Who we are

Dr. David Zendle

Lecturer in Computer Science, York St. John University
Lead author of four papers on loot boxes and problem gambling, including Video game loot boxes are linked to problem gambling: Results of a large-scale survey[1]

The author was invited to deliver a report on their research as oral testimony to a special hearing of the Australian Senate’s Standing Committees on Environment and Communications[2].
The author’s research is repeatedly cited in the Australian Senate’s report on loot boxes[3].
The author’s research is currently being used to determine loot box policy in the Netherlands.

Lead author of only paper in existence on links between loot boxes and problem gambling in adolescents
Expert on effects of loot boxes

Dr. Paul Cairns

Reader in Human-Computer Interaction, University of York
Internationally leading researcher into the experience of playing digital games
Author of over 150 articles in Human-Computer Interaction, which have more than 6,000 citations
Author of two textbooks on research methods and statistics

Executive Summary

Loot boxes are enormously profitable and very widespread.
Loot boxes share key similarities with gambling activities
Similarities between loot boxes and gambling have led researchers to theorise that loot boxes might cause problem gambling in gamers
Our research reveals that loot box spending is linked to problem gambling in adults
Our research reveals that loot box spending is linked to problem gambling in adolescents
Our research suggests that loot boxes either literally cause problem gambling, or they exploit problem gambling amongst gamers to generate massive profits.
We believe that regulation of loot boxes is appropriate.

Introduction

We are pleased to give evidence on the topic of loot boxes to the Committee. We are well-placed to do so as the authors of the only large-scale study in existence regarding the effects of loot boxes. We believe that an important link exists between loot boxes and problem gambling, and that loot boxes warrant some form of regulation.

We provide a point-by-point expansion of our executive summary below.

1. Loot boxes are enormously profitable and very widespread.

In 2018 alone, loot boxes are estimated to have generated in the region of $30 billion worldwide for the video game industry [4].
The loot box system in FIFA Ultimate Team alone generates $800 million per year [5]
31% of 11-16 year olds in the UK have been exposed to loot boxes according to the UK Gambling Commission’s Young People & Gambling 2018 report [6].

2. Loot boxes share key similarities with gambling activities

There are well-known features of gambling activities that psychologically separate them from other behaviours, as detailed in [7].
In [8], researchers analysed 22 games with loot boxes. They found that 10 of these games fulfilled all of these psychological criteria for gambling, and many more fulfilled almost all of these criteria.
They concluded that many loot boxes were ‘psychologically akin’ to gambling.
Concerns of similarities between loot boxes and gambling have been repeatedly voiced in the academic literature (e.g. [9]–[11])

3. Similarities between loot boxes and gambling have led researchers to theorise that loot boxes might cause problem gambling in gamers

Problem gamblers are individuals whose spending on gambling is so excessive and disordered that it causes them significant problems in their personal and professional lives. Problem gambling Problem gambling is linked to factors such as depression, anxiety, bankruptcy, and suicide [12]–[14].
Because loot boxes are so like gambling, there is concern that exposure to loot boxes in video games might lead to problem gambling amongst gamers.
There is particular concern that loot boxes might lead to the development of problem gambling in children – as noted in [8], “Of those games containing loot boxes, 100% allow for (if not encourage) underage players to engage with [loot boxes”.

4. Our research reveals that loot box spending is linked to problem gambling in adults

We are the authors of Video game loot boxes are linked to problem gambling: Results of a large-scale survey, available at [1]
This large-scale study (n=7,422) found important links between loot box spending and problem gambling. The more severe gamers’ problem gambling was, the more likely they were to spend large amounts of money on loot boxes.
These results strongly support the above claims that loot boxes are psychologically akin to gambling.
These results also suggest that there is a serious risk for loot boxes to cause gambling-related harm.
We have replicated this relationship in two further papers, including in a preregistered analysis. These are available in preprint form at [15] and [16].

5. Our research reveals that loot box spending is linked to problem gambling in adolescents

The research outlined above was all undertaken with adults (18+)
However, as mentioned earlier, there are no protections in place to stop adolescents buying loot boxes.
Adolescents are a particularly vulnerable group, and especially at risk of developing problem gambling.
We therefore ran a large-scale study (n=1155) on a group of adolescents aged 16-18 to investigate links between loot box spending and problem gambling
We found a link between loot box spending and problem gambling in adolescents as there were in adults: The more severe adolescents’ problem gambling was, the more likely they were to spend large amounts of money on loot boxes [17].
The link between loot box spending and problem gambling amongst adolescents was more than twice as strong as the relationship observed in adults (η2 = 0.120).
Qualitative analysis of text data showed that adolescents bought loot boxes for a variety of reasons. Several of these motivations were similar to common reasons for engaging in gambling.

6. Our research suggests that either loot boxes literally cause problem gambling, or they exploit problem gambling amongst gamers to generate massive profits.

Spending on loot boxes is linked to problem gambling in both adults and adolescents.
The more people spend on loot boxes, the worse their problem gambling is
This suggests one of two things:
Loot boxes may literally cause problem gambling.

