Regulation and Gambling: A New Lootbox Battlefront Opens 

Written by Brian Quigley

The world of video games is an exciting one. It is closely linked to the bleeding edge of technology, with developers and companies always watching for the next big paradigm shift to latch on to so they can be ahead of the game. This has always been its nature. 

With emergent technologies comes an element of risk too. Laws and governing bodies struggle to deal with abstract concepts that simply didn’t exist as short as a decade ago. Often self-regulation from self-preservation will stave off too much outside control (like it did with the establishment of the Comic’s Code Authority and the Entertainment Software Review Board (ESRB) in response to moral panics over comics and Mortal Kombat, but sometimes there is just too much money to be made. In the past couple of years, the concept of “lootboxing” has been gaining the attention of mainstream media, and even the governing bodies something that the video game industry has been so keen to avoid, historically. 

Further regulation? 

15 European countries have issued a joint statement, effectively announcing they will be investigating games for features that constitute gambling. It is possible the last chance of self-control has passed for the games industry. No one seems sad about this in the wider population. While the focus of this investigation is secondary trading sites, “lootboxing” is also in its remit as something that should be regulated. 

How did we get to the point of governmental oversight of video games in such a direct way? Why is this a rare time when judicial interference in the production of games is being welcomed by gamers? What even constitutes a lootbox? 

A science to lootboxing 

Based on the work of American psychologist and behaviorist, BF Skinner, the kernel of the lootbox is that “operant conditioning” feels more rewarding than a consistent drip feed of standardised rewards. To put it in terms of a video game, it’s simply more fun and addictive to get a random reward with a chance of a good drop than an averaged increase every drop, even if the overall end increase is the same. Humans, by our nature, look for the next big thrill. 

BF Skinner

I asked Andrew Deegan for his opinion on the use of lootboxes and Skinner’s operant conditioning in gaming. He’s a lecturer on video game design in DIT, and a former Lead Game Designer for Ubisoft, and is currently working on immersive VR experiences. He is passionate about game design and understands it intimately. 

“Regarding Skinner boxes in game design, they often get a bad rap,” Deegan says. “At its core, a Skinner box is just a way of conditioning a person to do something. If you play World of Warcraft, are you not conditioned to kill monsters to get loot and level up? Sure, you are. But is that a bad thing? Ask the millions of World of Warcraft players.” 

This is visible in a variety of games, often applied in a way that is fun. Most RPGs live on a randomised loot progression in tangent with experience points. Destiny discussion often revolves around the loot tables and probabilities of drops.  

Drip feeding content 

Deegan explains how the Skinner boxes have always had an important part to play in the balance and fun factor of games, especially when drip feeding rewards.  

“This is super important in game design and heavily connected to good progression systems in games,” Deegan says. “If I was playing an RPG such as Zelda classic on SNES, and I got all the most powerful rewards, weapons and items at the start of the game, the whole game experience would be ruined. 

“All the challenges would be easy, and the player would not appreciate the power of each weapon or take the time to master each one before moving on to the next,” he adds. “In most good games with lots of content, it is important to drip feed content, so players feel rewarded and really appreciate the good things when they get it. If someone won a Ferrari for free or earned it be working hard and smart for 10 years, who do you think would appreciate it more?” 

Of course, in recent years, charged implementations of the operant conditioning technique have intermingled with the practice of DLC to form the lootbox. This monetises the Skinner box and often, this is what keeps the development team running – at a cost. Controversies such as Battlefront II’s promotional hammering (due in large part to it being a fully priced game that virtually demanded in-game purchases) have dogged the larger producers for some time. 

“As a free-to-play game designer, I find it an effective system to earn a profit for a game and keep players engaged, even if it is a bit hollow as an experience and less rewarding in the long term,” Deegan notes. “It is also, very cheap to produce! As a player, however, I see through them and do not enjoy or pay for them in games.”  

Despite his ambivalence towards the mechanic of a Skinner box, Deegan is clear he does not think the model is suitable as a kernel of a game’s mechanics: 

“I believe no game should be built around a transactional loot box. The lootbox part should be a side component or optional part which enhances, but is not core, to the game.” 

A carefully considered approach 

Regardless of their legitimacy in game design and in ensuring developers get paid, it’s quite plain that the lootbox is not a popular form of the Skinner box. The crux of the entire debate comes down to what international authorities define as gambling, and the randomised rewards of a paid for loot box would seem to push it into that category. Deegan thinks this is something that should be carefully considered. 

“For children, gambling style mechanics and lootboxes should be handled carefully as they do not fully understand how the systems work and can easily be conditioned with dangerous addictive behaviour patterns,” he adds. 

“My personal feeling is that gambling is betting of real money, and rewards which can be translated into real money is a dangerous thing and should not be allowed to people under 18.  

“However, in saying that, we need to be careful in how we define “gambling style mechanics”. If the player is spending real money with a chance to get a rare loot item in a box in Destiny, is this any different than selling premier league stickers or Pokémon card packs? Is that gambling? Under current law in some countries such as the UK, it is not”. 

While welcomed by the majority, perhaps as an industry and as fans, this investigation should be watched closely. A multi-tier system where mechanics must be reworked or redeveloped for different regions based on the individual laws passed in them would be both chaotic and introduce increased development costs. Especially if some regions definitions stepped beyond what others would see as gambling. There are 15 regions investigating – so this is a risk.  

Deegan also points out there is a potentially more beneficial way of dealing with the actual root issue of gambling awareness: 

“I also believe that there should be more education around the topic of gambling and loot box systems in schools, from parents and peers and maybe even the industry itself,” he says.  

“That way, we could reduce the number of people who are taken advantage of by intentionally manipulative gambling systems and games. The secondary effect of raising education is that fewer people will spend money on them, and the companies will be forced to develop products without them, or with less dependence on them.”  

On the other hand, if this has a cooling effect on charged games that feel gutted by loot boxes, this investigation has already been for the better. Ultimately producers want to make money, and players want enjoyable games. It’s intuitive to say if a game is free, you must accept the existence of mechanics built around charging: but if you’ve paid, they should be kept to a minimum. A reticence from producers to put loot box mechanics into their more expensive games can only be a positive for players.  

Regardless, the next few years will be a very interesting time as governments and regulators interact in a very real way with an industry that has been dodging them since the heady days of Mortal Kombat. 

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