Loot boxes face scrutiny from an international coalition of gambling authorities

By Devin Coldewey on Sep 17

The world of online gaming is changing so quickly that players, developers, publishers and regulators are all scrambling to keep up with each other. Case in point: loot boxes, randomized in-game rewards that may or may not have monetary value or be purchasable with real money, are after years of deployment only now being scrutinized globally for being what amounts to thinly veiled gambling.

A suggestive new study from British researchers and a just-announced coalition of governments are the latest indicators that the loot box phenomenon and its derivatives likely won’t continue to be the wild west they’ve been for the last few years.

Many factors have led games to resemble services or channels more than pieces of entertainment with a start and end. And that in turn has changed how these games are monetized. As an alternative to a $60 up-front cost or a $10/month subscription, a game may be released for free but supported with in-game purchases of various kinds, including loot boxes.

Loot boxes usually contain a random reward, such as a new item for your in-game character. They can be earned by playing the game (usually a lot), but often can also be bought. Not only this, but the items have a sort of black market value and are traded among players and indeed gambled in a highly unregulated economy that reports put on the order of billions of dollars.

Although gaming companies compare it to collecting baseball cards or getting a toy in a box of cereal, the reality is plainly more complex than that, and the idea has led to extreme versions where players are constantly urged to buy in-game currencies and rewards. There’s no doubt that companies like EA and Tencent have made enormous amounts of money by luring players into purchases in “free to play” games.