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Loot boxes a matter of "life or death," says researcher

Academics discuss their studies and concerns surrounding game monetization at FTC workshop

In the opening panel of the Federal Trade Commission's workshop on loot boxes yesterday, representatives of the industry and consumer and watchdog groups gave the federal regulator a lay of the land on the issue, detailing what they are, how they work, and why some people have problems with them. There was a measured tone to the meeting that apparently didn't sit well with York St John University researcher Dr. David Zendle, who later led off the day's discussion from a panel of academics.

"There's one clear message that I want to get across today, and it stands in stark contrast to mostly everything you've heard so far," Zendle said. "The message is this: Spending money on loot boxes is linked to problem gambling. The more money people spend on loot boxes, the more severe their problem gambling is. This isn't just my research. This is an effect that has been replicated numerous times across the world by multiple independent labs. This is something the games industry does not engage with."

"This is so important. It's not something we should trivialize or laugh at or compare to baseball cards. This is life or death"

Dr. David Zendle

Zendle said that problem gambling is "an excessive disordered engagement" beyond the person's control and has been linked to depression and anxiety, can cause financial distress, destruction of families, and even leads to people taking their own lives.

"This is so important. It's not something we should trivialize or laugh at or compare to baseball cards. This is life or death."

While Zendle said his research and others has shown a link between problem gambling and loot boxes, he conceded that it's unclear what sort of causal relationship might exist. It could be that players who get deeply into loot boxes are then more likely to develop problems with real-world gambling, or that people who already have problems with real-world gambling are disproportionately drawn to loot boxes.

"We don't know which of these are true and which of these are right, but in either case, it's a clear cause for concern and not something to be trivialized," Zendle said. "In one case, you have a mechanism in games that many children play that is literally causing a state of affairs that is enormously destructive. And if loot boxes do cause problem gambling, we're looking at an epidemic of problem gambling the scale of which the world has never seen.

"And if that's not true -- and I'm totally open to that not being true -- then you've got a system in which game companies are differentially profiting from the most vulnerable of their consumers. Problem gamblers already have enormous issues in their lives. They don't need to have their money taken away from them through this as well."

Following Zendle on the panel was Dr. Andrey Simonov, assistant professor of Marketing at Columbia Business School. Simonov described his research, which is exploring whether players who engage with loot boxes are doing so for practical, legitimate reasons, or because they're hooked on the gambling aspect of it.

He and his collaborators believed they could start to examine that question by looking at when players turn to loot boxes. They reasoned that if players are opening loot boxes when they seem to be stuck in a game and need a boost to get over a difficult stretch, then that might suggest there's a rational thought process behind it, whereas if they were opening them repeatedly when they seemed to have no need for a boost, that might suggest there were gambling tendencies at play.

They worked with the publisher of a Japanese mobile puzzle game where the loot box items were primarily functional and centered on in-game progress, and looked at what players' success rates were on levels leading up to their use of loot boxes. Like many mobile games, there were score thresholds players had to meet to pass a level with a one-star rating, and higher thresholds to earn a two- or three-star rating.

Simonov showed a graph contrasting players' scores on levels just before they opened loot boxes. As the numbers approached the one-star point threshold, there was an uptick in the number of loot boxes opened, while there was a general downward trend in boxes opened as players passed higher thresholds.

"So what this shows, and it's consistent with all descriptive evidence, is there's definitely some functional value in how people open loot boxes," Simonov said, adding the caveat that this doesn't mean people only open loot boxes for functional value.

The next researcher up was Dr. Adam Elmachtoub, assistant professor of industrial engineering and operations research at Columbia University. Elmachtoub's research came at the issue from a different angle, creating a model to determine what sort of loot box would make the most money.

At the heart of the model is the idea that every individual consumer values every item differently, and they will keep buying loot boxes until the total value of the items they get in a box no longer exceeds the price they paid for the box. Together with collaborators at Columbia as well as the University of Toronto and the University of Pittsburgh, Elmachtoub ran a number of scenarios and came up with some counterintuitive findings as to which formats would generate the most money for publishers.

"Since there's a benefit for lying [about loot box odds], there must be regulation around this"

Dr. Adam Elmachtoub

For example, they determined that the "traditional" loot box approach where players can earn duplicate items rather than a "unique" loot box approach where they are guaranteed that every item will be new to them actually works in the players' favor. While players bought roughly the same number of loot boxes in traditional or unique models, publishers were able to charge higher prices for unique loot boxes under the model because players were guaranteed new items. So even with duplicates (which the researchers regarded as worthless), players in traditional loot box schemes had a larger gap between what they perceived the items to be worth and what they paid overall.

