boxes as gambling is “a missed opportunity to be a world leader in the regulation of video gaming,” Lord Foster is approaching the issue pragmatically. “It is amazing how you could make use of the 2005 Act to bring in a lot of changes – we are looking at what can be done, without necessarily needing primary legislation.”

And the government is also taking steps to tackle the problem. Jo Twist is chief executive officer of the Association for UK Interactive Entertainment, a trade body representing the UK games industry. She says that a technical working group – comprising experts from government, gaming companies and mobile platforms – has been working in this area since the end of the summer. The group “looks at what could go further”: limiting the sale of loot boxes to children unless they have parental permission and investing £3m into an information campaign that will promote responsible gaming, for example.

For Twist, education is key to safeguarding vulnerable gamers. “It is absolutely critical that information about the probabilities of finding loot boxes in games is available and understood by parents and carers,” she says. In recognition of that, the gaming industry has introduced a new descriptor for the Pan-European Game Information age ratings system, which warns that there is a paid-for random item in a particular game.

With more information at their disposal, Twist argues that young gamers could be better equipped to deal with all sorts of online dangers. “We find that children who play online games are actually far more savvy when it comes to understanding how to block people, or how to do friends lists, or how to protect their privacy,” she says. “They are actually more literate when it comes to navigating a digital world. And that is exactly the kind of literacy we need to equip children with, because the 21st century is a digital world."

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