In the past decade, “loot boxes” have become increasingly prevalent in the world of video games. They allow a player to use real money to buy randomized virtual items. Players purchase loot boxes hoping to acquire in-game items – some of which are purely cosmetic, such as a new outfit for a character, while others contain items that affect gameplay, such as weapons or unlockable players. While some see loot boxes as harmless fun, others argue that they are a form of gambling that can lead to addiction and financial exploitation. In response to these growing concerns, and with an eye towards protecting consumers, the European Parliament voted last month to adopt the recommendations proposed in a report that was commissioned to explore the effects of loot boxes.
The report called on the commission to critically analyze how loot boxes are sold, emphasizing the protection of minors. The report included a call for standardized disclosure rules across the European Union, providing clear information about the content of games, as well as systems that help parents understand and control how much time and money their children spend on games. This proposal, dubbed the Pan European Game Information (PEGI) age rating system, was highlighted as an idea that could deliver more transparent information about the content, target age group, and in-game purchase options to consumers. Other recommended actions included prioritizing data protection, improving the gender imbalance in the industry’s workforce, and making it easier for consumers to cancel a subscription. Additionally, perhaps with an eye towards maintaining healthy relationships with video game producers, the Parliament also made a point to recognize the value of the video games sector and called for the creation of a new annual European online video game award.
This is not the first European effort at cracking down on loot boxes. In 2018, the Belgian Gaming Commission classified loot boxes as a form of gambling. The commission determined that loot boxes met the definition of a game of chance, as “there is a game element [where] a bet can lead to profit or loss and chance has a role in the game.” This classification made games that included loot boxes illegal under Belgian gambling law. In response to the law, companies such as Nintendo and Activision announced that certain games would no longer be released in Belgium. However, a study in 2022 suggested that the law was not being enforced, with loot boxes remaining very prevalent in Belgian video game releases. It is unclear if this non-enforcement stems from a backroom deal with certain game developers or is a product of difficulties enforcing a pioneering law. Following Belgium’s decision, other European countries, including the Netherlands, Norway, and the United Kingdom, began investigating the regulation of loot boxes. In 2019, the Netherlands Gaming Authority declared that some loot boxes violated its gambling laws, specifically those that offered a prize that could be traded or sold outside of the game. As a result, several popular games, including FIFA, were forced to remove their loot boxes from sale in the country.
While there is currently no uniform approach to regulating loot boxes in the EU, the European Parliament’s resolution appears to be an important step toward developing standardized regulations that protect vulnerable consumers. What the regulations ultimately look like will likely depend on what further research shows about the effects of the loot boxes. One regulation that has been proposed is a requirement that games disclose the odds of receiving certain items in loot boxes. Disclosure would both allow players to make more informed decisions about whether or not to purchase a loot box and could also help to prevent addiction and exploitation. As the debate around loot boxes continues to unfold, one thing that is clear is that the EU and its member states are committed to protecting consumers from the potential harms of these virtual items.