They also looked at allocation probabilities to find out what the optimal strategy was for publishers, and under their model, the most profitable strategy was the most straightforward: dole out everything uniformly at random. If there are 1,000 items in the game, the best results came from giving each one a one-in-a-thousand allocation.

However, there was one very important caveat.

"It turns out if the seller publishes some list of probabilities and lies about them, the seller can make significantly more money," Elmachtoub said. "There is a benefit for lying. Since there's a benefit for lying, there must be regulation around this."

Elmachtoub said games need to be monitored to ensure publishers are actually following the probabilities they post, and it needs to be tracked not just in aggregate but on the individual consumer level because it's otherwise possible to gain more money by extorting specific individuals.

In a post-panel Q&A session, Elmachtoub talked about the difficulty of ensuring publishers are accurately reporting their probabilities while they are also employing dynamic odds, something the ESA defended in an earlier panel.

"I think that would be a nightmare to regulate," Elmachtoub said. "As the odds are changing, you could never with just a couple of samples see if you're truly adhering to such odds. So that's something I think would be something to worry about in terms of making sure people are sticking to these odds, even if they are dynamic.

"Another unique thing about loot boxes versus baseball cards is that companies can see your inventory. That's a fundamental difference. Being able to take advantage of that would obviously be beneficial to the seller and allow them to exploit more. But also it would be bad for consumers because it would be very, very difficult for them to understand their optimal purchasing strategies in the long run of the game. It would be very hard to anticipate how much money they would need to succeed in the game if everything's updating dynamically."

"I'm trying to shift this conversation away from, 'Just tell me how many hours are allowed' to, 'What are some symptoms... that would indicate there's a problem?'"

Dr. Sarah Domoff

The final academic on the panel was Dr. Sarah Domoff, assistant professor of clinical psychology at Central Michigan University. Domoff spoke about gaming trends among children and parents she's seen both clinically and in her research. One obvious trend recently has been Fortnite, with Domoff saying Epic's battle royale shooter has been played by 45% of children and 61% of teens.

Domoff said it's important when talking about children and games that the discussion doesn't get boiled down simply to screen time. It's also important to consider the context in which they enjoy games; For example, she said a quarter of teens endorsed playing Fortnite during class. And despite the prevalence of Fortnite in kids' gaming habits lately, Domoff said about 75% of parents and children have never played the game together, even if they play it separately.

According to Domoff's research around games and other screen media, there's very limited interaction between parents and their children on mobile devices in particular.

"We heard earlier today that parents have a lot of power to control some of these concerns related to games, but right now things are getting in the way and there are barriers to parents and children interacting around games. This is really problematic because recent research supports setting limits around gaming, and that parent-child communication about gaming could be really important for older children and adolescents."

Domoff also addressed concerns that have been raised from teachers and clinicians she has worked with at Central Michigan University.

"One thing we hear time and again is that gaming is embedded in social interactions among children. Sometimes this can be really good; you connect with your friends and peers on games. Other times, it can be conflictual."

She then turned to definitions of problematic gaming, both her own and the World Health Organization's, and emphasized that the symptoms to look out for aren't just someone playing games a lot or being really enthusiastic about gaming. Instead, it's more about the context of how they engage with games, and the actual symptoms to worry about are when gaming begins to interfere with the child's functioning, when they aren't getting enough sleep, lose interest in other activities, are unable to cut back on playing, and continue or even escalate their gaming despite it having such negative consequences.

Domoff emphasized, "I'm trying to shift this conversation away from, 'Just tell me how many hours are allowed' to, 'What are some symptoms or engagement with different types of screen media that would indicate there's a problem that should be addressed?"

While she didn't endorse any specific avenue of loot box regulation, Domoff emphasized in the post-panel Q&A session just how difficult it is for parents to navigate the details of the vast variety of games their kids could be playing.

"Regardless of whether regulations are coming forth, we definitely need better documentation about what parents should consider, whether from within the industry or from consumer groups such as Common Sense Media, because it's just really complicated and there are so many games for parents to keep up with," she said. "It's such a challenge."

