Loot boxes reported "structurally and psychologically akin to gambling"

Original story: Links between loot boxes and gambling have been "robustly verified" by a new report commissioned by GambleAware, a UK charity aiming at reducing gambling-related harms.

The report, conducted by the University of Plymouth and the University of Wolverhampton ahead of the upcoming Gambling Act review, consolidated results from a dozen studies and found that loot boxes are "structurally and psychologically akin to gambling."

Looking at 7,771 loot box purchasers, the report showed around half of the revenue generated by loot boxes -- worth £700 million total in the UK in 2020 -- comes from 5% of buyers.

"A third of these gamers were found to fall into the 'problem gambler' category (PGSI 8+) establishing a significant correlation between loot box expenditure and problem gambling scores," GambleAware said.

The report also looked into the habits of 14,000 players and found that young men and those with a "lower educational attainment" are more likely to purchase loot boxes.

"The interviews also highlight that the digital assets in loot boxes often have real-world and/or psychological value," GambleAware continued. "This suggests that loot boxes could be regulated under existing gambling legislation."

The charity called for policies to be put in place, including a clear definition of what constitutes a loot box, enforceable age ratings on games, full disclosure of the odds when purchasing, spending limits, and prices displayed in real currency (as opposed to in-game currency).

Dr James Close, senior research fellow at the University of Plymouth and co-author of the report, commented: "Our work has established that engagement with loot boxes is associated with problem gambling behaviours, with players encouraged to purchase through psychological techniques such as 'fear of missing out'. We have also demonstrated that at-risk individuals, such as problem gamblers, gamers, and young people, make disproportionate contributions to loot box revenues. We have made a number of policy suggestions to better manage these risks to vulnerable people, although broader consumer protections may also be required."

At the end of 2020, a study by the Gambling Health Alliance suggested that young people struggle to keep track of how much they have spent on loot boxes. 23% of 11 to 16-year-olds said they had paid money to open loot boxes, with 34% of all respondents saying they had first purchased them by the time they were 13, due to the lack of age restrictions on games containing the randomised monetisation mechanic.

Germany recently passed a proposed reform to the country's youth protection law, which could result in new standards being applied to video games featuring loot boxes.

Loot boxes are expected to generate $20 billion worldwide by 2025.

Update: UK games trade body UKIE reacted to the publication of GambleAware's report, highlighting the recent actions taken to set guidelines around loot boxes.

"The UK games industry has already taken action in regards to concerns around loot boxes," a UKIE spokesperson said. "Probability disclosures has already been introduced to the major game platforms; a new paid random item descriptor was added to the PEGI age rating system in 2020 to inform players of their presence; settings and tools on all major game devices -- and in a number of leading games -- already allow players to manage, limit or turn off spend.

"You can find out about all these measures, and more about responsible play, at www.askaboutgames.com. We will also continue to work constructively to support our players in partnership with Government and other organisations."