The video game industry has evolved massively over the past two decades to become a business that is projected to reach a total revenue of $152 billion, completely surpassing the movie industry. A large part of this has come from the advances and massively growing popularity in online multiplayer and mobile gaming. This has also seen a surge in the multiple methods and practices that development studios and production companies have concocted methods in which to monetize their games, especially with the huge growth in popular ‘free to play’ games.
These ‘free to play’ games have often sought alternate means of gaining revenue, either through advertisements or in-game purchases. The ‘free to play’ has become such a massive part of the video game industry, due to the low bar for entry with the games requiring generally low system specifications and of course the fact that entrance to play is monetarily free.
With the variance in which video games have sought out alternative means of earning gaining income from their player bases, the advent ‘loot boxes’ has grown into a huge phenomenon in the video games industry. This method was first conceived back in 2004, but has grown to gigantic proportions in its popularity, with now large video game companies such as Blizzard, Electronic Arts and Ubisoft taking advantage of this new method of gaining extra and continuous value out of each game they make.
‘Loot boxes’ have very similar mechanics to slot games, in that they require a (usually) monetary purchase for an in-game box that contains a random assortment of items, such as cosmetics, progression boosts, upgrades or other features relevant to the game itself. The player has no idea what the boxes may contain, until opening them and the items generally have probability variances, regarding rarity and in-game value, when it comes to what the player may receive. This bears heavy similarities the to the RNG mechanics of typical slot games. It is not a far stretch that this can be seen as very similar to slot games as you enter a wager in order to hopefully receive something that exceeds the value of what one first stakes.
Over the past decade ‘loot boxes’ have become much more sophisticated with offering different boxes valued at different real world currencies at the recompense of receiving much more rare and valuable items. This methodology of increasing expenditure at the hopes of gaining higher valued items have caused many legislative bodies to take a closer and more scrutinised view of ‘loot boxes’, especially as many of the games they are featured in are also aimed at children under the age of 18, along with posing many of the problem-gambling risks that online casinos must cater for.
‘Loot boxes’ have managed to escape the attention of gambling regulatory bodies, due to the fact that no matter the outcome of opening a ‘Loot boxes’, you will always receive an item, whether it is something you were hoping for or not. This has been claimed to differ enough from conventional gambling, as with gambling you may not get anything at all from any stake you make. This loophole of what constitutes a ‘prize’ is what is currently ensuring that ‘Loot boxes’ stay outside of the UK Gambling Act.
Other regions have however taken action, as Belgium, Australia and Hawaii have all begun to take steps to bridging the current gap between ‘loot boxes’ and gambling, as well as going to lengths to ban such video game activities for minors.
At the time of writing, Canada has imposed no regulatory stance on the subject and it is therefore considered a fully viable and legal mechanic for the video games industry to adopt within the region. While studies are being conducted into the manner, this research is still in its relative infancy, but what little research that has been done has supported the proposal for further investigation into gambling type regulations when it comes to protecting players and especially with the concern for those under the age of 18. It is a likely prediction that Canada will follow suit with other countries who decide to consider ‘loot boxes’ as a gambling activity.