Are microtransactions in games a form of gambling?
“If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.”
What are microtransactions? They are virtual in-game purchases players can make in exchange for items that can either help them advance in the game or for purely cosmetic reasons. For example, unlocking certain features or content, extra levels, extra costumes and, the most controversial of them all, loot boxes. They can cost less than a pound but the problem is that they can really add up without you realising it.
Microtransactions are making headlines in the mainstream press due to the uproar caused when EA pre-released Stars Wars Battlefront 2, and a Redditor posted a comment that he had to spend $80 to unlock Darth Vader. The game itself was not free to play and cost between $60 – $80 making this cost unpopular and somewhat unjustified. In response to EA’s claim that you could unlock popular characters by playing the game and that you didn’t have to pay, a Redditor compiled a spreadsheet that showed it would take forty hours to unlock a single popular character. Gamers were angry that they were being ripped off and forced to pay for something that they considered should be part of the game, in other words, “Pay to play”.
The most controversial microtransactions are loot boxes. Loot boxes are an in-game box of randomly selected goodies that players purchase and receive at random intervals. Some loot boxes contain purely cosmetic items and some improve in-game performance, but you only find out what you have bought when you open the box. The box could include items you don’t want or ones you have already received but you will always get something. This encourages you to spend more money to increase your chances of winning something good or getting what you want next time.
Loot boxes are based on American psychologist B.F.Skinner’s ‘variable ratio schedule’. Skinner experimented on rats and created a room where rats were given food if they pushed a button. He found that the rats were more likely to do something for a reward. They pushed the button for food more than the same button that gave them an electric shock. He also determined that the rats could be trained to push the button if the reward was received at random times rather than consistently. The randomness of loot boxes make you think that sooner or later you are going to get that item you desperately want and this is, in my opinion, gambling.
Are microtransactions in games targeted at children, a disguised form of gambling? With loot boxes children would not recognise that they are gambling. In an article featured in the video game news site ‘Kotaku’, Ethan Gach (2017) outlines the tragic story of a gamer called Kensgolds who started spending money on microtransactions when he was thirteen. He started making purchases worth $20 and as he got older he said $100 didn’t seem like that much to pay. He was effectively conditioned to believe spending was a necessity and he was desensitised to the costs. Stories like this show how game mechanics can plant the seed for children to become addicted not only to video games but also to gambling, as they normalise the gambling process. The children will keep spending more money on the chance that they will win the item that they want and, in my view, this makes it gambling.
Are games designers knowingly targeting vulnerable people? In his article in the Guardian, Alex Hearn (2017) says the system of loot boxes are “a sort of weaponised behavioural psychology, perfectly pitched to exploit all the cognitive weaknesses that make people so susceptible to addiction and compulsion” because players can’t buy the particular items they want. They have to purchase loot boxes, with random items, with either their own money or in-game currency without any guarantee and no control within the game of getting the item they want. Loot boxes prey on the same beliefs in the same way as a casino does: your bad luck is going to end or the next win will pay for all you’ve lost so just give it one more try.
Jamie Madigan, video game psychologist and author, suspects that game publishers have done their research and have found that randomised loot-drop systems keep people playing longer and spending more if they rely on chance rather than just paying for something up-front. Lawrence (2017) This shows an awareness of game publishers as to the potential addiction they may be facilitating through adopting these game techniques.
Dr Mark Griffiths, Professor of Behavioural Addiction at Nottingham Trent University researched whether RuneScape’s Squeal of Fortune and Treasure Hunter features were gambling. He found that they were because the bonds won in the game have value outside of the game which meets the criteria of the Gambling Act 2005.