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Latest comments (17)

Ian Griffiths Product Owner, Hutch4 months ago
How can one reasonably claim:
This is life or death.
And then follow with :
And if loot boxes do cause problem gambling, we're looking at an epidemic of problem gambling the scale of which the world has never seen.

"And if that's not true -- and I'm totally open to that not being true -- then you've got a system in which game companies are differentially profiting from the most vulnerable of their consumers
If you don't know that it's an issue how can you claim it's a 'life and death' one!? Given the popularity of loot boxes, where are the corresponding bodies of its victims? Can anyone point to a single case of even a bankruptcy related to loot boxes, let alone actual physical harm?

It's worth noting that the following evidence from Simonov points towards functional utility being a driving factor in many loot box purchases:
"So what this shows, and it's consistent with all descriptive evidence, is there's definitely some functional value in how people open loot boxes," Simonov said, adding the caveat that this doesn't mean people only open loot boxes for functional value.
I have to say that I think some of this is getting a bit silly. What we need is evidence and reason, not conjecture, speculation that could invoke unwarranted panic.
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Ian Griffiths Product Owner, Hutch4 months ago
The modelling from Elmachtoub's group is certainly interesting. His caveat is an interesting one:
"It turns out if the seller publishes some list of probabilities and lies about them, the seller can make significantly more money," Elmachtoub said. "There is a benefit for lying. Since there's a benefit for lying, there must be regulation around this."
I'm pretty sure that there already is regulation around this. Giving a consumer a description of what you are selling and making that purposefully false would surely be covered under the law as fraud.

Ive never heard of anyone purposefully lying about their drop rates, I can only assume because no one I know would be that awful, and given that so much of a Live Ops title is based on trust I really don't think the incentive is there.

One thing I will point out and I've said this before. It would take an awful lot of spenders split into different groups with different probabilities to be able to see an appreciable difference in the numbers. This would be especially true for anything like individualised drop rate changes, I can't see that anyone would be able to get enough data to be sure, especially given how rapidly most games evolve once live. Beyond having progress based loot boxes, eg paying out different items based on whether you're in the 'lava valley' to when you've reached the 'snowy mountains' or whatever I've never actually heard of anyone 'manipulating' drop rates, well, not beyond 'loser protection' where you will be guaranteed a certain rarity if you haven't received it in n-many loot boxes.
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Eddie In Product Manager - Games, Mobile, Boss Fight Entertainment4 months ago
So the title of this article is actually, "Loot boxes a matter of life and death, IT'S AN EPIDEMIC THE SCALE OF WHICH THE WORLD HAS NEVER SEEN!!! *DUN DUN DUN* but we don't actually know if this relationship is causal or not." My high school teachers would fail me for talking crap before completing the work.

I remember a time when I gave my full trust and utmost respect to Doctors of all kinds. I expected Doctors to be those with intelligence, experience and data far greater than I could possibly amass working on the bleeding edge of science. Now I'm just really sad that Doctors are just Misters and Missuses who I have to fact check before I believe them or not.

Are loot boxes a source of addiction or a problematic outlet for other mental disorders?

The jury is still out on whether behavioral addictions (ie. food, sex, shopping, gambling, video games, loot boxes) are "real" addictions like substance related ones (ie. drugs, alcohol). I'm in the camp that behavioral addictions are just outlets for other mental disorders, I still give a huge thumbs up to clinicians like Dr. Domoff, who is on the front lines regardless of what I think and her point that context matters. She sees that there are already plenty of tools for parents to control game time and spend but "there are barriers to parents and children interacting around games." Now we're getting somewhere - this is something I can do something about! It's our frickin' day jobs to condense complex information into accessible junks for regular consumption! So, if say we generate and distribute player reports that show a player's spend and play time patterns over time, in addition to more game specific information, could that better inform parents about what their kids are actually doing in a game? Okay, let's do this but I'll fully expect that I'll get more Doctors telling me that these player reports are insidious, predatory and destroying gaming as we know it.

tldr - don't spout sensationalist crap at me, give me a problem and I'll solve it for you.
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Show all comments (17)
Klaus Preisinger Freelance Writing 4 months ago
The way I read it, life or death was used figuratively, not literally. But the headline reframes the context causing the shift from something figurative to something seemingly literal. Aside from being literally click bait, the figure of speech then causes a revealing runaway effect in the comments; how serendipitously.

