Harms associated with loot boxes and simulated gambling in video games
A review of the evidence
Nancy Greer, Cailem Murray Boyle, Rebecca Jenkinson
The past decade has seen an increase in the monetisation of video games (i.e. in-game purchases), games with chance-based outcomes (e.g. loot boxes), and simulated gambling games.
To improve understanding and inform policy and regulatory responses, we conducted an evidence review to:
- assess what types of harms, if any, are associated with engagement with these products
- identify which groups may be most at-risk or vulnerable to experiencing harm, and
- identify recommendations for responses to reduce harm related to these products.
What we found
Our review found reliable evidence that:
- Loot box engagement, including viewing, opening, and especially purchasing, was associated with problem gambling and internet gaming disorder.
- Simulated gambling engagement, especially in-game purchasing in social casino games, was associated with problem gambling.
- Other in-game purchasing (not including expenditure on loot boxes or in simulated gambling games) was associated with problem gambling.
In addition, there was some evidence of an association between:
- Loot box purchasing and increased psychological distress and financial harm.
- Simulated gambling engagement with internet gaming disorder, psychological/emotional harm, and other negative consequences.
- Other in-game purchasing and internet gaming disorder, financial harm and emotional and behavioural problems among adolescents.
The review identified several areas for harm mitigation and regulation, centred around consumer protection measures such as:
- Age restrictions for people aged under 18 years
- Clear labelling of gambling-like products and features in video games
- Removing or reducing game features that encourage excessive expenditure and gameplay
- Provision of support information, e.g. help services, educational material.
Loot boxes: An in-game purchase of a virtual container (i.e. loot box, mystery box or chest) that randomly rewards players with functional items or modifications (such as cosmetic items or weapons) based on chance or adjusted probabilities (King & Delfabbro, 2020). Loot boxes can also be obtained for free via gameplay (Rockloff et al., 2020).
Simulated gambling: Games with features that resemble or function like commercial gambling activities (e.g. Texas Hold 'Em Poker; King, 2018). This includes social casino games, free demo (demonstration) games and other games with gambling like components. Some, but not all, simulated gambling activities have in-game purchases; however, these in-game purchases operate in a closed-loop economy where they cannot be redeemed for money or traded among players.
In-game purchases: Financial purchases in games for digital goods or services, also referred to in the literature as 'micro-transactions'. In-game purchases may be purely aesthetic (e.g. cosmetic items or 'skins'), confer gameplay advantages (e.g. pay-to-win), contain these items as randomised contents of uncertain value (e.g. loot boxes), or include any other in-game expenditure (Zendle, Meyer, & Ballou, 2020).
This research was commissioned by the Australian Government Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA). Access the full report on the DITRDCA website: Harms associated with loot boxes, simulated gambling and other in-game purchases in video games: a review of the evidence