Loot Boxes in Europe – Is the EU banning them?

Steve Myatt
May 1, 2023
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You may have spent some hours playing your favorite video game only to stumble upon randomized redeemable boxes that promise you exciting in-game rewards. You randomly click on one of the boxes, eager to access the unknown item. These are called loot boxes.

Loot boxes are a randomized collection of virtual items in a game which can be won or purchased directly by a player. Loot boxes have become a controversy in the gaming industry.

From a study of loot boxes in internet games and their impact on users, the European government admitted that loot boxes resemble online gambling. Will loot boxes be banned in the EU? Let’s look at the future of loot boxes in the European Union.

How Loot Boxes Work

Loot boxes are virtual items in video games that are randomized to be redeemable by a player. It can offer exclusive features like a unique avatar, weapons and armor. Players can acquire loot boxes by making direct purchases with real-world money or by completing certain goals in the game.

The items obtained from the loot boxes are determined by chance. Some loot boxes guarantee a chance of landing a single item from a set of random boxes. Loot boxes can differ according to the game and the developer.

Loot boxes are proposed to generate passive revenue for games and developers. They also aim to keep players engaged and captivated by offering special items and rewards.

To many, loot boxes have been used by game developers and publishers to take advantage of players. However, to people like game developers and publishers, it has been a means to cumber the high and increasing cost of game production and maintenance.

In research by Juniper in 2020, the video game industry reckoned $15 billion in revenue from loot boxes. According to the research, loot boxes are a source of revenue for game developers and publishers.

The Debate – Are Loot Boxes Legal in the UK?

Legality of loot boxes in the EU

Although loot boxes act as a source of revenue for game developers and publishers, there has been an increasing debate concerning them. According to reports, loot boxes have negatively impacted some video game players. It has constituted problem gambling due to the in-game purchases.

There have been a lot of concerns that loot boxes may expose children and young adults to gambling. The reason is that loot boxes involve random luck for players to access certain content, making it a game of luck or chance.

Players may want to make in-app purchases to enjoy their game experience, failing to realize their expenditure. The repetition of these practices may lead to addiction and problem gambling, especially in children and young adults, who constitute the most users. The potential harm that loot boxes have is a serious issue that game developers and regulators should address.

Recent Developments in the European Union 

There has been debate concerning the regulation of loot boxes as gambling products. According to a 2020 study, the European Parliament conceded loot boxes resembling gambling. 

According to the Belgium Gaming Commission in 2018, the in-game purchases satisfy the Belgian Gambling Act’s demands for ruling as games of chance. Enforcing the law has been difficult for Belgium due to a study indicating continued illegally purchased loot boxes.

In 2019, the Dutch Gambling Regulator (KSA) reprimanded Electronic Arts Inc. and Electronic Arts Swiss SARL (EA). This action was after discovering that a game of chance acquired the virtual players in the FIFA football game. From a final ruling by the Administrative Jurisdiction Division of the Council of State, the FIFA video game was favored, and no charges were taken.

As a result of the difference in the worldwide approach to the regulation of loot boxes, the European Parliament demanded a uniform approach to regulating loot boxes to safeguard children and young adults. The European Parliament also advised consumers to learn more about loot boxes before taking action.

The game developers were required to increase the disclosure requirements of loot boxes in favor of consumers.

The European Government also called for action in collecting data such as average in-app purchases, average time spent playing video games, and the general gaming encounter. This data was to be collected annually.

The Future of Loot Boxes in the European Union

The potential outcome of current regulations efforts, such as the prohibition of particular types of loot boxes, can have significant impacts on the gaming industry:

  • Game publishers and developers depend on loot boxes as a source of income. Prohibiting loot boxes can lead to a decrease in revenue received by them. As a result, there may be different payment systems, such as subscription fees and on-time game purchases.
  • Players can have a better game experience from the increased disclosure requirements from developers. Players can have transparency about the likelihood of getting particular items in the loot boxes.

However, the effectiveness of the regulations can be limited since the gaming industry is on a global basis.

The regulations of loot boxes may have significant impacts on the players and the gaming industry:

  • The prohibition of loot boxes can lead to a decrease in revenue. Game developers and publishers relying on the income from loot boxes in-game purchases can be affected. They may need to create new revenue sources, such as in-game advertisements and one-time purchases.
  • Players’ trust and satisfaction can improve from the increased disclosure requirements, causing more in-game purchases from additional users. In addition, increased awareness of the odds of acquiring items from the loot boxes will reduce the total players’ expenditure.
  • By banning loot boxes, players can have fair gameplay, regardless of financial class. It could also reduce spending, especially among children and young adults.

However, the regulation of loot boxes may also negatively impact game players. The prohibition of loot boxes could lead to an increase in game prices and a decreased game quality. Games can feel monotonous due to increased disclosure requirements when players recognise the low odds of acquiring items from the loot boxes.

Next Steps

Loot boxes generate revenue for game developers and publishers and are intended to keep players engaged. However, due to loot boxes’ gambling-like features, the European Parliament enforced some regulations to safeguard children and young adults.

Banning loot boxes can impact both the game developers and players. Despite the efforts of the European Union to safeguard game players, it is difficult to determine the future of loot boxes in the European Union. The future of loot boxes depends on the game developers and the players.

Last updated on May 16th, 2023 at 06:29 am

Author Steve Myatt

Steve is the founder of Gamblers Cafe. He came up with the idea in 2022 and has been providing insights found herein. Having been in the gambling industry for over 5 years, he uses this opportunity to make the industry safe by assessing casinos and recommending the best ones.