Here you have a researcher presenting his results only to be told in the comments that this is not proof enough. Well, I am sorry, but studies on how computer software interacts with millions of people leading to potentially tens of thousands of tragedies as a result is a bit more complicated than proving 2+2=4. Hence the results are a little less clear cut than demanded. Especially when you blend his scientific research with his informal comments while presenting it and use one to discount the other. I get why the industry wants to stay away from notions of gambling, while demanding studies on lootboxes in specific. Because there are thousands of studies done on gambling and it be best for video games, if they were not associated with one of them.

But there will be more studies, comparing the effects of gambling and how lootboxes relate to them. This will lead to a clearer picture of the truth that is likely not just going to affect games, but also other forms of commercialized randomness that have gone unnoticed in the past, or slipped through the cracks of the law like a weird bath salt from that shop at the corner. Society tolerates a lot of things, sometimes for centuries, until it doesn't. In the context of the next 5 years, it will not be about lootboxes, card games, single publishers or platforms, it will be about commercialized randomness, or commoditized randomness. That is the buzzword term to look out for.

No matter the amount of studies, people will still try to defend leaving human urges unchecked as a necessary price for freedom, or flat out deny it like climate change or smoking leading to a high chance of developing cancer. But I give these people the benefit of the doubt, claiming they can quit doing that any day they choose. After all, claiming to be right in the face of scientific studies, what kind of narcissistic addiction is that? Wait? You want to tell me the answer to that on your Instawhat now?

In contrast to studies on setting out to prove drunk driving is a bad idea, we need to do more than scrape corpses from the highway, tally them up and ask people whether death is bad or not. Even if that wasn't a rhetorical question, Christian funerals are still sad events with people crying and not frat parties where people with a pitcher shout 'bro, my dead sis is in heaven, I'm so happy bro', in your face with the drunk driver that delivered the sister to heaven as a guest of honor. But I bet once somebody proves that some lootbox game lead directly to the death of 100 people, that will be the default industry position. I hope this paragraph can convey that our society does not run on reason, hence expecting video games and legislation to be reasonable is an idea tempting fate. If you still believe society runs on reason, Adam ruins Everything has you covered.

The problem:
Clear head of everything. Picture randomness as a commercial product. Apply economic science first to evaluate the product. Then add behavioral psychology in a second step. Then try to compute the legislative results. Imo, the ESA still has an angle of approach that leaves them wide open to be killed off in one swoop.
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Ian Griffiths Product Owner, Hutch3 months ago
@Klaus Preisinger:
"This is so important. It's not something we should trivialize or laugh at or compare to baseball cards. This is life or death"
Dr. David Zendle
"There's one clear message that I want to get across today, and it stands in stark contrast to mostly everything you've heard so far," Zendle said.
There is no reasonable way to read these as either figurative or informal, especially when being given to an FTC workshop on the matter. I think you're reading what you want to read into this despite the evidence which is particularly ironic given the claims you are making.

Here you have a researcher presenting his results only to be told in the comments that this is not proof enough. Well, I am sorry, but studies on how computer software interacts with millions of people leading to potentially tens of thousands of tragedies as a result is a bit more complicated than proving 2+2=4.
The researcher himself acknowledges that his evidence doesn't explain what the causal relationship is. But look, it's been years with tens of millions of players and still no one has demonstrated harm. How long do we have to wait before we accept that the prevalence of issues, if they even exist, are so low as to not warrant attention?

In contrast to studies on setting out to prove drunk driving is a bad idea, we need to do more than scrape corpses from the highway, tally them up and ask people whether death is bad or not.
Now you're bringing up deaths. Again, where are the corpses? Where are the harmed? Conflating things with death isn't helpful because it's a binary without comparison.

But I bet once somebody proves that some lootbox game lead directly to the death of 100 people, that will be the default industry position.
You complain of unwarranted claims of hyperbole but then engage in speculation that loot boxes might actually kill people, do I even need to point out the issue with this?

If the ESA is shut down then that will happen, if Loot Boxes are legislated then that will but fantasies about the fictitious death count of a random digital items doesn't move the debate forwards or help in any way.

