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Loot boxes and Gambling: The Hyperbole Has Gone Too Far

I don't like loot boxes or the drama surrounding them any more than the next person, but I think people are going a little too far.

There's now a UK petition to consider loot boxes and the like as gambling, and I see people in the U.S. trying to get similar ideas pushed out there.

People have begun to confuse gambling with risk.

Take booster packs for collecting card games.

You're buying cards for Magic the Gathering, Pokemon, Yu-Gi-Oh, or even Hearthstone in order to build up that perfect deck. You pay $4.99 for a pack, and there's no guarantee what you'll get. Some companies say there's a 20% chance of a rare, some just say "there's no guarantee."

Are card packs gambling? 

No. It's not gambling because you are still guaranteed to get something. You're guaranteed the minimum offering of basic cards. You were told you would get X basic items and a chance for one to upgrade to a nicer item. Sure, they may not be what you want, but you still got something in return -- what you were promised. It's up to you to accept that what you get in return, at its basic level, should be worth the price of the pack.

The same applies to loot boxes. You buy one for any amount of value, whether with real money or in-game currency, and what you get is a risk that involves chance. However, even with the worst draws, you're guaranteed something in return. There is a predetermined and agreed upon exchange of value for value.

The ESRB recently told Kotaku:

While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want). We think of it as a similar principle to collectible card games: Sometimes you’ll open a pack and get a brand new holographic card you’ve had your eye on for a while. But other times you’ll end up with a pack of cards you already have.

I get the argument. It's random luck -- that's where people mistakenly accuse this of being a gambling. You put in $4.99, and what you get out may be crap or it may be awesome. You may get the best card in the game, or your 20th basic card. It sucks. It influences the game's design, and not in a good way.

But gambling it is not.

  • Azuriel says:

    So casinos could bypass all gambling regulations by simply awarding a minimum of $0.01 when you lose $X at Poker? Or how about simply giving everyone a business card when they lose? It’s not Poker chips, but it’s something!

    Seriously though, gambling is generally illegal in Japan, but Panchinko parlors exist out in the open through flimsy loopholes like this one. You only win little steel balls… that you trade for prizes and turn into cash at the little booths outside. TOTALLY DIFFERENT.

    Look, we all know its gambling. You know it, I know it, the devs know it. The whole reason it works as a revenue stream is because it’s gambling. It activates the exact same addictive neural pathways as the “real thing.” And nobody puts a loot box into their game if a straight cash shop pulled more money. And unlike paper card games like Pokemon or Magic, what you “get” is… nothing. If it’s not the thing you were aiming for, it’s useless pixels you can’t even give away. Unless, of course, you can sell the account to someone else, but that’s banned by pretty much everyone.

    I’m honestly baffled each and every time someone defends this monetary scheme. I mean, semantics aside, do you believe loot boxes add value to games, or gamers in general? Is this the sort of revenue stream you want to see everywhere? Because it’s just getting started.

    • Phil says:

      It’s almost like games have been $60 for the past almost 2 decades and companies that spend huge budgets on blockbuster games need to make up the cost somehow :thinking:

      Also I see a lot of people argue about the whole “science behind gambling” and everything like that, and I know people love to act like they are more informed than everyone else, but have any actual studies been done on this in terms of games?

    • Drathmar says:

      So, I am going to disagree here. I don’t see how loot boxes are any more gambling than, as mentioned in the article, buying card packs for MTG/Yugioh/Pokemon are. Or are you saying that all collectible and trading card games needs to follow the same rules as gambling as well? I mean some of the cards you can get from the pack you can sell for ludicrous amounts of real money.

      If you do believe that, why are you just now being against it with Loot Boxes, and why weren’t you against it when MTG first became big. Or since your worry is that it targets children, why didn’t you protest against yugioh and pokemon, which are more targeted at children than many of the games with loot boxes.

      Do I like loot boxes? No. And I don’t buy them. However, I think it’s highly hypocritical and a bit ludicrous to start trying to regulate them like gambling when they are no different than card packs for a TCG, something that has been around for over 20 years now.

      Is it only being brought up now because it’s in a medium that reaches a wider audience?

