scholarly journals Which Implementations of Loot Boxes Constitute Gambling? A Legal Perspective on Random Reward Mechanisms

Author(s):  
Leon Y. Xiao

Loot boxes (LBs) are a contemporary monetisation method in video games that relies on randomisation to encourage repeat purchase by player-consumers. The psychology literature has drawn tentative conclusions on LBs’ connection with gambling. Academics and regulators have examined whether or not LBs constitute gambling in law based on two conditions: whether or not they cost real-world money; and whether or not they offer rewards that can be transferred to other players and are consequently worth real-world money. With two exceptions, the existing literature generally accepts that both conditions must be satisfied for a certain implementation of LBs to constitute gambling. By being overly restrictive with their definitions, the existing literature and regulatory opinions have failed to subject different implementations of randomised game mechanics to sufficient scrutiny in order to identify their potential harm, and have therefore failed to ensure that player-consumers, especially children, are appropriately protected. With a UK law perspective, this paper applies Nielsen and Grabarczyk’s Random Reward Mechanism categorisation framework (2019) for differentiating between various implementations of LBs to example games and argues that all implementations of LBs are potentially harmful because they either involve real-world currency and constitute gambling, or normalise gambling behaviours, and should be regulated.

2019 ◽  
Author(s):  
Leon Y. Xiao

Loot boxes represent a popular and prevalent contemporary monetisation innovation in video games that offers the purchasing player-consumer, who always pays a set amount of money for each attempt, the opportunity to obtain randomised virtual rewards of uncertain in-game and real-world value. Loot boxes have been and continue to be scrutinised by regulators and policymakers because their randomised nature is akin to gambling. The regulation of loot boxes is a current and challenging international public policy and consumer protection issue. This paper reviews the psychology literature on the potential harms of loot boxes and applies the behavioural economics literature in order to identify the potentially abusive nature and harmful effects of loot boxes, which justify their regulation. This paper calls on the industry to publish loot box spending data and cooperate with independent empirical research to avoid overregulation. By examining existing regulation, this paper identifies the flaws of the ‘regulate loot boxes as gambling’ approach and critiques the alternative consumer protection approach of adopting ethical game design, such as disclosing the probabilities of obtaining randomised rewards and setting maximum spending limits. This paper recommends a combined legal and self-regulatory approach: the law should set out minimal acceptable standards of consumer protection and industry self-regulation should thrive to achieve an even higher standard.


Author(s):  
Rune Kristian Lundedal Nielsen ◽  
Paweł Grabarczyk

In this paper we investigate the phenomenon colloquially known as “loot boxes”. Loot boxes became a hot topic towards the end of 2017 when several legislative bodies proposed that they were essentially gambling mechanisms and should therefore be legislated as such. We argue that the term “loot box” and the phenomena it covers are not sufficiently precise for academic use, and instead introduce the notion of “random reward mechanisms” (RRMs). We offer a categorization of RRMs, which distinguishes between RRMs that are either “isolated” from real-world economies or “embedded” in them. This distinction will be useful in discussions about loot boxes in general, but specifically when it comes to the question of whether or not they represent instances of gambling. We argue that all classes of RRMs have gambling-like features, and may be problematic in different ways, but that only one class can be considered to be genuine gambling.


2020 ◽  
Author(s):  
Leon Y. Xiao

Loot boxes represent a popular and prevalent contemporary monetisation innovation in video games that offers the purchasing player-consumer, who always pays a set amount of money for each attempt, the opportunity to obtain randomised virtual rewards of uncertain in-game and real-world value. Loot boxes have been and continue to be scrutinised by regulators and policymakers because their randomised nature is akin to gambling. The regulation of loot boxes is a current and challenging international public policy and consumer protection issue. This paper reviews the psychology literature on the potential harms of loot boxes and applies the behavioural economics literature in order to identify the potentially abusive nature and harmful effects of loot boxes, which justify their regulation. This paper calls on the industry to publish loot box spending data and cooperate with independent empirical research to avoid overregulation. By examining existing regulation, this paper identifies the flaws of the ‘regulate loot boxes as gambling’ approach and critiques the alternative consumer protection approach of adopting ethical game design, such as disclosing the probabilities of obtaining randomised rewards and setting maximum spending limits. This paper recommends a combined legal and self-regulatory approach: the law should set out minimal acceptable standards of consumer protection and industry self-regulation should thrive to achieve an even higher standard.


