The Psychology of Loot Boxes

The gaming and gambling industries have converged, borrowing sophisticated techniques from each other to engage and profit from players – now games are increasingly monetized and gambling is more game-like.

It is important for clinicians to understand the characteristics of gambling that lend themselves to gaming, including the rise in loot boxes, and their associated risk factors with compulsive gaming disorder and/or problem gambling.

What are loot boxes?

loot boxes

Loot boxes are virtual items in video games that contain randomized rewards. They are one such technique borrowed from the gambling world that has become profitable for the gaming industry. Players can either buy loot boxes and/or earn them during the game.

Items may be exclusive to loot box wins (with limited availability) and therefore remain unattainable within other aspects of the game. They often vary in rarity from common items to legendary ones. Coupled with the limited availability of some items, winning a legendary reward can come with a sense of prestige and/or the ability to resell them for large sums of money. Some games disclose the loot box odds, while others do not.

Loot box prevalence

mobile gaming

Loot boxes are prevalent in most modern games (Zendle et al., 2020) including:

58% of all video games on the Google Play store

59% of top iPhone games

36% of games on the Steam store

1% of Android games aged 12+

9% of iPhone games aged 12+.

Loot boxes are in 49% of games PEGI-rated as suitable for children aged 7+ and 93% of games rated suitable for children aged 12+.

How loot boxes are designed

loot box design

Loot box design is psychologically similar to the design of slot machines and gambling products (Drummond & Sauer, 2018). When a player purchases a loot box, they are risking real money for the chance of winning a prize or reward that is valuable to them.

Common features shared by loot boxes and slot machines include “random distribution of prizes, variable value of the prizes, near-miss features, plus visual and sound cues associated with participation and reward. These features are well known to trigger urges to play along with increased excitement and faster play.” (Whyte, 2019).

Loot boxes are designed to provide repeated cycles of uncertainty, anticipation and feedback, and the odds are just enough to keep gamers going (similar to feedback loops that regulate human behavior).

It is also important to note technology features distinct to loot boxes (as a contrast to traditional slot machines). Some loot boxes are intentionally developed with manipulative mechanisms (King et al., 2019) to exploit a player’s psychological vulnerabilities and reinforce their need to spend money.

These strategies involve, for example, searching the company’s player database to identify highly active players and then developing monetized in-game content tailored specifically to those players’ unique interests and preferences (e.g. game items that match the color of their favorite sports team). These idiosyncratic preferences are gathered in various ways, including using information gathered from players’ linked social network pages (Hodapp, 2015).

Another example is from the games company, Yodo1, whereby the company developed an artificial intelligence algorithm to predict, identify and hunt down “whales” – individual gamers who will spend thousands of dollars on a single platform. Their CEO stated “the accuracy at picking potential whales after 14 days was about 87%”. (Handrahan, 2019).

How are loot boxes linked to gambling?

Loot boxes are a persuasive example of how the gaming industry has focused on identifying player motivations and idiosyncratic preferences and then leveraged them into innovative monetization schemes, including those that pose a risk for those vulnerable to gambling-like behavior.

Loot boxes evade gambling laws in most countries as paying real money to win online goods is not viewed as a form of monetary exchange (Rose, 2006). This leaves loot boxes and similar predatory game mechanics to be unregulated, which may expose vulnerable and/or at-risk populations.

Dangers of loot boxes

loot boxes gambling

Although the gaming industry claims that loot boxes are unproblematic, non-gambling activities, this claim is refuted by the evidence. Recent research by the GambleAware charity found “there is robust evidence that loot boxes are structurally and psychologically akin to gambling, with associations strongest amongst younger players.” (Close & Lloyd, 2021).

The research, carried out by the University of Wolverhampton and the University of Plymouth in the UK, found that:

93% of children regularly play games and 25-40% of them have made a loot box purchase

Around 5% of loot box purchasers spend more than around $100 per month (or the local equivalent)

Almost one third of these top 5% of spenders fall into the “problem gambler” category

12 out of 13 studies on the topic have established “unambiguous” connections to problem gambling behaviour

The higher the level of involvement in loot boxes, the higher the score on a measure of problem gambling symptomatology

The research concludes that “any risks and dangers associated with loot boxes are liable to affect specific demographics. Those particularly affected include males and younger gamers” and “those with lower educational attainment and lower levels of employment may be disproportionately affected.”

FIFA loot boxes

FIFA’s Ultimate Team is the most popular feature within the Electronic Arts FIFA video game. Fundamental to the game is the purchase of loot boxes. Gamers unlock random players to successfully build their team. The more packs opened, the higher probability of assembling a strong, all-star team to compete against others and win. Players can earn packs in-game or purchase them with real money.

This type of loot box is called “pay to win”. Items obtained provide an advantage when playing the game itself. The intrapersonal personality trait of competitiveness is a well-researched factor in gambling. Research shows that not only are more competitive individuals more likely to engage in gambling, but competitiveness is also a known risk factor for problem gambling. (Mowen et al., 2009; Parke et al., 2009).

