No matter the country or the language. Many people play video games and engage in online communities daily. Spending part of your spare time playing online games like Fornite or LoL (League of Legends) is not odd and has become a common practice.
This hobby stimulates the areas of the brain involved in learning and activates reward mechanisms by solving or skipping a problem within the game. Passing a game is a rewarding activity that increases dopamine levels but simultaneously activates the desire to repeat the same action that has led us to get that reward. This uncontrolled desire can become addictive and lead to mental health problems due to its out-of-control use.
Another one is related to the family economy. We refer to spending money on video games to obtain loot boxes or random in-game purchases/rewards.
The acquisition of these loot boxes that improve the experience within the video game has raised economic and health issues in young people.
We look into these problems and explain what loot boxes are. We also examine controversial points and the new rules Spain will set in the modern game industry.
What are loot boxes?
Loot boxes are chests, crates or card packs that appear in some video games to get game items in exchange for a monetary payment. In other words, they are a monetisation tool through which the player purchases an opportunity to receive a selection of upgrades randomly.
There are different types. Among the most common, we find the acquisition of skins to improve characters’ physical appearance and accessories such as masks, costumes and weapons. These upgrades are not available in the game shop and can only be bought by the user through these reward boxes.
Players buy loot boxes to reach a new status, get upgrades no one else has, and show them off. The rarer the upgrade, the more dopamine it generates in the buyer since they have something almost exclusive that other players do not have.
The beginning rewards of avatars began in Asia; at first, they could only be found in free-to-play games. It was a means of income since players did not have to pay to play. Later it spread to all kinds of video games, and its purchase became popular among teenagers.
They should not be confused with other systems to unlock items in video games, such as micropayments. In these ones, the player knows what he buys, while in the loot boxes, he does not.
Why are loot boxes popular among those under 18?
28% of adolescents bought loot boxes in 2021 on base in an International University of La Rioja research, a figure warns of the risk of suffering a higher prevalence of having mental problems and behavioural disorders associated with loot boxes purchase. Among the main issues we find:
- Compulsive and pathological gambling behaviours are far from the recreational purpose of the activity.
- Self-control loss. It implies behavioural changes in real life and leads to anxiety and irritability if the player cannot obtain the desired item in the boxes.
- Inappropriate use of their bank cards or their parents, spending amounts far from what is appropriate for their age range.
- Damage of skills to deal with real-life problems. Gaming takes precedence over other issues and daily activities, resorting to gambling as a recurring means of escape.
Are loot boxes currently considered gambling?
Loot boxes have similar features to gambling, as they share the need to pay to achieve a prize and the randomness of the outcome.
Furthermore, the mechanics of loot boxes are almost the same as that of slot machines. According to the Spanish draft laws, “the functional design of certain random reward mechanisms is very similar to the intermittent behaviour reinforcement schemes so characteristic of games of chance,” and this “stimulates the emergence of cognitive disorders and gambling behaviours more and more persistent among the players.”
In the same way, they have other characteristics in common such as the famous “near miss” or “losses disguised as wins.”
The negative consequences derived from both games are also another point in common. Both share economic, family, social, and pathological issues, including the damage they cause to vulnerable users such as minors.
Despite their similarities, we find some differences that do not play in the same league. This divergence involves the need to develop a specific regulation that deems their connection with gambling but, simultaneously, the distinctive features of these boxes.
What does the Spanish government draft say about Random Reward Mechanisms?
The success of these hidden rewards boxes among Spanish minors has laid on the table the urgency of creating a new law code to address the issues of loot boxes. There is only a first eraser which includes an array of measures to minimise the potential harm caused by these chests.
According to the new regulation, loot boxes are “virtual objects or processes integrated into the dynamics of certain video games whose activation offers the player the opportunity to obtain, randomly, virtual rewards or prizes that can be used in the environment of these entertainment products.” For these prizes to be considered loot boxes, they must be redeemable for real money, NFT or cryptocurrencies.
In addition to establishing a specific definition of loot boxes, the government want to force loot box maker companies to provide precise information on how these reward mechanisms work. The currently offered information is fairly narrow. The details must include the actual chances of winning a prize and be written so that any video game user can understand them.
Another of the most commented measures is the ban under 18 from accessing games with loot boxes. To guarantee this rule, “the platforms that offer loot boxes must enable a documentary verification system of the identity of the players.” The Ministry of Consumption will punish all companies that do not comply with new rules with fines. The fines could range from 25,000 to 3 million euros.
But there are other designed measures to protect consumers over 18 years of age. They can turn off the option to purchase loot boxes within games and set a maximum income they want to spend. In this way, people of legal age will establish control of their economy.
Restricting loot box advertisements is another proposal of the draft. Publicity can play a double role here. Firstly, the purchase of loot boxes can be advertised (typically within the game). Secondly, some games offer the possibility to open a loot box by watching an advertisement first. So, offline and online advertising will be prohibited except on video game platforms.
After the law’s approval, Spain will likely become the first European country to regulate the loot boxes in video games. As we see, measures to protect consumers from potentially harmful effects can be implemented at different points of the consumer journey. These aspects are not definitive, and anyone can give their view at the following address: dgoj.sgregulacion@ordenacionjuego.gob.es until July 23.
Methods to avoid the purchase of loot boxes by minors
One of the main changes introduced by the new regulation is that minors will not be able to acquire loot boxes. A digital identity verification process will be implemented to avoid that. This process will force any player to provide its ID to verify its age.
In addition, the Spanish Government pretends to guarantee the system’s security with other forms of recognition such as biometrics. Nowadays, this ID verification process is used in some specific online gaming platforms in which Mobbeel already verifies legal age.
Companies in the gaming industry use our MobbScan technology to verify the identity of their users, complying with the provisions of the DGOJ. You can download our online gaming and gambling brochure if you want to know more.
Other functionalities will be introduced to keep those under 18 out of addiction. Parents will be able to configure parental controls or directly disable purchases within the video game to control the play behaviour of their children.
If you want to know more about our Digital Onboarding technology and how we use it in MobbScan to verify the identity of people, you can contact us through our contact form.
I am a Computer Engineer who loves Marketing, Communication and companies’ internationalization, tasks I’m developing as CMO at Mobbeel. I am loads of things, some good, many bad… I’m perfectly imperfect.