Dirk Bosmans from the European video game rating organisation PEGI said “a loot crate system does not trigger the gambling content descriptor” due to the fact that a player is always guaranteed to receive some game content for their purchase, gambling online and at a casino doesn’t provide the same guarantee. He said whether microtransactions are gambling is something that should be decided by national gambling laws and not PEGI. This raises the question, is it reasonable to expect game companies to regulate themselves and limit profit to comply with laws that they don’t believe extend to them. (Hood, 2017)
Patricia Vance, Head of the Entertainment Software Rating Board (ESRB), a non-profit company that rates video games for age-appropriateness, also found that loot boxes aren’t gambling. She said they are more comparable to baseball cards, “where there is an element of surprise and you always get something.” (Crecente, 2018) Writing for kotaku.com, Heather Alexandra (2017) says she finds the ESRB’s assessment “absurd” because “just because you get something, doesn’t mean you aren’t taking a gamble”. They have recently decided to put on boxes and online descriptors that the game has in-game purchases but this won’t impact the games rating.
Ukie, the trade body for the UK’s games and interactive entertainment industry says microtransactions aren’t gambling. The Gambling Commission agrees because the items contained in them cannot be exchanged for real life money but as soon as a third-party website gets involved they would then be considered gambling.
There are illegal third-party sites where you can exchange in-game items or games currency for money. Because some items have value and can be traded for money outside of the game, I feel that the ESRB and Ukie could put a warning on games with microtransactions that they contain gambling in the same way as they put warnings for violence, sexual content etc. due to the fact that in my opinion, buying loot boxes can be perceived as gambling
In the UK, online gambling is licensed under the Gambling Act 2005. The UK also has a gambling commission to enforce these rules. By comparison, game companies with microtransactions aren’t regulated.
Certain countries have already taken action. China has passed a law that requires developers to publish the probability underlying loot boxes. (Grayson, 2017) Belgium’s Gaming Commission says it will investigate loot box purchases in video games and the Minister of Justice said that he wants the European Union to take action against games with loot boxes and in-game purchases. (Chalk, 2017). A Washington State Senator, introduced a bill in the Legislature which asks game developers and Washington to determine whether loot boxes and other game mechanics are a form of gambling that prey on children. He also would like developers to be more transparent and disclose the odds for chance-based microtransactions. (Wasserman, 2017) In Hawaii, Senators Chris Lee and Sean Quinlan said that they are looking at legislation that could prohibit access to people under 21. They want to stop the spread of predatory practices in online gaming and said that Star Wars Battlefront 2 is a “Star Wars-themed online casino designed to lure kids into spending money”. (Good, 2017) In the UK, an MP has asked questions in Parliament and there is also an online petition asking the government to “Adapt gambling laws to include gambling in video games which targets children”.
In his Mashable UK article, Adam Rosenberg (2017) argued that introducing legislation is a slippery slope and that games are protected under the US second amendment because they are works of art and questions where censorship will end. Wood (2017) also argues that the government have an ulterior motive in regulating games with microtransactions, which is to levy higher taxes similarly to cigarettes and alcohol and that it has nothing to do with protecting people from gambling.
I am building an endless runner game and I don’t have the money to make a game in the same way that AAA companies do. I know that in order to keep people playing I need to create a hook. Certain elements of my game depend on the addictiveness of it, however, I hope that I will be able to create a game with mechanics which make the game worth paying for. I also hope that the quality of the game produced will build up a loyal following for future games. I don’t wish to deploy manipulative tactics which push players towards their addiction.
If I have to use microtransactions to fund my game, I won’t misuse them. I will make sure the cost is both appropriate and transparent. The game will either cost little and have microtransactions available with real money or the game will cost some more and have no microtransactions. The gameplay will be good enough for the player to progress comfortably yet challenging through the game without the need to pay to progress more quickly.
I think that game publishers should implement some safeguards, for example, create technology to build in a mechanism that shows how much you have spent to date on microtransactions every time you make a purchase and only allow players to spend up to a certain amount. They should also build in a “wait” period so that you aren’t rushed and can reconsider your decision to buy. Finally, I do think microtransactions in games are gambling due to the uncertainty and chance aspect and the fact that items can be traded for money.
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Wood, C. (2017) Loot Boxes and Microtransactions May Be Bad, But Government Involvement Would Be Worse. Playstationlifestyle.net Available from: http://www.playstationlifestyle.net/2017/11/28/loot-boxes-microtransactions-may-bad-government-involvement-worse/ [Accessed 9 March 2018]
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