Lootbox (2024)

FAQs

How are lootboxes legal? ›

Are Loot Boxes Legal? Today, with a few exceptions, most forms of loot boxes remain legal and unregulated worldwide. However, proponents of loot box regulation argue that the chance and rarity mechanics make loot boxes akin to gambling and constitute predatory practices toward minors.

Several potential harms have been associated with loot boxes, such as potential mental health and financial issues and their close resemblance to gambling. Due to these issues, some countries have started regulating loot boxes, with some countries outright banning certain types of loot boxes.

The judge ruled that EA's loot boxes do not constitute illegal gambling, but they may fall under “deceptive practices”. What are loot boxes, exactly? They are mystery bundles of virtual items found in many video game environments. They can be won by a gamer as a reward and/or can be purchased with real money.

Loot boxes generate $15 billion a year revenue for gaming companies. But 90 percent of that money comes from a small group of particularly in-game-spending-obsessed customers, known in industry parlance as “whales,” who make up just a small percentage of players.

Loot Box Restrictions

Chinese law is particularly strict and detailed on loot boxes, as they are seen as a form of gambling: Loot boxes cannot be purchased using either real or virtual currency. Loot box contents must also be acquirable through other means.

Loot Boxes are Designed to be Addictive

In this regard, they are similar to slot machines and other gambling products because players risk money for a chance of getting a reward. Loot boxes affect your brain similar to how slot machines do (Whyte, 2019): Prizes are distributed randomly.

Loot Box sales ended on August 30, 2022. Loot Boxes will all be automatically opened with the launch of Overwatch 2 at which point all remaining unopened Loot Boxes will be automatically opened upon entering the Hero Gallery.

The Ethical Dilemma

The randomness of these rewards has led to comparisons with gambling, raising concerns about their availability to young or vulnerable players. Targeting Vulnerable Players: Critics argue that these systems often exploit players, encouraging them to spend more than they might otherwise.

Because of their use of random chance to gain items after committing real-world funds, games using loot boxes may be considered a form of gambling.

Players spend real currency or in-game currency to receive one of these random items, which can make the player more powerful, competitive, or appealing. The concept became mainstream in 2010 when introduced into popular games like Team Fortress 2, and then Overwatch and Call of Duty:WW2.

What is the issue with Lootboxes? ›

The source of controversy here is that buying a loot box means paying for a randomized reward of variable value. This in turn results in loot boxes being likened to gambling, and to related claims, such as that loot boxes are addictive and, in a sense, similar to slot machines.

Loot boxes were first introduced in the Korean game MapleStory in 2003. In 2008, Electronic Arts (EA) was the first major game developer to implement loot boxes with the introduction of a new online-only game mode in FIFA 09 [6], called FIFA Ultimate Team (FUT).

Currently, courts in various jurisdictions have interpreted loot boxes differently, and as such, these virtual items will continue to be a legal gray area unless and until such loot boxes are regulated at the state or federal level.

Previous studies have suggested that 78% of gamers have bought loot boxes. As loot boxes are similar to gambling, it might be helpful to understand the characteristics of people who buy loot boxes.

According to a study conducted by the Royal Society, “loot boxes either cause problem gambling among older adolescents, allow game companies to profit from adolescents with gambling problems for massive monetary rewards, or both of the above.” According to the Mayo Clinic, gambling during childhood or the teenage years ...

The low probability of obtaining a desired item means that the player will have to purchase an indeterminate number of loot boxes to obtain the item. Loot boxes resemble gambling slot machines because they require no player skill and have a randomly determined outcome (i.e., prize).

When convicted of running an illegal gambling business, you could face much steeper penalties under federal law than California state law. Violations of California PC 330 are misdemeanor crimes resulting in up to 6 months in jail and $1000 in fines.

1629 - A bill to regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment products, and for other purposes. 116th Congress (2019-2020)