Edited 2 times. Last edit by Ian Griffiths on 11th August 2019 12:36am

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Brendan Sinclair North American Editor, GamesIndustry.biz3 months ago
Just weighing in with my impression having watched the panel. My understanding was that he was saying loot boxes are a matter of life or death because they either create or take advantage of problematic gambling issues. He can't say which of those two it is, but even in the better case scenario that they're just an attractive thing to people who are already problematic gamblers, the industry is still profiting from vulnerable customers and furthering disorders that destroy lives. That was how I understood his point, at any rate.
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Eddie In Product Manager - Games, Mobile, Boss Fight Entertainment3 months ago
@Klaus Preisinger:
No matter the amount of studies, people will still try to defend leaving human urges unchecked as a necessary price for freedom, or flat out deny it like climate change or smoking leading to a high chance of developing cancer.
If your idea of checking human urges, like the impulse purchase of candy at the cash register (a mashup of examples you used in previous comments), is regulation, then I'll just flat out agree to disagree and pray that I never live in such a society. I firmly believe that individuals must take ultimate responsibility for their own actions.

@Brendan Sinclair:
Thanks for the clarification. I don't believe I was too off base with my interpretation. My point is that the causal relationship really matters. If loot boxes are proven to create addicts, then there is a pretty clear cut case for regulation. If a small subset of our consumers, such as problem gamblers, are responding in unhealthy ways to loot boxes, then the case for far reaching regulation is less straightforward. If there was a causal relationship that showed that video games creates mass murderers, no amount of self-reported ratings would save our industry. The world will not regulate the entire retail industry because shopping addicts exist. The more pragmatic approach would be getting help to those shopping addicts.

We need way more transparency about how our business models work. Heck, most people in the gaming industry doesn't really understand the science behind microtransactions. Product management practices like using data analytics to optimize storefronts and offers is black magic for most folks and that has to change. In addition, I, for one, am perfectly happy with disclosing our drop rates and any sort of audit of those rates. This would also mean that I'm okay with penalties on those who mislead or lie to consumers about their rates. Finally, it would be a great gesture if the industry went, "Loot boxes are quite ethical and fun BUT, we understand there are folks who are going through tough times... here is a massive check for the mental health resources to help those people out."

Edited 1 times. Last edit by Eddie In on 11th August 2019 4:04am

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Klaus Preisinger Freelance Writing 3 months ago
then I'll just flat out agree to disagree and pray that I never live in such a society. I firmly believe that individuals must take ultimate responsibility for their own actions.
Since the 90ies that is a dominant form of societal structure, especially in countries that are the most affected by the advertising industry. From a business perspective, it is a very alluring type of society since all the blame is assigned to the person that has been tempted into doing something, while little to no blame is put of the person who did the tempting. This lack of compassion and ignorance towards victims should not be the only type of society we pray to live in. At least as long as we pray to a mainstream religion god and not to the Deep Ones from a Lovecraft horror novel.

However, even if one has the right to self-destruct as his sense of responsibility sees fit, there is the issue of collateral damage. You do not have the right to cause collateral, not a Judge in Texas that will not hold you accountable for the collateral you cause. What will you say to other victims of alcoholics or gamblers? That they should be proud being part of the freedom of irresponsibility that person enjoyed when they also destroyed your life? Make no mistake, most governments will hold children liable for their old age parents in some form or anther. Hence the idea of only ever having yourself to consider is an illusion. People do not only have responsibility for themselves but towards anybody the rules law connect them with.

The rule of law also binds consumer and providers of goods. So why should the responsibility only go one way? Because it is cheaper? Because it is more convenient? Because it is more profitable? Sorry, most parents will see it like 'you tug on my kid, I tug on you, you prey on my family, I get back at you'. Maybe not in a Texas six-shooter kind of way, but rather a very modern civilized, rules and regulations kind of way. Because we do not want anarchy and there will be accountability once negative fallout occurs.

Taking responsibility is the result of being held accountable, that is what you prayed for and that goes both ways in an honest business relationship. One could say checks and balances. You make me spend my money on all the lootboxes, my bank holds me accountable. Again, you can blame the victim for being tempted, but we also got a good 3000 years of civilization in which societies also went after the original cause who tempted the person in the first place.
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Eddie In Product Manager - Games, Mobile, Boss Fight Entertainment3 months ago
@Klaus Preisinger: It's ironic that you bring up Texas a lot in your response considering how highly folks here value personal freedom. It goes without saying that individuals do not live in vacuums and each of our actions affect others. Nevertheless, the state has no business telling me or my family how to live our lives; our destinies are our own.

