Video games as a form of entertainment media have seen more than their share of debate and controversy. The witch hunts that U.S. Senator Joe Lieberman formed in the 90s surrounding video game violence come readily to mind. Former lawyer and full-time professional crackpot Jack Thompson also raked video games through the coals. The less said about him the better because, again, he’s a crackpot. Video games have seen their share of legal issues as well. The Nintendo price-fixing controversies of the late-80s and 90s stand as prime examples.
Included among the controversies surrounding video games is last year’s CS:GO gambling economy controversy. Two YouTubers, Thomas “ProSyndicate” Cassell and Trevor “TmarTN” Martin, owned a website dedicated to gambling weapon skins in CS:GO. The crux of the controversy centered on their failure to disclose their ownership in the site while they promoted it on their YouTube channels. They were ultimately not brought up on charges or fined by the FTC. But the fallout of the controversy focused attention to CS:GO’s use for non-regulated gambling purposes and how kids are exposed to it.
The sudden glut of games with loot boxes included in them has opened up the gambling debate again. The developers of games like Middle-Earth: Shadow of War, Forza Motorsport 7, and Star Wars Battlefront II have introduced loot box systems into their new or upcoming games. Each of the developers responsible has been lambasted for adding loot boxes to their games.
I’ve written about loot boxes before, so I won’t summarize them too much here. Many people – myself included – have come to consider loot boxes as a gambling mechanic. Players are encouraged to spend real-world money to purchase loot boxes on the chance that a highly coveted item can be “won”. There are also those who disagree, correctly arguing that there is no element of loss with loot boxes. Even if a loot box does not contain something you desire, it does contain something that the game deems has some value. The discussions on this topic between the two groups have been spirited.
Some in the group who feel loot boxes are a form of gambling felt the need to dial up the heat. Many calls to classify loot boxes as gambling have made their way to the Entertainment Software Rating Board (ESRB). As an independent body that gives games movie-like based on content and gameplay, it was hoped that the ESRB could settle the issue. They have, but not in the way some were expecting.
“ESRB does not consider loot boxes to be gambling,” a spokesperson from the ESRB said to Kotaku via e-mail. “While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want). We think of it as a similar principle to collectible card games: Sometimes you’ll open a pack and get a brand new holographic card you’ve had your eye on for a while. But other times you’ll end up with a pack of cards you already have.”
Lest anyone think that the ESRB is alone in this belief, website WCCFTech asked the Pan European Game Information (PEGI) board if they considered loot boxes to be gambling. Their response was similar in a way.
“In short, our approach is similar to that of ESRB (I think all rating boards do, USK in Germany as well),” PEGI Operations Director Dirk Bosmans said. “The main reason for this is that we cannot define what constitutes gambling. That is the responsibility of a national gambling commission. Our gambling content descriptor is given to games that simulate or teach gambling as it’s done in real life in casinos, racetracks, etc. If a gambling commission would state that loot boxes are a form of gambling, then we would have to adjust our criteria to that.”
At its face, the ESRB and PEGI are not wrong. When one typically thinks of traditional gambling, thoughts of roulette tables, slot machines, and lottery tickets come to mind. People bet money by buying into a table, popping a coin in the machine, or picking six “lucky” numbers. There is a potential reward, but oftentimes players turn up blank. Money was spent on the possibility of a reward, and the risk of netting nothing was a cost of gambling. Loot boxes always contain at least something. Even if it’s unwanted, it does hold some theoretical value. Therefore, it can’t be construed as gambling in the classical sense.
But many game developers are very familiar with the concept of the variable ratio schedule. It’s a form of Operant Conditioning where responses are reinforced after an unpredictable number of responses. Noted psychologist B.F. Skinner pioneered much of the research into operant conditioning in the 40s and 50s. Explaining all his research would take up way too much time and space; I’d like to keep this article’s word count under a billion.