      • Azuriel says:

        @Drathmar

        I am somewhat sympathetic to the paper Magic/CCG argument, as you end up with a tangible product that can be sold, traded, or given away. Hearthstone is worse since it’s all digital and cannot be given away, but you can disenchant the unneeded cards and eventually craft what you want. Plus, with CCGs, the entire point of the game is intrinsically linked with collecting the cards themselves. It’s still gambling, but that’s part of the core conceit.

        Compare that with the lootboxes from, say, Star Wars Battlefront 2. Or Guild Wars 2. Or any other non-CCG that contains lootboxes. Those are there as a bottomless revenue stream, preying on whales and the easily-addicted.

      • Drathmar says:

        I am not saying they aren’t targeted at those. I think preying might be a bit of an exaggeration though.

        I also don’t see why this should classify it as gambling. That is where my argument is. Not that this is an acceptable practice, or that loot boxes are great. I honestly hate them. I just think it’s ridiculous to classify them as gambling. You are still paying money for the promise of something, whatever it is. Just because what you are getting is random, it’s not gambling.

        Also, I don’t see why they should be punished and said to be targeting the easily addicted any more than gambling is. It’s on the person (or their parent’s if a child) to regulate themselves, not the games. If parent’s aren’t educating themselves on what is in the game or what they are buying for their child, that is on them, not the game company.

    • Wilhelm Arcturus says:

      No, lock boxes, though I find them odious, do not meet the essential elements that define gambling. If they did, then Magic The Gathering and other CCGs that sell you cards unseen in foil packs would be gambling as well. That the goods are virtual doesn’t enter into it. You already displayed a willingness to buy something virtual. You think it has value, and so it does.

      And no, your poker example would not work. You would have to get your whole bet back to meet the letter of the law, at least in my state. (Though draw and stud poker are legal here as they are considered games of skill.)

      That said, lock boxes do feed on the same base need/desire that drives people to compulsive gambling and any company boosting the bottom line by feeding such compulsions should be called out for it.

  • Proximo says:

    I completely side with Azuriel on this one, well put sir!
    Loot boxes also become very much gambling when there’s a indirect way to sell any rare loot you get from them for real money, like with the CS weapon skins.

  • Caldazar says:

    I completely agree with Azuriel as well here. Also, just googling the definition of gambling ( dictionary.com/merriam webster), nothing says gambling has to be win all or nothing.

    Also when browsing the legal definition in the US (https://www.law.cornell.edu/uscode/text/31/5362) it also does not mention the all or nothing definition.

    • Wilhelm Arcturus says:

      In my state… and gambling is generally regulated at the state level in the US… one of the three essential elements that define gambling is “some will win, some will lose.” In the case of lock boxes, everybody wins because they get something value in the game. That it is not the item you wanted or an item you already have a dozen of doesn’t enter into it, same as with MTG or Pokemon cards.

  • FreeQuest says:

    The worst thing it is it trains young, malleable minds that gambling is ok and yes it is gambling you spend real money on a random roll of the dice, but you only get something that lasts as long as they keep the servers up then it’s useless.

    Yep, its gambling and It should follow the same rule worse still its aimed at children that have naturally addictive personality.

    Personally, I prefer the way its done in the world of warships you get loot boxes for playing the game and accumulating exp you cant buy them.

  • Keen says:

    I think what most people are conveniently ignoring is that with loot boxes and card booster packs you are trading one form of base value for another form of base value.

    I put in $5, I get back a guaranteed set of cards that I must be willing to accept as worth $5, otherwise the exchange would never have happened.

    There is a chance that something nice could come in addition to those (random) base cards, but that is a chance for an UPGRADE.

    Loot boxes behave the same way.

    I put in $5, I know that I am GUARANTEED to get back a SET of digital goods. I have a random chance for one of those items to UGPRADE to something nicer.

    There’s no chance I get nothing. There’s no chance I get 1 card instead of 15. I’m getting 15 cards.

    Just because you got 15 cards you didn’t want doesn’t make the act of selling you 15 random cards predatory.

    Using the word “gambling” here shouldn’t be an argument in semantics. People are taking it beyond semantics to the level of filing petitions for loot boxes to become a regulated industry. That’s beyond the semantics of the word where we can say, “oh it’s a gamble to see what you get!” No, people are literally saying this is akin to a Vegas slot machine when it’s absolutely not.

