In the UK, the Department for Digital, Culture, Media and Sport (DCMS) published a report recommending the regulation of loot boxes under the Gambling Act. This would classify video game loot boxes as a game of chance, and additionally, the inquiry recommends removing loot boxes from games aimed at children and adding an age rating denoting games that have loot boxes.
According to Eurogamer, this move is not law by itself, but sources have told Eurogamer that the recommendations will be taken seriously. And while this only affects Europe and the UK for the moment, it's a movement on the needle of one of gaming's hottest topics right now: the monetization of games and the prevalence of loot boxes.
What does the recommendation mean?
In an 84-page report, the DCMS issues a number of recommendations. It says the UK government should bring regulations forward to label loot boxes as games of chance under the 2005 Gambling Act. The Gambling Commission had previously said loot boxes don't fall under current gambling legislation, though it left the door open a little; in a statement, the Commission chief executive Neil McCarthur says that "they are a lot like a lottery."
The DCMS report also recommends that the government work with PEGI, the European video game age rating organization, to incorporate loot box labels for game ratings and corresponding age limits. Also, the Committee says that in the absence any research proving no harm is done to children by exposing them to loot boxes, they should not be allowed in games played by children until proven otherwise.
The Committee also called for updated research into "gaming disorder," and that game companies should be required to share data with researches and contribute financially to independent research.
Loot boxes in legislation
While loot boxes have been around for more than a full console generation at this point, stretching back to games like Mass Effect 3, they are much more prevalent today. In the era of "forever games" like Apex Legends and Overwatch, alongside yearly sports installments like FIFA and Madden, loot boxes have become an effective tool for getting continuous investment from a player base while rolling out new content.
Yet the ways these games roll out content, sometimes in pretty brazen fashion, can seem like games of chance. You're often investing money for a chance at a cosmetic skin or player, rather than paying straight up for it. And while Apex and Dota 2 have introduced means for ensuring you don't run into duplicates or can directly purchase items, the systems themselves have stayed in place.
The proliferation of loot boxes, combined with the rampant popularity of games like Fortnite, has led to the random-roll drops getting attention from higher powers. A loot box bill has been filed to the US Senate, and even last year, the FTC pledged to investigate loot boxes amid an ongoing crackdown in Europe.
The UK recommendation still isn't an actionable law against the sale of loot boxes, but it is part of an escalation towards regulating them. It's a sign that, should the games industry not take action, other regulatory powers will.
What have publishers done about it?
In some cases, this has already spurred action on the side of publishers, developers, and console makers. Recently Sony, Microsoft, Nintendo, and a number of AAA developers united around the issue, pledging to disclose odds and probabilities.
Other developers have ditched the concept wholesale. Rocket League developer Psyonix has ditched its loot crate system, and Apex Legends developer Respawn addressed complaints over its recent Iron Crown event, which gated the purchase of an item behind buying other items.
What This Means for Loot Boxes
This is another step down the path toward wholesale regulation of loot boxes. While not as extreme as Belgium, which banned loot boxes entirely, it's another sign that governments see loot boxes as a problem and are prepared to act. This is especially big news for EA, as FIFA is dominant in the UK, and EA relies heavily on revenue from FIFA Ultimate Team.
EA isn't the publisher who should be watching how this all unfolds. Gacha-style games continue to be extremely popular too, and Nintendo has several of them on the market as we speak. It's hard to imagine Fire Emblem Heroes or Pokemon Masters ever ditching their monetization schemes.
But the recommendation from the UK's DCMS is a notable one, as it's another higher body with regulatory weight saying something needs to be done. As we move into a new console generation and continue to explore new methods of delivering and playing games, the way they're monetized will be under a great deal of scrutiny.