DCMS investigates loot boxes impact on gamers

The UK government is now calling for evidence on video game loot boxes. It is investigating the impact that these features have on gamers, amidst concerns that they may lead to problem gambling. Earlier this year, a report from a DCMS Select Committee recommended that loot boxes should not be sold to children.

Two children play video games together.

A DCMS Select Committee has recommended that the government categorize loot boxes as ‘games of chance’. ©Jessica Lewis/Pexels

Concerns Over Gambling Harms

Loot boxes are virtual items that can be purchased in video games. Their contents remain a mystery to the player until they are opened, but usually offer some kind of in-game advantage. Loot box prizes often consist of characters, skins and weapons. Loot boxes have been around for over fifteen years, however their increased presence in video games in recent years has caused concern.

The element of chance that comes into play when buying loot boxes has been shown to encourage behavior similar to gambling. This is particularly problematic when it comes to children buying loot boxes. To better understand the effect that these features are having on gamers, the government is looking for evidence of player experiences, both positive and negative.

The DCMS’ call for evidence will involve seeking information from players, as well as their parents and guardians. It is also looking for data and research from gaming firms, academics and other interested organizations.

Through its investigation, the government aims to obtain a clearer understanding of the loot box market in the UK, as well as how effective current parental controls and consumer regulations are in protecting players. If the collected evidence does indicate a need for action, the government will be able to take steps in ensuring that player protections are improved.

If necessary, legislation around loot boxes could be brought in with the new Gambling Act. The government is already preparing to review the current Gambling Act, which has remained largely unchanged since 2005. However, technological developments and the rise of online gaming mean that many aspects of the gambling industry are not taken into account in current legislation.

The investigation could lead the UK to follow in the footsteps of Belgium, which banned monetized loot boxes in 2018. Many other countries have introduced age limits on purchasing loot boxes. Gaming companies have also taken steps to improve their practices. The creators of Fortnite have made their loot boxes transparent, so that it is clear to players what they are buying.

Caroline Dinenage, minister for Digital and Culture, is keen to investigate the issue of gambling in video games. In press release published by the government, she said:

“Our valued video game industry is making good progress developing safer environments for our children to play in, such as parental controls that can be set to schedule and limit playtime. But we’ve listened to parents’ concerns about loot boxes and it’s right that we fully examine and understand any evidence of the harm or links to problem gambling they can cause, so we can decide if action is needed.”

Are Loot Boxes Gambling?

Video games are hugely popular and are now played by over half the UK’s population. The gaming industry itself is an important part of the UK’s cultural and creative exports. In 2018, it generated around £2.6 billion for the economy. In 2019, 27,000 people were employed in the UK gaming sector. In the last decade, the industry has grown sixteen times faster than the UK’s wider economy.

For these reasons, it is imperative for the government to gain a proper understanding of the role of loot boxes in gaming. Now that video games play a central role in every day life, it is vital that player protections, in particular for children and vulnerable players, are effective and relevant.

The government’s research will also investigate the impact of video games more widely on players’ behavior. The DCMS Select Committee’s report on Immersive and Addictive Technologies raised a number of issues in gaming, which it is keen to examine. The Select Committee stated:

“We recommend that loot boxes that contain the element of chance should not be sold to children playing games, and instead in-game credits should be earned through rewards won through playing the games.”

The debate over loot boxes in the UK has been long running. Reports from parents have told of children emptying bank accounts and families falling into debt over the compulsive purchases. Campaigners have been fighting to combat this issue, as growing numbers of children in the UK have developed gambling problems. This has become so prevalent that the NHS opened a gambling clinic for children in 2019.

On the other side of the issue, the Gambling Commission has been hesitant to legislate against loot boxes. It says that loot box contents have no financial value, making them different to gambling. However, third-party ‘skin betting’ sites allow players to buy and sell loot box contents, although gaming firms prohibit this.

The government’s call for evidence into the impact of loot boxes will close on November 22nd, 2020. Evidence gathering is aimed at video game players and the parents and guardians of those who play these games. The government’s open consultation forms can be accessed here.

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