Without getting too wrapped up in psychology and Skinner’s Operant Conditioning research, I’ll give you a real-world example. When I played World of Warcraft, I wasn’t extremely focused on end-game content. Yes, I would raid on the weekends with my guild, but the bulk of my gaming time was spent mount farming. I spent YEARS running Tempest Keep, Onyxia’s Lair, and several other locales in the hope that fortune and the RNG Gods would smile upon me and grant me a mount. The mounts only had a 1% chance to drop, so the odds were very much against me. But one day, after two years of farming Karazhan and getting really tired of it, I finally got my Fiery Warhorse. Emboldened, I started to farm with more vigor. I mean, if one dropped, surely more will follow.
That is the variable ratio schedule at work in gaming. Games that reinforce certain behaviors using the variable ratio schedule are called “Skinner Boxes.” The article about Operant Conditioning I linked two paragraphs ago will do a way better job than I will in explaining Skinner Boxes. All anyone needs to know is that Skinner Box games are effective.
Overwatch players experience it when they level up and are reward with a loot crate. One of the first crates I opened in Overwatch contained a legendary skin for Kenji. After that, I wanted to get more loot boxes. I never bought any; I chose to grind levels to get them. But many people could be coerced into buying some just for the thrill of opening one and getting something they wanted. It’s something game developers know players crave. They actively use the variable ratio schedule to entice us into more loot box purchases.
Mentioning World of Warcraft and Overwatch as examples of variable ratio scheduling is not a coincidence. Blizzard Entertainment has made a fortune with Skinner Box games. In World of Warcraft, variable ratio scheduling keeps people like me paying the monthly subscription, logging on, and playing older content willingly. Overwatch proved that loot boxes can be a very lucrative way to make money after the sale. When the ESRB mentioned collectible card games (CCG) in its example of how loot boxes aren’t gambling, they might as well have named Hearthstone as the example. Blizzard’s (CCG) is free-to-play, but card packs are separate purchases and exhibit all the hallmarks of a loot box. Blizzard has been so successful with loot boxes that they added them Heroes of the Storm, their free-to-play MOBA.
Guess who else also understands the variable ratio schedule and its place in gambling? Casinos. All of the slot machines on the casino floor offer different ways to entice people into gambling their life away. The variable ratio schedule is honed to a razor-sharp edge in slot machines. It’s a method video game developers and other tech industries want to emulate. And they do.
The distinction between slot machines and loot boxes is obvious. Even if an Overwatch loot box only contains emotes and sprays, the player received something. It may not be desired, but they “won” it. Slots don’t have that benefit. Players either win big or go home broke. There’s no reward. But the psychological parallels are there. Both slot machines and loot boxes entice players with possibilities. Both employ variable ratio schedules. And they both depend on those variable ratio schedules to keep players spending.
Skinner Box tactics are used on slot machines. A person puts money in, pulls a lever, and either wins more money or loses their money. The machines are rigged so that they pay out juuuuuust enough to entice people to keep playing.
Skinner Box tactics are used in video games. A player uses real-world money to buy the virtual currency needed to purchase loot boxes. When the loot box is opened, the player either earns coveted items or filler deemed worthless to them. The loot boxes are rigged so that they give juuuuuust enough rewards to entice people to keep buying.
In both cases, people are using real-world money in an attempt to win something they covet. In both cases, the same manipulative techniques are used to coax more money out of the players’ pockets. Everyone recognizes playing the slots as gambling. The ESRB and PEGI have determined that buying loot boxes is not gambling.
Will it always stay that way? Not really. PEGI’s Bosmans did mention that the topic could be revisited. The main argument against calling loot boxes gambling is that neither the ESRB nor PEGI are willing to define what gambling is outside of established rules. But say the Nevada Gaming Control Board were to review loot boxes and determine they were a form of gambling. That could make both the ESRB and PEGI reconsider their stance. Is that likely? Not really. I’m sure that the NGCB has better things to worry about than looking at pretend boxes that contain fake goods.
As loot boxes grow in prevalence, however, the chances of the topic being revisited will grow. Personally, I’ll leave that topic on the back burner and focus on more important things. Like how loot boxes are shitty money grabs from greedy-ass video game publishers. You know, the usual.
