A UK charity aiming at reducing gambling-related harms has commissioned a report that has “robustly verified” links between loot boxes in video games and gambling.
The report, conducted by the University of Plymouth and the University of Wolverhampton ahead of the upcoming Gambling Act review, consolidated results from a dozen studies and found that loot boxes are “structurally and psychologically akin to gambling.”
The new research, commissioned by the GambleAware charity, compiles existing research to examine the strength of links between the in-game random prizes and gambling behaviour. It found:
- Of the 93% of children who play video games, up to 40% opened loot boxes
- About 5% of gamers generate half the entire revenue from the boxes
- Twelve out of 13 studies on the topic have established “unambiguous” connections to problem gambling behaviour
- Young men are the most likely to use loot boxes – with young age and lower education correlating with increased uses
The report said that many games use a “psychological nudge” to encourage people to buy loot boxes – such as the fear of missing out on limited-time items or special deals.
Looking at 7,771 loot box purchasers, the report showed around half of the revenue generated by loot boxes — worth £700 million total in the UK in 2020 — comes from 5% of buyers.
“A third of these gamers were found to fall into the ‘problem gambler’ category, establishing a significant correlation between loot box expenditure and problem gambling scores,” GambleAware said.
The report also looked into the habits of 14,000 players and found that young men and those with a “lower educational attainment” are more likely to purchase loot boxes.
“The interviews also highlight that the digital assets in loot boxes often have real-world and/or psychological value,” GambleAware continued. “This suggests that loot boxes could be regulated under existing gambling legislation.”
The charity called for policies to be put in place, including a clear definition of what constitutes a loot box, enforceable age ratings on games, full disclosure of the odds when purchasing, spending limits, and prices displayed in real currency (as opposed to in-game currency).
Dr James Close, senior research fellow at the University of Plymouth and co-author of the report, commented: “Our work has established that engagement with loot boxes is associated with problem gambling behaviours, with players encouraged to purchase through psychological techniques such as ‘fear of missing out’. We have also demonstrated that at-risk individuals, such as problem gamblers, gamers, and young people, make disproportionate contributions to loot box revenues. We have made a number of policy suggestions to better manage these risks to vulnerable people, although broader consumer protections may also be required.”
At the end of 2020, a study by the Gambling Health Alliance suggested that young people struggle to keep track of how much they have spent on loot boxes. 23% of 11 to 16-year-olds said they had paid money to open loot boxes, with 34% of all respondents saying they had first purchased them by the time they were 13, due to the lack of age restrictions on games containing the randomised monetisation mechanic.
Germany recently passed a proposed reform to the country’s youth protection law, which could result in new standards being applied to video games featuring loot boxes.
Loot boxes are expected to generate $20 billion worldwide by 2025.