For all of the history you bring up, I fail to see how any of that has to do with the topic at hand. Merchants present their wares in the most favorable manner possible and try to get consumers to buy. When has society risen up against merchants for this?

Good regulation is in ensuring that merchants aren't lying to their consumers. I believe the current wave of regulation (whether it's self-imposed or by the government) will improve the level of transparency consumers are provided around loot boxes and will probably include things like odds disclosure and audits of those odds. I also don't see a problem with adding loot boxes to the M rating for the ESRB. Further regulation will require a causal relationship between loot boxes and gambling to be established and negotiation on how to identify children on the internet.
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Klaus Preisinger Freelance Writing 3 months ago
Good regulation is in ensuring that merchants aren't lying to their consumers ]
Good regulation is also telling the merchant that he is not allowed to sell harmful stuff to people, even if he tells the truth. Granted, bit of an extreme example, but you made good suggestions yourself on how less extreme regulation may go down in which the merchant is still allowed to sell to some, but not all people.

Society has always regulated merchants in terms of what they can sell. Having a Food and Drug Administration is not something countries skip on. Public health inspectors are judge jury and executioner when they do not like what they see in a restaurant. Think of that, a society built on separation of power still thinks there are jobs more important than that separation.

Beyond food, you cannot use any dye you want in the clothing you intend to sell, you cannot use any material you like to fire proof something and the list goes on and on. Regulations are a type of wisdom of the crowd that is enforced on you, that too often was bought with decades of people not knowing what they died from. (e.g. Asbestos, Cigarettes, E.Coli in what seemed to be clean salads). Our long life spans do not come from dropping an occasional Aspirin, they literally come from enforcing an environment that is not shit and smog. This type of hard found reason is not oppression. Do you feel oppressed by traffic lights and signs? Ignoring regulations may be tolerated to a degree, but Child Protective Services will certainly infringe on your family's manifest destiny once it gets too far out there. That is, if you manage the miracle of talking your wife into whatever. Sure, you can have your ultimate personal freedom, but chances are your price will be isolation.

While plenty of industries get away with being largely unregulated and have no problem poisoning water supplies killing people in the process, the reaction should not be demanding the same right to walk over people's corpses, it should be to double down on drawing a line. As frustrating as it is that some industries literally get away with murder, it is best to remember that the video game industry is not one of them. The video game industry can't even send goons to somebody's door without it exploding back in its face.
When has society risen up against merchants for this?
as you can see, the when is now, the where is in every corner of the U.S,.Europe and beyond.
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@Ian Griffiths: "The modelling from Elmachtoub's group is certainly interesting. His caveat is an interesting one:
"It turns out if the seller publishes some list of probabilities and lies about them, the seller can make significantly more money," Elmachtoub said. "There is a benefit for lying. Since there's a benefit for lying, there must be regulation around this.""

Yes, the good doctor is implying that game developers lie to their users. I assume his logic is that games are bad and developers are bad too because the make those bad things and lying is bad so game developers lie. Very scientific.
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Ian Griffiths Product Owner, Hutch3 months ago
@Kim Soares: Haha yea!
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David Zendle Researcher 3 months ago
Hey! So I'd like to take a moment to respond to some of these comments. Please let me know if there's anything else you'd like me to address - I'm happy to do so. I really think that co-operation between industry and academia could be very positive here.

So - the first thing to note is that I'm not a raving anti-games nut. If you look back to the times when games have been indicted in school shootings, you'll see me writing papers and news articles arguing that we have almost no evidence that violence in video games causes real world violence (https://www.usnews.com/opinion/civil-wars/articles/2018-03-08/trump-shouldnt-blame-gun-violence-on-violent-video-games).

My research is considered to be some of the most rigorous stuff out there on game effects. In fact, if you look at the evidence that was given by Chris Ferguson to Trump's School Safety Commission, you'll see that some of my research is cited to say 'hey, maybe we should be concerned about other sources of violence in society'.

That is all intended to preface my comments on loot boxes - I've historically been sceptical of video game effects. I'm not a hack. I'm not your enemy.

My opening remarks addressed problem gambling. There was nothing figurative or metaphorical about what I was saying: Problem gambling kills. People literally go out and take their own lives because of their gambling problems. An addiction to gambling is every bit as serious as an addiction to drugs or alcohol, and shouldn't be trivialised. If you want to know more about what this is like, please get in touch with a charity like Gambling with Lives (https://www.gamblingwithlives.org/), whose explicit aim is to reduce gambling-related suicides. Alternatively, if you live in the UK, an episode of Panorama tackled the topic yesterday - it's a good watch (https://www.bbc.co.uk/iplayer/episode/m0007m0t/panorama-addicted-to-gambling). In either case, you'll see that gambling problems are horrifying.

