Loot Boxes and Their Effect on Consumers

Loot boxes are video game elements that may be found in a variety of gaming categories, such as card, shooter, sports, and role-playing games. They can be accessed through gameplay or purchased with real cash. The participants have no idea what’s inside these boxes, therefore they’re called “mystery boxes”. Loot boxes feature a variety of in-game objects with varied levels of value and use, such as decorative items for game customization or things that impact in-game performance. Normally, players devote time in the game in order to gain stuff, however loot boxes provide players the opportunity to receive items immediately. Actually, certain items can only be obtained by purchasing loot boxes.

The majority of loot box items are just decorative, altering different in-game appearances. Other items, on the other hand, improve the player’s experience, such as making a character stronger and therefore giving them a competitive edge over other players, either those who buy or those who do not buy loot boxes. Loot boxes feature a variety of items of different rarity and worth. The majority of items have minor in-game impacts and aren’t extremely valued. Rarer things, on the other hand, may have a big impact on the game and are very valued.

Loot boxes are not a brand-new concept. They’re inspired in part by tangible items with a random aspect of reward, such as sealed booster packs of trading cards from video games. Actually, loot box items in some games may be sold among players in the video gaming community, much like physical trading cards, and they are frequently traded for real money. While they have helped the industry to grow rapidly and produce spectacular advances, they have also sparked debate and drawn the attention of policymakers. Some claim that loot boxes blurred the borders between gaming and online gambling because of their random content, which might be particularly problematic for children and underage users. Furthermore, some players dislike loot boxes because they feel compelled to spend actual money on in-game purchases.

In-game purchases, like paid loot boxes, are a significant source of revenue for game producers, but they also present serious consumer protection problems. Loot boxes are similar to gambling games because of their random payout methods. There have been concerns that they might act as a ‘gateway’ between gaming and gambling. Because many games with loot boxes also are played by minors, this would represent a unique issue for child and adolescent safety. ConPolicy undertook an in-depth analysis of loot boxes at the demand of the European Parliament’s Internal Market and Consumer Protection Committee. The study’s goal was to give the Committee a review of what loot boxes are and related in-game purchase mechanisms, as well as to better understand the behavioral consequences of loot boxes on players, with a focus on young users, examine legal proceedings, and identify best practices and policy choices.

What was the problem?

The issue appears to be the possibility of user financial damage. Predictably, there have been reports of customers, usually minors, paying large sums of money for loot boxes in order to obtain items that have only a very small chance of being awarded. The items are frequently pursued as collectibles due to their intrinsic rarity, to increase a competitive gaming experience, or for eventual trade inside the community for profit. Paid loot boxes are connected to problem gambling, according to psychological research: problem gamblers spend a considerable amount of money on loot boxes, and loot box spending might lead gamers to build problematic gambling behaviors. Also, according to some researchers, loot boxes are either virtual games of luck or a planned attempt to convert gamers into gamblers. Furthermore, loot box construction may take advantage of gambling-related irrational decision-making errors and misconceptions to encourage players to spend a lot more money than they expected or are able to afford.

Types of loot boxes

Loot boxes come in a variety of types. They differ in the following ways:

• Cost and accessibility: Loot boxes may be obtained through gaming, waiting time, ad-viewing, or purchasing. Their prices might differ considerably.

•  Transparency and chances of receiving various loot box items: Loot box items might be common or uncommon. Although key industry players have agreed to increase transparency in this area, the player’s chances of acquiring certain items might be known or unknown before opening a loot box.
  
• Content: They contain variable amounts of decorations (for example skins) or gameplay-related goods (example: equipment, maps).
  
• Value converting: The contents of loot boxes can be converted into actual money occasionally. Despite the fact that this looks to be an unwelcome marginal occurrence, it does exist and relates loot boxes to gambling.

The impact of loot boxes in online games on users

While several experts and authorities consulted believe that not all treasure boxes are dangerous, they can be accompanied by poor game designs that can have negative psychological and financial implications. Some typical game designs reflect addictive conditioning patterns, such as those found in slot machines. Offers and prices that are unclear might lead to unintended or uncontrolled purchasing. These designs, however, are not restricted to loot boxes only and may be found in a variety of games.

Despite the fact that many games featuring loot boxes are not especially aimed towards children, they continue to play and pay. In contrast to adults, it seems that children may be more prone to bad game designs. It is because children have a lower capacity to exercise self-control and have a harder time comprehending game value and probability.