    If you regulate loot boxes then you absolutely must regulate pokemon trading cards (which target children WAY more than loot boxes on Battlefront 2… give me a break) and you regulate every other industry like it. That’s a slippery slope that simply isn’t worth it just because you don’t like loot boxes.

    • Azuriel says:

      I put in $5, I get back a guaranteed set of cards that I must be willing to accept as worth $5, otherwise the exchange would never have happened.

      A rational economic actor would never have purchased the loot box or pack of Magic cards in the first place, because the expected value is ALWAYS less than its cost. Otherwise, none of us would be working, because we could just open packs all day and make bank. So, we are already in a reality in which we receive less value (on average) than what we put in – a few people open that $200 foil Mythic Rare, and everyone else opens up junk pack filler that’s hard to even give away.

      If you regulate loot boxes then you absolutely must regulate pokemon trading cards (which target children WAY more than loot boxes on Battlefront 2… give me a break) and you regulate every other industry like it. That’s a slippery slope that simply isn’t worth it just because you don’t like loot boxes.

      I am 100% fine with that regulation outcome. China, of all places, already has some common sense regulations in place regarding loot boxes, e.g. printing the exact odds of specific outcomes. Why is that information hidden in the first place? The same reason why restaurants resisted putting calorie counts on their menus: to obfuscate the exact costs of their products.

      And, to be clear, not only do I not see there being any slippery slopes when it comes to loot boxes, I don’t particularly care even if there are. If you have to show ID to purchase Magic cards, that’s fine. If SWBF2 has an Adult Only rating on it because loot boxes, then fantastic. The game industry will move on to the next “novel” monetization scheme, and we can bury loot boxes in the garbage bin of bad game design.

      • coppertopper says:

        Yes because warning labels on cigarettes has really helped curb that addiction cycle ::eye-roll:: And who goes to McDonald’s to buy a calorie conscious meal? Jebus Azuriel if have to live in a society where the government needs to tell you salads are better for you then bigmacs then please move to China. Eventually the free market will sort out the loot box bs that is going on. Just like day 1 dlc caused furor this will go too far (as it has now) and devs will make bank buy advertising their next game being loot box free. And the cycle continues….

      • Azuriel says:

        I don’t have any sexy percentages, but this WHO report suggests that warning labels do, in fact, have an impact. And as far as calories go, every little bit helps – the adult obesity rate just passed 40% in the US. McDonalds is whatever, but when I went on a beach vacation several months ago, I absolutely passed on a chocolate peanut butter milkshake when I saw it had a ludicrous 1,000 calories. I know milkshakes aren’t exactly healthy, but really? A thousand? That was almost as much as my burger and fries combined. Nevermind the 76g of sugar…

        In any case, the government doesn’t really even need to get involved. Yeah, maybe they have to when it comes to loot box percentages. But the ESRB is not government, and slapping AO on games with loot boxes will fix the problem by itself. And calling a spade a spade.

      • Mesar says:

        In Australia, when those calorie display rules came into place, one of the key reasons cited was because the McDonald’s salads had more calories in them than many of the burgers. The dressing was loaded with sugar and fat, but was being marketed as a “healthy choice”.

        Companies have an incentive to obfuscate the details of their products when it leads to increased sales.

  • Bhagpuss says:

    There seems to be some confusion between the noun “gambling” and the verb participle “gambling” here. Yes, when you buy a lootbox, hoping to get a specific item, knowing there is only a small chance that the box will contain that item, you are “gambling”. That does not make the activity you are doing “gambling”.

    Gambling, in the context relevant to Keen’s OP is, as Wilhelm points out above, a locally, regionally or nationally defined legal construct. In some jurisdictions the transaction that takes place between the lootbox buyer and seller may well qualify as “gambling”. In others (I would imagine in most) it definitely won’t.

    In verb terms, we’ve been gambling in MMOs since at least EverQuest. Every time you killed Quillmane, hoping he’d drop the cloak, you were taking a gamble. But we didn’t call that “gambling” or suggest it should be regulated under state law. Indeed, the entire MMO genre is based on gambling and lockboxes are nothing much more than a particularly exploitative version of the exact same process. Instead of killing a Boss you buy a box. Then you click it, hoping the thing you want is inside.