2021 ◽  
Vol 4 (1) ◽  
pp. 27-47
Author(s):  
Leon Y. Xiao

Loot boxes represent a popular and prevalent contemporary monetization innovation in video games that offers the purchasing player-consumer, who always pays a set amount of money for each attempt, the opportunity to obtain randomized virtual rewards of uncertain in-game and real-world value. Loot boxes have been, and continue to be, scrutinized by regulators and policymakers because their randomized nature is akin to gambling. The regulation of loot boxes is a current and challenging international public policy and consumer protection issue. This article reviews the psychology literature on the potential harms of loot boxes and applies the behavioural economics literature in order to identify the potentially abusive nature and harmful effects of loot boxes, which justify their regulation. This article calls on the industry to publish loot box spending data and cooperate with independent empirical research to avoid overregulation. By examining existing regulation, this article identifies the flaws of the ‘regulate-loot-boxes-as-gambling’ approach and critiques the alternative consumer protection approach of adopting ethical game design, such as disclosing the probabilities of obtaining randomized rewards and setting maximum spending limits. This article recommends a combined legal and self-regulatory approach: the law should set out a minimum acceptable standard of consumer protection and industry self-regulation should strive to achieve an even higher standard.


2019 ◽  
Author(s):  
Leon Y. Xiao

Loot boxes represent a popular and prevalent contemporary monetisation innovation in video games that offers the purchasing player-consumer, who always pays a set amount of money for each attempt, the opportunity to obtain randomised virtual rewards of uncertain in-game and real-world value. Loot boxes have been and continue to be scrutinised by regulators and policymakers because their randomised nature is akin to gambling. The regulation of loot boxes is a current and challenging international public policy and consumer protection issue. This paper reviews the psychology literature on the potential harms of loot boxes and applies the behavioural economics literature in order to identify the potentially abusive nature and harmful effects of loot boxes, which justify their regulation. This paper calls on the industry to publish loot box spending data and cooperate with independent empirical research to avoid overregulation. By examining existing regulation, this paper identifies the flaws of the ‘regulate loot boxes as gambling’ approach and critiques the alternative consumer protection approach of adopting ethical game design, such as disclosing the probabilities of obtaining randomised rewards and setting maximum spending limits. This paper recommends a combined legal and self-regulatory approach: the law should set out minimal acceptable standards of consumer protection and industry self-regulation should thrive to achieve an even higher standard.


2019 ◽  
Author(s):  
David Zendle

Loot boxes are items in video games that may be paid for with real-world money, but which contain randomised contents. There is a reliable correlation between loot box spending and problem gambling severity: The more money gamers spend on loot boxes, the more severe their problem gambling tends to be. However, it is unclear whether this link represents a case in which loot box spending causes problem gambling; a case in which the gambling-like nature of loot boxes cause problem gamblers to spend more money; or whether it simply represents a case in which there is a general dysregulation in in-game spending amongst problem gamblers, nonspecific to loot boxes.The multiplayer video game Heroes of the Storm recently removed loot boxes. In order to better understand links between loot boxes and problem gambling, we conducted an analysis of players of Heroes of the Storm (n=112) both before and after the removal of loot boxes.There were a complex pattern of results. In general, when loot boxes were removed from Heroes of the Storm, problem gamblers appeared to spend significantly less money in-game in contrast to other groups. These results suggest that the presence of loot boxes in a game may lead to problem gamblers spending more money in-game. It therefore seems possible that links between loot box spending and problem gambling are not due to a general dysregulation in in-game spending amongst problem gamblers, but rather are to do with specific features of loot boxes themselves.