This explanation makes sense because, as noted elsewhere in the academic literature, they are very similar in many ways to gambling, and therefore may provide a gateway to it.

Alternatively, people who are already problem gamblers may spend significantly more amounts of money on loot boxes

This makes sense too. Problem gambling is characterised by disordered and excessive spending on gambling. Since loot boxes are so similar to gambling, it would make sense for this disordered and excessive spending to transfer to loot boxes too.

However, in either case, we believe that social harm is occurring.

In one case, loot boxes are literally causing problem gambling amongst gamers.
In the other, they are allowing video game companies to exploit problem gambling amongst their customers (some of whom are adolescents) for massive monetary gain.

Effects amongst adolescents appear particularly worrying. This is due to both the strength of the relationship seen amongst this group, and their vulnerability.

7. We believe that regulation of loot boxes is appropriate

Loot box spending is linked to problem gambling in both adults and children
Whilst further research should be conducted to clarify the nature of this link, we believe there is sufficient evidence to strongly suggest that regulation of loot boxes is appropriate.
We recommend that games which contain loot boxes carry parental advisories.
We recommend that games which contain loot boxes also carry a descriptor outlining that the game itself features gambling content.
Given the strength and the importance of the relationship between loot box spending and problem gambling, we further recommend that serious consideration is given to restricting games with loot boxes to players of legal gambling age.

Dr. David Zendle

Lecturer in Computer Science

York St. John University, UK

Dr. Paul Cairns

Reader in Computer Science

University of York, UK

January 2019

References

[1] D. Zendle and P. Cairns, “Video game loot boxes are linked to problem gambling: Results of a large-scale survey,” PloS One, vol. 13, no. 11, p. e0206767, 2018.

[2] Environment and Communications References Committee, “Transcript of Environment and Communications References Committee : 17/09/2018 : Gaming microtransactions for chance based items,” 17-Sep-2018. [Online]. Available: https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22committees/commsen/6d50090a-f828-4a8f-a1a8-81bbada6a513/0000%22. [Accessed: 26-Oct-2018].

[3] Australian Senate Standing Committees on Environment and Communications, “Gaming micro-transactions for chance-based items,” 27-Nov-2018. [Online]. Available: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/Gamingmicro-transactions/Report. [Accessed: 14-Jan-2019].

[4] Juniper Research, “In-Game Gambling ~ The Next Cash Cow for Publishers,” Apr-2018. [Online]. Available: https://www.juniperresearch.com/document-library/white-papers/in-game-gambling-~-the-next-cash-cow. [Accessed: 15-Jul-2018].

[5] “EA’s Ultimate Team now worth $800 million annually,” GamesIndustry.biz. [Online]. Available: https://www.gamesindustry.biz/articles/2017-03-01-eas-ultimate-team-now-worth-USD800-million-annually. [Accessed: 02-Jan-2019].

[6] UK Gambling Commission, “Young People and Gambling: 2018 Report.” [Online]. Available: https://www.gamblingcommission.gov.uk/PDF/survey-data/Young-People-and-Gambling-2018-Report.pdf. [Accessed: 02-Jan-2019].

[7] M. Griffiths, Adolescent Gambling. Psychology Press, 1995.

[8] A. Drummond and J. D. Sauer, “Video game loot boxes are psychologically akin to gambling,” Nat. Hum. Behav., p. 1, Jun. 2018.

[9] M. D. Griffiths, “Is the buying of loot boxes in video games a form of gambling or gaming?,” Gaming Law Rev., vol. 22, no. 1, pp. 52–54, 2018.

[10] M. D. Griffiths, “Hot topics in gambling: gambling blocking apps, loot boxes, and’crypto-trading addiction’,” Online Gambl. Lawyer, vol. 17, no. 7, pp. 9–11, 2018.

[11] D. L. King and P. H. Delfabbro, “Predatory monetization schemes in video games (e.g. ‘loot boxes’) and internet gaming disorder,” Addiction, vol. 0, no. 0, Jun. 2018.

[12] S. C. Newman and A. H. Thompson, “A population-based study of the association between pathological gambling and attempted suicide,” Suicide Life. Threat. Behav., vol. 33, no. 1, pp. 80–87, 2003.

[13] F. K. Lorains, S. Cowlishaw, and S. A. Thomas, “Prevalence of comorbid disorders in problem and pathological gambling: Systematic review and meta-analysis of population surveys,” Addiction, vol. 106, no. 3, pp. 490–498, 2011.

[14] J. E. Grant, L. Schreiber, B. L. Odlaug, and S. W. Kim, “Pathological Gambling and Bankruptcy,” Compr. Psychiatry, vol. 51, no. 2, pp. 115–120, 2010.

[15] D. Zendle and P. Cairns, “Loot box spending in video games is still linked to problem gambling,” PsyArXiv, Aug. 2018.

[16] D. Zendle, C. McCall, H. Barnett, and P. Cairns, “Paying for loot boxes is linked to problem gambling, regardless of specific features like cash-out and pay-to-win: A preregistered investigation,” Oct. 2018.

[17] D. Zendle, R. Meyer, and H. Over, “Adolescents and loot boxes: Links with problem gambling and motivations for purchase.”