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Loot Boxes and Microtransactions: Do They Pave the Way for Gambling Disorders?

Today, more and more video games across all platforms — PC, console, and mobile — adopt the “free-to-play” model. However, many gamers know that such games can become a huge drain on one’s wallet. How can that be? The answer lies in monetization systems like loot boxes and microtransactions.

The key word here is “monetization” — these systems require real-life money. Because loot boxes and microtransactions include elements of chance and reward, many people consider them to be gambling. In fact, without proper awareness of how these systems interact with our brains’ reward response, people that engage with them may develop a gambling disorder, in the same way that they might develop an unhealthy relationship with casino gambling in Atlantic City. As a result, consumers and lawmakers alike are calling for legislation that regulates these practices under gambling law.

Why do developers include loot boxes in their games?

Loot boxes, microtransactions, and other monetization systems introduce ways for players to receive or unlock special items or advantages in games. So far, implementing loot boxes and microtransactions in video games has proven massively profitable for the video game industry. In 2016 alone, over $19 billion of the industry’s revenue can be attributed to such transactions in otherwise free-to-play PC games. In contrast, video games earned $8 billion from sales of traditional PC and console games.

Why are loot boxes and microtransactions so effective?

Developers design these systems to evoke a strong psychological response from players in an attempt to exploit their neurological reward system. Opening a loot box typically involves fanfare or explosions of colors — deliberate choices intended to make opening them feel exciting and satisfying. By combining these design elements with the actual reward that players receive, developers have created a potent way to activate players’ reward systems. Over time, gamers can grow dependent on the rush of dopamine — the “feel-good” brain chemical — that this process elicits. Before long, they might sink hundreds or even thousands of dollars into a game.

What can we do about it?

So far, a select few countries — China, Japan, Australia, and the Isle of Man — regulate loot boxes and microtransactions under gambling law. The United States does not currently consider these practices to constitute gambling. However, the Entertainment Software Ratings Board has announced that they will require video game companies to disclose if their games incorporate in-game transactions on their packaging and online descriptions. In the meantime, gamers and parents of gamers should exercise caution.

If you or a loved one need help with gambling in any form, like problematic sports betting in East Rutherford, NJ, call our confidential, 24/7 hotline, 1-800-GAMBLER. It is never too late to seek support and treatment.