So: We have a case where loot boxes in games might be causing problem gamblers (who are already incredibly vulnerable!) to be spending differentially more cash on loot boxes. This isn't a great situation, and you could argue that financial harm is being done to these consumers.

However, the really bad problem is that maybe loot boxes might be causing the development of gambling problems. If this is the case, then the way that you monetise your games will lead to severe long-term consequences for some gamers. Those consequences will include financial distress and bankruptcy. If loot boxes cause problem gambling, and they keep being sold in an unregulated way, then they will inevitably include suicide. Basically, if loot boxes cause people to become problem gamblers, the industry will someday have blood on its hands.

Nobody set out for this to happen. I get that. And it's *far from certain* that this is what's going on. The links we see could simply be a situation in which problem gamblers are spending more money on loot boxes, rather than loot boxes causing problem gambling. But I would argue that the industry has a moral duty to try to help work out what its products are doing to its consumers. Not a legal duty (you don't have that) - a moral one.

Instead, what we see from representatives of the ESA and ESRB is a form of stonewalling, in which connections between loot boxes and gambling are downplayed, and loot boxes are likened to baseball cards. This is deeply unhelpful, as it doesn't get us any closer to finding out what's really going on. Odds disclosure is also an unhelpful step - please, go talk to any gambling researcher. Ask them how odds disclosure affects gambling behaviour amongst problem gamblers. Spoiler: It doesn't do anything. Problem gamblers aren't gambling because they think the odds are good. They're gambling because they're addicted.

All that people like me are asking for is some cooperation on the issue. Some kind of acknowledgement, some kind of data sharing arrangement. If we did this, we could VERY EFFECTIVELY investigate whether this was really happening. There's a really good chance that it'll turn out that loot boxes aren't causing problem gambling. If this was the case, I would be ECSTATIC. I really, really, really don't want this to be what's going on. Really!

Alternatively - it might turn out that loot boxes do cause problem gambling. In this case, we would need to take immediate action in order to stop further harm. Nobody wants this. But crucially - the quickest way to find out whether this is happening is with industry co-operation. Thus far? We've seen less than nothing. I feel that, given the scope of the concerns on this issue, this is really becoming very unhelpful. It reflects extremely badly on the industry at large.

So, this is my plea: If anyone out there works in industry, and would like to help find out what is actually going on, please get in touch. I'm not a monster. I'm just extremely worried.
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Ennio De Nucci Game Designer 3 months ago
Unfortunately is really hard to have a debate about this on a forum, there are so many things to be said, explored and understood (from all the parties involved).

I could go on forever trying to explain how the game design intrinsically negates the fundamental concept of the gambling business (which is: the house always wins).
A player who doesn't get what he wanted in a loot box has not lost and his eventual win is always guaranteed. By game design. Because otherwise he would stop playing.
Imagine a Casino where every customer is guaranteed to hit the jackpot. Out of business in the opening day.

Loot boxes (when they are tied to monetization, which by the way, is not always the case!) are designed to make sure BOTH that the game is profitable for the developers and that the average player can get what he wants in a reasonable amount of time (or money).
Loot boxes are not designed to give out less that what is needed to get them. It's the opposite actually!
Are they designed to give more the more a player spend? Yes, of course! That is A LOT different from gambling.

Ok, I get it. Researchers like David are trying to understand the implications of this randomized rewards in the bigger picture of the world. Where kids might get used to something that might lead them to do something else, that might harm them.

Can these researches be done without associating words like 'death' to videogames? Can the results be presented in a neutral and pragmatic way?
Using certain words and being rhetorical is actually being the enemy.

While I would expect certain rhetoric from politicians, I'm surprised to see such choice of vocabulary from a scientist without definitive and conclusive studies.

Also, regarding 'seeing less than nothing' from the game industry.
How is this not being an enemy?
Have you talked with game developers directly? Have you been to some industry event trying to understand the design of Free to Play games? Have you checked key-notes or dev-blogs about the design of game economies?
Or do you expect some one from EA or Activision to come your door with detailed financial reports and customer profiles?