    Lockboxes contain precisely the value you pay for them: if you buy $5 worth of lockboxes you have, de facto, agreed that there’s $5 value in them – you just proved that by paying $5, after all. That you can’t resell the contents for $5 is immaterial. You can’t resell many things for what you paid for them. Neither does the fact that you may be able to re-sell the contents for more than $5 make the lootbox worth more than $5. It costs $5. You paid $5. It’s worth $5. QED.

    On a point of order, Azuriel, you can re-sell quite a lot of the items in GW2’s lockboxes. It’s one of the primary features of the system. So in that respect they are very much like MTG cards.

  • nukethesitefromorbit says:

    Loot boxes are really no different than those little mini vinyl figure mystery boxes. I love Fallout and would love to have those for my office but I personally will not spend my money on a mystery box that may or may not contain a figure I already have. To me that is a ‘gamble’ or ‘roll of the dice’ but I do see the difference between that and putting a quarter in a slot machine.

    I still however think there should be more transparency in the loot box business model, especially because it is digital and the math behind the boxes can be tweaked whenever the developers choose. I feel that a good compromise would be drop rates being published and revised anytime the math is altered. If you want to sell a loot box and entice people to buy them because of item X than you should also be transparent on what the actual chance of X dropping is. Without knowing those numbers it really is just a guess as to what the chances of ‘winning’ that item are and you really just have to trust they are giving you a fair chance. For all you know you might be paying for a loot box for a chance to win item X and it only has a 7% chance of dropping. Hardly a smart bet, or gamble if you like, in my mind 🙂

    • Coppertopper says:

      Thats an interesting point because with poker at least, percentages of a hand winning are usually tallied as the game is being played based on the number of cards remaining. Slot machines on the other hand are just blind luck. Yet they both are considered gambling. The legal issue is still blurry because for the most part the items are virtual (apparently steam wallet isn’t reality : p). How you buy or trade these items illegally is up to you but the normal route is in game only, so that seems to be the legal loophole right now.

  • SynCaine says:

    Along with everything else said here, I’ll also add that people go to gamble for the exact action of gambling. That’s the fun, with winning being a side bonus you don’t actually expect (long-term poker players aside, I’m talking slots and table games here where you walk in knowing the house is favored to win).

    No one buys loot boxes for the pure act of opening a loot box. They do it because they want to exchange currency for what is inside to aid/supplement the game they are playing, whatever that might be. There is some fun (for some people) in the unknown of what you might get, which could be a reason lot boxes are favored over a straight item shop with prices, but that isn’t the primary driver for people buying them.

    Also if you remove the (legal) ability to convert the items back into real world cash, you close a major ‘is it gambling’ loophole as well, which most games have already done.

  • Gankatron says:

    I consider it a form of gambling, an odious practice the devs specifically put into the game to foster addictive “fun pain” based money spending, as such loot box mechanics could exist without the real money transactions attached to them.

    Nonetheless, one has to consider how much regulation they want in their community, and so the question also becomes a philosophical/political one

    I see them like randomly distributed in game scratch off ticket vendors, basically a self-imposed impulsive gamer tax fueled by sunk cost psychology monetization.

    I feel the devs are purposefully targeting people with addictive tendencies, and whether one sympathizes with such vulnerable gamers or alternatively adopts a “just desserts” individual self-control philosophy prevents a simple yes/no answer to this problem.

    So one could also ask whether they support abolishment of state lotteries? Is there an absolutely correct answer, I don’t think so, but I bet people of similar political belief systems would tend to find themselves in agreement over questions such as these.

    • Gankatron says:

      …and just to clarify, I find the monetization of loot boxes “odious”, as opposed to inclusion of loot boxes in and of themselves.

  • Isey says:

    Gambling is more honest. You know the odds going in,and it is illegal to tip the odds in the favor of the house (beyond the posted rates). There are transparent rules, at least.

    • Keen says:

      Would knowing the odds change any of this? It wouldn’t for me.

      If I knew I had a 5% chance to pull an epic item from a loot crate or a 50% chance… it’s still paying to win and it’s still technically a chance to get something good vs. something regular.

  • nam says:

    For a game to be considered Gambling in BC Canada, it must consist of at least 2 of the following 3 components: Consideration(buy in), game of chance and a prize. Sounds like loot boxes are all 3 and would need to be earned through objectives or even randomly given out and not sold.

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