2016 ◽  
Vol 3 (11) ◽  
pp. 160310 ◽  
Author(s):  
Joseph Hilgard ◽  
Christopher R. Engelhardt ◽  
Bruce D. Bartholow

Although much attention has been paid to the question of whether violent video games increase aggressive behaviour, little attention has been paid to how such games might encourage antecedents of gun violence. In this study, we examined how product placement, the attractive in-game presentation of certain real-world firearm brands, might encourage gun ownership, a necessary antecedent of gun violence. We sought to study how the virtual portrayal of a real-world firearm (the Bushmaster AR-15) could influence players' attitudes towards the AR-15 specifically and gun ownership in general. College undergraduates ( N  = 176) played one of four modified video games in a 2 (gun: AR-15 or science-fiction control) × 2 (gun power: strong or weak) between-subjects design. Despite collecting many outcomes and examining many potential covariates and moderators, experimental assignment did little to influence outcomes of product evaluations or purchasing intentions with regard to the AR-15. Attitudes towards public policy and estimation of gun safety were also not influenced by experimental condition, although these might have been better tested by comparison against a no-violence control condition. By contrast, gender and political party had dramatic associations with all outcomes. We conclude that, if product placement shapes attitudes towards firearms, such effects will need to be studied with stronger manipulations or more sensitive measures.


Author(s):  
Pedro Cardoso-Leite ◽  
Morteza Ansarinia ◽  
Emmanuel Schmück ◽  
Daphne Bavelier

This chapter reviews the behavioral and neuroimaging scientific literature on the cognitive consequences of playing various genres of video games. The available research highlights that not all video games have similar cognitive impact; action video games as defined by first- and third-person shooter games have been associated with greater cognitive enhancement, especially when it comes to top-down attention, than puzzle or life-simulation games. This state of affairs suggests specific game mechanics need to be embodied in a video game for it to enhance cognition. These hypothesized game mechanics are reviewed; yet, the authors note that the advent of more complex, hybrid, video games poses new research challenges and call for a more systematic assessment of how specific video game mechanics relate to cognitive enhancement.


2021 ◽  
Vol 2 (3) ◽  
pp. 34-55
Author(s):  
Ailbhe Warde-Brown

The relationship between music, sound, space, and time plays a crucial role in attempts to define the concept of “immersion” in video games. Isabella van Elferen’s ALI (affect-literacy-interaction) model for video game musical immersion offers one of the most integrated approaches to reading connections between sonic cues and the “magic circle” of gameplay. There are challenges, however, in systematically applying this primarily event-focused model to particular aspects of the “open-world” genre. Most notable is the dampening of narrative and ludic restrictions afforded by more intricately layered textual elements, alongside open-ended in-game environments that allow for instances of more nonlinear, exploratory gameplay. This article addresses these challenges through synthesizing the ALI model with more spatially focused elements of Gordon Calleja’s player involvement model, exploring sonic immersion in greater depth via the notion of spatiotemporal involvement. This presents a theoretical framework that broadens analysis beyond a simple focus on the immediate narrative or ludic sequence. Ubisoft’s open-world action-adventure franchise Assassin’s Creed is a particularly useful case study for the application of this concept. This is primarily because of its characteristic focus on blending elements of the historical game and the open-world game through its use of real-world history and geography. Together, the series’s various diegetic and nondiegetic sonic elements invite variable degrees of participation in “historical experiences of virtual space.” The outcome of this research intends to put such intermingled expressions of space, place, and time at the forefront of a ludomusicological approach to immersion in the open-world genre.


2021 ◽  
Author(s):  
Frank Gonzalez ◽  
Alexandra McCoy

A popular contemporary meme involves the social acceptability of “punching Nazis.” This phenomenon raises the question: what characteristics make a group or member of a group more or less “punch-able”? More broadly, what group attributes yield support for physical violence against them? In this study, we build on the extant psychology literature on intergroup processes to look at what leads individuals to find physical violence against a group acceptable, and if the factors that lead to such acceptance differ from those that lead to sheer affective intolerance. We use two experimental tasks to test expectations built on prominent theories. In a “real-world rating task,” participants evaluated a series of real-world groups and individuals with varying characteristics such as race, ideology, intelligence, warmth, and tendency toward violence. Also, in a conjoint experiment, participants chose between two groups in terms of which they would support being punched, as various attributes were manipulated such as race, expressed ideological values, partisanship, income, tendency toward violence, and being described as disgusting or threatening. We find consistent support for effects of political alignment (particularly, expressed ideological values related to dominance) and perceived tendency toward violence, as well as mixed findings for race and several other factors. These findings synthesize theories on intergroup conflict with contemporary findings on affective polarization.


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