David, come to the next GdC and talk to us. You'll find out how most developers and business in the game industry are actually thinking VERY HARD about how to keep offering fair and engaging experiences to their players.
You will hear words like TRUST, FAIRNESS and FUN a lot more than you think.

Edited 1 times. Last edit by Ennio De Nucci on 14th August 2019 12:39pm

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Eddie In Product Manager - Games, Mobile, Boss Fight Entertainment3 months ago
@David Zendle: Thank you for your response.

Your intent may have been to remind the world that, regardless of the causal relationship, loot boxes are problematic for problem gamblers. Your message was covered in many outlets to read: "Loot boxes linked to problem gambling," instead of, "Loot boxes trigger bad things in problem gamblers." You don't control how your message gets covered but much like violence and mass shootings, this is the public perception I'm fighting against.

I'm all for coming up with measures to protect our most vulnerable users from hurting themselves in our games. Off the cuff I'm thinking of a refund policy for folks who call in and let the publisher know about their condition. I'd fully refund such folks and flag them so that they are blocked from making purchases above a certain amount (or making purchases at all). Of course, the industry would also need to take additional measures to prevent fraud but this can be done.

With regards to data sharing, the problem is that no one collects any personal information. I would imagine to get what you want, you'd need to get your subjects to sign a ton of release forms for personal information, collect their user IDs, a game company would send you the data and then you could map player activity data with observed effects in the real world.

Edited 1 times. Last edit by Eddie In on 14th August 2019 4:11pm

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David Zendle Researcher 3 months ago
Hi Eddie,

Thanks for the responses

Eddie - Thanks so much for replying. What you're suggesting is a really positive idea. I think the announcement / uptake of strategies like that would go a long way to demonstrating to researchers (and regulators) that people in the industry are taking the issue seriously. NB: This doesn't do anything for arguments that loot boxes cause problem gambling. But it does do something for the other side of the argument. It'd be a great step. The next step would be a rigorous programme of research that tests the hypothesis that loot box spending causes problem gambling. If we get nothing there - then we could start putting this dispute to bed.

My question to you is: how strongly is the (ethical) attitude you've conveyed represented by the organisations that are supposed to self-regulate your industry? I would argue that both the ESRB and ESA's presentations at the FTC workshop conveyed a lack of engagement over links between loot boxes and gambling. Please, tell me if I'm wrong on this - you can find the presentations here: https://bit.ly/300ZcyR

Hi Ennio,
Also, regarding 'seeing less than nothing' from the game industry.
How is this not being an enemy?
Have you talked with game developers directly?
I would disagree with you on this one: I've directly contacted over 50 games companies in the UK. Nothing.

I've sent open letters to the games industry. Nothing.

I've appeared on national TV and radio shows and called for industry to talk to me. Nothing.

I've called for people to talk to me while I appeared in Parliament. Nothing.

The only conversations I've had with industry people about their concerns have been informal, and not in their capacity as representatives of their organisations.

I hope this changes. But I think it's unfair to say that a lack of conversations have been my fault.

Maybe I should be going to GDC? But you can hardly say that I haven't made an effort. I've been trying really hard!
With regards to data sharing, the problem is that no one collects any personal information
I would strongly question the idea that companies don't collect data on their users' spending. It might be that you're referred to companies collecting personally identifiable information - you should know that this is not necessary for research purposes. We don't need to identify each of our participants - in fact, its better if they remain anonymous. I would imagine that the terms and conditions of what companies can do with their users' data is already quite broad, and could easily be broadened to incorporate what we're talking about. A lack of data isn't the barrier. A willingness to disclose it is. Please - change my mind.
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Eddie In Product Manager - Games, Mobile, Boss Fight Entertainment3 months ago
@David Zendle: The ESA won't take the lead on anything that isn't already approved by its key members. I imagine the ESA will often take the most conservative position possible. I wouldn't be too surprised or disheartened that the ESA isn't a moral leader.

Re: data sharing
I'm not sure how much we can learn with anonymous player data. Without knowing someone's age, disposable income or their pre-disposition to gambling and what not, you could not differentiate between a healthy consumer of loot boxes and a problem gambler. The world is a massive place and there are folks who defy conventional wisdom. I correspond with multiple users who spend tens of thousands of dollars on every new game they play just to get the screenshot that says he's #1 as a trophy. Just using data we have no way of knowing who these people are, where they get the money and what's really driving them.
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