Video game loot box: A digital gateway drug into gambling?

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  Quantumrun Foresight
• May 6, 2022

Insight summary

The allure of loot boxes in video games, similar to the thrill of gambling, has caught the attention of researchers and advocacy groups, highlighting a pressing need for regulation to curb potential misuse and to foster responsible gaming. A study commissioned by GambleAware unveils a significant engagement with loot boxes among children, with a notable portion of revenue generated from a small fraction of players, many of whom face financial hardships. As discussions advance, the industry grapples with the challenge of maintaining the excitement of gaming while introducing ethical and profitable alternatives to loot boxes.

Video game loot box context

Loot boxes that promise rare finds are common in online video games, and researchers have found that loot boxes encourage patterns and behaviors similar to playing slot machines. Video game loot boxes contain random in-game collectibles, such as rare weapons or skins (a graphic or audio download that changes the appearance of characters or items in video games), that can be traded with other players for more money. These boxes can be earned by playing for long durations or buying them with real money. 

A report commissioned by nonprofit organization GambleAware and conducted by the universities of Plymouth and Wolverhampton in the UK discovered that loot box mechanics use similar tactics used to encourage gambling. The study also found that of the 93 percent of children who play online games, 40 percent of them opened loot boxes. Furthermore, a majority of the income from loot boxes came from just 5 percent of total players, with it found that most of these players have financial problems or difficulties.

Among the interviewed respondents of the study, most of them cited the thrill of opening an unknown loot box as the main motivator. This thrill is further encouraged by game developers who add flashing lights and signs similar to those in slot machines in casinos. The pressure to show off the content and the possibility of trading them for a higher value drives some players to spend over USD $100 per month on loot boxes.

Disruptive impact

Organizations such as GambleAware advocate for stringent regulations similar to those governing the gambling industry. These measures include mandating game developers to clearly indicate the presence of loot boxes in their games, stipulating the age ratings for these loot boxes, and being transparent about the low probability of obtaining rare items. While some regions like the UK have initiated the process of embracing restrictions for games featuring loot boxes, there is a call for a more widespread adoption of these measures, encouraging players to set limitations and promoting responsible gaming.

As the discussion evolves, there is a possibility that sections of games involving loot boxes may become highly restricted. Players might be asked to provide personal and financial details to help gaming companies identify and protect at-risk individuals, including minors and those facing financial difficulties. This trend requires a careful balance to maintain gaming enjoyment while instituting safeguards. Companies may need to innovate, finding ways to retain engaging game dynamics without relying heavily on loot box revenues, possibly through the introduction of alternative reward systems that are both ethical and profitable.

Regulatory bodies could work towards establishing frameworks that hold gaming companies accountable, ensuring they adhere to policies designed to protect vulnerable groups. This move could include educational initiatives to help players understand the mechanics and odds associated with loot boxes, fostering a culture of informed gaming. Moreover, governments can facilitate cross-sector collaborations, bringing together industry stakeholders, mental health experts, and educational institutions to study the long-term effects of loot boxes and develop strategies that prioritize the well-being of players while sustaining the vibrancy of the gaming industry.

Implications of video game loot boxes 

Wider implications of video game loot boxes may include:

• A potential decrease in the number of free games available to consumers, as gaming companies might opt to recover revenue losses stemming from reduced loot box sales through the introduction of higher prices for digital game purchases.


• Gaming companies experiencing declines in annual revenue, particularly those that have heavily relied on loot boxes and in-game purchases as their primary source of income, leading to a reevaluation and possible transformation of their business models.


• Video game developers exploring subtler mechanisms to facilitate in-game purchases, steering away from the traditional loot box system, and possibly introducing a variety of monetization strategies that are more user-friendly and less reliant on chance.


• The integration of gambling counseling services within gaming platforms, including emerging spaces like the metaverse, as developers collaborate with counseling services to offer assistance in-game, fostering a safer and more responsible gaming environment.


• A shift in the demographic profile of gamers, with a potential decrease in young players as stricter age verification processes are implemented, leading to a more adult-centric gaming market.


• The labor market within the gaming industry adapting to new regulatory landscapes, possibly seeing a rise in opportunities for professionals specializing in compliance, ethics, and mental health to work closely with game development teams.


• Technological advancements in game development focusing on creating rewarding and ethical gaming experiences, which might see a decline in the emphasis on graphics and hardware, and a renewed focus on storylines and player experiences.


• Social movements and advocacy groups potentially gaining momentum, as they work towards raising awareness about the negative impacts of loot boxes, fostering a community of informed players and encouraging responsible gaming habits.

Questions to consider

• If you’re a gamer, do you purchase loot boxes, and do you believe it promotes gambling-like behavior?


• How do you think loot boxes will be offered or reimagined in future video games?