Virtual Casinos: Are Video Games Preying on Our Addictive Tendencies?

by Trevor Bervik

Mix Star Wars with . . . well, anything, and you have instant recognition for your product. Under the licensing prowess of Disney, who purchased the franchise for just over $4 billion in 2012, the beloved Star Wars characters have graced such diverse products as boxes of macaroni and cheese, fishing equipment, and inflatable Christmas decorations. From these innocuous products, it seems unlikely that Disney would find themselves in the middle of a political controversy, but that’s exactly what has happened in the wake of the new video game Star Wars: Battlefront II, developed by EA DICE and published by video game company Electronic Arts (EA).

In Battlefront II, Electronic Arts—the exclusive producers of Star Wars video games— implemented a “loot-box” system where players could purchase in-game loot-boxes with real-world dollars. Opening these loot-boxes would unlock digital features, such as new characters or weapon upgrades, but the purchaser would not exactly know what feature they would unlock until the purchase was completed and the “box” was opened. Even iconic characters, such as Darth Vader and Boba Fett, were initially unavailable to gamers unless either an exorbitant amount of time was spent playing—about 40 hours per locked character—or by opening a large number of loot-boxes.

Gamers instantly complained about the system, calling the system “pay-to-win” and pushing back against spending additional money to unlock new content, especially after spending a minimum of $60 for the core game. The controversy exploded in the all-time most heavily downvoted post on the popular social-media site Reddit after Electronic Arts attempted to defend their practices.

However, the problems for EA didn’t stop at social media. Regulators in Belgium have begun looking into whether the loot-box system should be considered a form of gambling. Even in the United States, politicians are beginning to take notice. Hawaiian State Representative Chris Lee has described loot-boxes as a type of predatory behavior, even comparing the system to an “online casino” for kids.

Conversely, those in the industry disagree with the belief that loot-boxes are a form of gambling. Recently, Karl Slatoff, the president of game publisher Take-Two Interactive, has come out in defense of loot-boxes, saying the loot-box system is all about content and “[y]ou can’t force the customer to do anything.” Others in the industry compare loot-boxes with buying packs of cards, reasoning that since every loot-box contains “something” each purchase delivers actual content to the player, while true gambling doesn’t come with such guarantees.

But these industry reactions may be missing the point. Content from loot-boxes generally can be separated into three categories: 1) common low-level content; 2) rare mid-level content; and 3) extremely rare high-level content.

The type of content that falls into category 1 is typically uninteresting, like a short voice clip or a marginal upgrade for a character. Category 1 content is freely given from loot-boxes and players may receive duplicates in each successive loot-box.

Category 2 content is slightly more interesting and can include thing like costumes and better upgrades. This content is still given in nearly every loot-box, but usually at only one item in each box (out of the five total items given in each loot-box).

Category 3 content includes things like high-powered characters, elaborate costumes, and other highly sought-after content. This is where the gambling may be implicated. As category 3 content generally provides players with the largest competitive advantage, items in this category are highly coveted. While each loot-box does contain some content, players must purchase a large number of loot-boxes to obtain the specific upgrade that they want. Gamers have even reported spending upwards of $90 on loot-boxes and still failing to unlock certain items.

This arrangement “rewards” players for opening a lucky box. Imagine, as an analogy, a casino that charges poker players an entry fee of $500 dollars. Under the loot-box model, industry leaders would argue against a “gambling” classification for a casino which gives a losing poker player a stuffed-animal “reward” for participating while giving a winning player a gold bar. The losing player still gets “something,” but it defies logic to say that this “something” precludes the poker game from being considered gambling.

The industry naturally wants to keep its income stream strong, and profits from loot-boxes are healthy. But the gambling comparisons are strong, and legislatures may want to consider direct action to avoid these possibly predatory practices.

*Disclaimer: The Colorado Technology Law Journal Blog contains the personal opinions of its authors and hosts, and do not necessarily reflect the official position of CTLJ.