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By Ray Kahler

Unless parents and grandparents play video games themselves, it can be challenging for them to know what children are really doing when playing video games.  It would come as a surprise to many parents and grandparents that the money they have given children to play video games has been used for gambling.

“Loot boxes” in video games have been the subject of increasing concern by researchers and governmental authorities in recent years. 

A loot box is a virtual item that can be opened by video game players to receive a seemingly randomized selection of other virtual items.  Players typically need virtual “keys” to open loot boxes.  In some games, keys are obtained during game play, but in many games, keys must be purchased with real-world money.  Sales of keys has become a massive revenue stream for game developers – reportedly in the billions of dollars per year.

The process for opening a loot box often involves visual and audio effects modeled on slot machine interfaces:

The variable reward is overt in many gaming applications.  . . . [M]any online games offer “loot boxes” to players in exchange for micropayments of a dollar or two.  After paying the loot box opens in an animated sequence to reveal a pseudorandomized set of in-game items such as character upgrades.  Some items are rare, and some are junk; the similarity to the ups-and-downs appeal of the slot machine is impossible to miss.

Langvardt, Regulating Habit-Forming Technology, 88 Fordham L. Rev. 129, 144 (2019).

When players open some loot boxes, they simply show the player the specific items that they have received.  However, this is not the case for all loot boxes.  Some loot boxes do not just show them the items that they have won, but also display “near misses” of items that they almost seem to have won.  For example, in the Multiplayer Online Battle Arena DOTA 2, the game displays a row of spinning rewards of varying levels of rarity and prestige.  These rewards disappear one after another until only a single reward remains.

Zendle D, Meyer R, Over H, 2019 Adolescents and loot boxes:  links with problem gambling and motivations for purchase, R. Soc. Open Sci. 6: 190049, p.4.

The virtual items that players obtain from loot boxes often can be sold/traded for cash or other items of real-world value.  In some games, the virtual items contained in loot boxes are called “skins” – virtual items that alter the appearance of a player’s weapons used in the game.  “Skins” can be bought, sold, or traded on various websites for real-world money.  Depending on their rarity and desirability, skins might have a value of less than a dollar or more than $1,000.  Zendle D, Meyer R, Over H, 2019 Adolescents and loot boxes:  links with problem gambling and motivations for purchase, R. Soc. Open Sci. 6: 190049, p.3.

. . . [W]hen players buy a loot box, they are not paying for something specific – they are, instead, paying for something that appears to be randomly selected from a list.

For example, in the popular first-person shooter Counter-Strike:  Global Offensive, players can pay $2.49 to open a sealed “weapon case.”  Cases may contain extremely rare and valuable “skins” that change the appearance of players’ weapons.  In fact, some of these skins are so prestigious and uncommon that they can be re-sold on secondary markets for many thousands of dollars.  However, when paying to open a loot box, players of Counter-Strike also run the risk that the case they have paid to open contains an unappealing or common item, rather than a rare or desirable one.  There is no way for them to tell what they will get when they pay their money. . . .

Zendle D, Meyer R, Over H, 2019 Adolescents and loot boxes:  links with problem gambling and motivations for purchase, R. Soc. Open Sci. 6: 190049, p.2.

Gambling authorities in the Netherlands and Belgium have classified loot boxes as gambling.  China and South Korea have required game developers to disclose the probabilities of obtaining certain items.  Langvardt, Regulating Habit-Forming Technology, 88 Fordham L. Rev. 129, 161 (2019).

The legal age for gambling in Washington is 18.  But children can gamble online by buying loot box keys – and even become addicted to gambling – before they can legally play a slot machine at a casino.

Government leaders in the United States and Europe have raised concerns about children becoming addicted to gambling by playing video games with loot boxes.  In January 2020, the mental health director of the England’s National Health Service, Claire Murdoch, called on game companies to ban the sale of games with loot boxes that encourage children to gamble and to set spending limits to prevent people from spending thousands of dollars on loot boxes.

Researchers have found that adolescents are particularly susceptible to problem gambling, because “the immaturity of various aspects of brain structure and function are linked to increased impulsivity among adolescents,” and because adolescents may turn to gambling activities “as a way to escape painful states” during a difficult time of life.  Zendle D, Meyer R, Over H, 2019 Adolescents and loot boxes:  links with problem gambling and motivations for purchase, R. Soc. Open Sci. 6: 190049, p.3.

A lawsuit relating to money spent by children on loot boxes sold in Counter-Strike: Global Offensive is pending in federal court in Washington.  For more information, contact Stritmatter Kessler Koehler Moore at 360-533-2710 or counsel@stritmatter.com.