The DCMS Committee Says Loot Boxes Are "Games of Chance"

By Rich Stanton on at

Today saw the release of a report on 'Immersive and Addictive Technologies' by the House of Commons' Digital Culture Media and Sport (DCMS) committee. It touches on social media and various other topics briefly, but the focus here is video games and, in particular, loot boxes.

The committee sat over the summer and heard evidence from various academics, gamers and industry representatives. The members didn't always cover themselves in glory but, to be fair, they also produced some strong words for the various games industry representatives that gave evidence.

[W]e were struck by how difficult it was to get full and clear answers from some of the games and social media companies we spoke to and were disappointed by the manner in which some representatives engaged with the inquiry. We felt that some representatives demonstrated a lack of honesty and transparency in acknowledging what data is collected, how it is used and the psychological underpinning of how products are designed, and this made us question what these companies have to hide. It is unacceptable that companies with millions of users, many of them children, should be so ill-equipped to discuss the potential impacts of their products.

The report also circles around the question of gaming disorder and, while resisting the temptation to draw conclusions, does extrapolate from a study by Nottingham Trent university to make a somewhat irresponsible estimate of how many sufferers of 'gaming disorder' there are in the UK.

Dr Bowden-Jones told us that she is alarmed by much of the public rhetoric around there being an “‘epidemic’ of […] ‘gaming addiction’ because that is not an accurate reflection of prevalence, especially when compared to other addictions and behaviours.

We were also told that a large-scale cross-national study put the prevalence of disordered gaming at 0.3% to 1.0% of players.

The number of people in the UK who experience such significant problems with video gaming can therefore be estimated to be 96,000 to 320,000.

I especially like that it quotes Dr Bowden-Jones before going on to completely ignore her wise words. Ultimately this is a reflection of the lack of widespread research in this area but it is flimsy to suggest, based on evidence as thin as this, that the UK might have hundreds of thousands of gaming addicts.

Indeed this is the biggest problem with the DCMS's approach: the oral nature of the committee's work results in a report that seems to favour anecdote and assertion, while the little data there is doesn't support the wide-ranging conclusions being drawn from it. And the generalisations cut both ways: the DCMS might feel it's cutting through the crap when it comes to stuff like loot boxes in games aimed at children, but what it's doing is scapegoating one kind of microtransaction when the problem is much wider.

We recommend that loot boxes that contain the element of chance should not be sold to children playing games, and instead in-game credits should be earned through rewards won through playing the games. In the absence of research which proves that no harm is being done by exposing children to gambling through the purchasing of loot boxes then we believe the precautionary principle should apply and they are not permitted in games played by children until the evidence proves otherwise.

If only it had gone further: games aimed at children should not have any form of microtransaction, not least because of the overwhelming evidence that children have incomplete ideas about money. Loot boxes in general get short shrift, and the section of the report dealing with them ends up by advising the government to add 'gambling' labelling to games containing a particular kind (bought for real money, with randomised contents).

Loot box mechanics are integral to major games companies’ revenues and evidence that they facilitate profiting from problem gamblers should be of serious concern to the industry. We recommend that working through the PEGI Council and all other relevant channels, the UK Government advises PEGI to apply the existing ‘gambling’ content labelling, and corresponding age limits, to games containing loot boxes that can be purchased for real-world money and do not reveal their contents before purchase.

The 'Potential Harms of Loot Boxes' section of the report kind of summarises the DCMS's whole approach: it begins by noting that the evidence simply isn't there in the quantity and quality needed to draw any conclusions. Then it goes on to draw a bunch of conclusions based on oral evidence and drop an absolute megaton:

We consider loot boxes that can be bought with real-world money and do not reveal their contents in advance to be games of chance played for money’s worth. The Government should bring forward regulations under section 6 of the Gambling Act 2005 in the next parliamentary session to specify that loot boxes are a game of chance. If it determines not to regulate loot boxes under the Act at this time, the Government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money’s worth.

The gambling industry has been pushing for this conflation for years, because one of the faults in our regulatory system is that both gaming and gambling are handled by the same commission. But in the absence of evidence, this does not seem a sensible way to form public policy.

Nevertheless this report is a good thing, because its recommendations will help in the future with some of the problems the DCMS committee ran into this time. The loudest message is that we need much more in the way of high-quality studies, and that the industry itself has a responsibility here: for academics to produce worthwhile work on Fortnite or FIFA 19 in this context, they need access to some of the backend data these companies are swimming in.

With loot boxes, meanwhile, the committee has forced both industry and government to act. The former need to consider self-regulation of these microtransactions, and in particular the practice of targeting children, knowing that the DCMS now has this topic on its agenda. The government for its part needs to look at the topic and make an argument either way because, whatever the specifics may be, the statute book is decades behind the current games industry and any incoming regulations will have to deal with much more than the loot box examples given by the DCMS.

You can read the full report here.