This ties directly into loot box rewards, as these rewards may provide a competitive advantage and potentially strengthen the relationship between problem gambling, loot box spending and video game addiction. This is compounded by the effects of allowing pay to win, which may add additional value to loot box contents, further amplifying the effects of problem gambling. (Zendle et al., 2020).

Gaming Disorder Clinical Training

Given the concern “that gambling is now part of everyday life for children and young people” through video games (BBC News, 2021), understanding these predatory tactics will increase effectiveness at safeguarding the psychological and financial well-being of gamers.

Clinicians need to be equipped to deal with problematic gaming behavior when clients present with internet gaming disorder symptoms. Get started today by registering for INTENTA’s Gaming Disorder Clinical Training.

Want to try a free lesson?

Click the button below and register an account to gain immediate access to our lesson on the psychology of gaming.

Prefer the full 15 credit training?

Gain a comprehensive understanding of problematic and disordered gaming with practical strategies for treatment and prevention.

References

  1. BBC (2021). Loot boxes linked to problem gambling in new research. https://www.bbc.com/news/technology-56614281
  2. Close, James and Joanne Lloyd. (2021). Lifting the Lid on Loot-Boxes Chance-Based Purchases in Video Games and the Convergence of Gaming and Gambling. Report Commissioned by Gamble Aware. https://www.begambleaware.org/sites/default/files/2021-03/Gaming_and_Gambling_Report_Final.pdf
  3. Drummond, A., & Sauer, J. D. (2018). Video game loot boxes are psychologically akin to gambling. Nature Human Behaviour, 2(8), 530–532. https://doi.org/10.1038/s41562-018-0360-1
  4. Handrahan, M. (2019). Yodo1’s AI-driven whale hunt is a bad look for the games industry | Opinion. GamesIndustry.Biz. https://www.gamesindustry.biz/articles/2019-10-21-yodo1s-ai-driven-whale-hunt-is-a-bad-look-for-the-games-industry-opinion
  5. Hodapp, E. (2015). “We own you” – Confessions of an anonymous free to play producer. TouchAracade. https://toucharcade.com/2015/09/16/we-own-you-confessions-of-a-free-to-play-producer/
  6. INTENTA (2021) Gaming Disorder Clinical Training. https://intenta.digital/training/gaming-disorder-clinical-training/
  7. King, D. L., Delfabbro, P. H., Gainsbury, S. M., Dreier, M., Greer, N., & Billieux, J. (2019). Unfair play? Video games as exploitative monetized services: An examination of game patents from a consumer protection perspective. Computers in Human Behavior, 101, 131–143. https://doi.org/10.1016/j.chb.2019.07.017
  8. Mowen, J. C., Fang, X., & Scott, K. (2009). A hierarchical model approach for identifying the trait antecedents of general gambling propensity and of four gambling-related genres. Journal of Business Research, 62(12), 1262–1268. https://doi.org/10.1016/j.jbusres.2008.11.007
  9. Parke, A., Griffiths, M., & Irwing, P. (2009). Personality traits in pathological gambling: sensation seeking, deferment of gratification and competitiveness as risk factors. Addiction Research & Theory, 12(3), 201–212. https://doi.org/10.1080/1606635310001634500
  10. Rose, I. N. (2006). Gambling and the law®: An introduction to the law of internet gambling. UNLV Gaming Research & Review Journal, 10(1). https://digitalscholarship.unlv.edu/grrj/vol10/iss1/1
  11. Whyte, K. S. (2019). Statement of Keith S. Whyte, Executive Director, National Council on Problem Gambling Loot Boxes or Slot Machines? Similarities & Solutions From the Gambling Addiction Prevention Field U.S. Federal Trade Commission Workshop Inside the Game: Unlocking the Consumer Protection Issues Surrounding Loot Boxes. http://www.ncpgambling.org/wp-content/uploads/2019/08/NCPG-statement-on-loot-boxes-to-FTC_August-2019-.pdf
  12. Zendle, D., Meyer, R., Cairns, P., Waters, S., & Ballou, N. (2020). The prevalence of loot boxes in mobile and desktop games. Addiction. https://doi.org/10.1111/add.14973
  13. Zendle, D., & Cairns, P. (2019). Loot boxes are again linked to problem gambling: Results of a replication study. PLoS ONE, 14(3), e0213194. https://doi.org/10.1371/journal.pone.0213194

Subscribe to Trends & Insights

Enter your email to receive monthly trends, insights and resources on gaming and digital disorders.

asset

Subscribe to Trends & Insights

Enter your email to receive monthly trends, insights and resources on gaming and digital disorders.

MEMBER LOGIN
INTENTA

Get your free lesson

Enter your email to receive immediate access to Lesson One of our internationally-accredited Gaming Disorder Clinical Training.