you would be hard pressed to find a game that doesn’t include any kind of microtransactions these days, especially in mobile games. It just makes sense for gaming companies – a hugely lucrative source of revenue, the microtransactions market was worth $60 billion in 2021 and is expected to be worth $106 billion by 2026.
Usually offered as in-game collectibles, currency, or randomized loot boxes, microtransactions are now better received than they were a few years ago. Loot boxes, which allow players to receive random in-game rewards in exchange for real money, have been discredited for a while and are now increasingly controlled by the government.
Loot boxes have become a problem because they encourage spending real money for a miniscule chance to get hold of valuable in-game items, usually leaving players with nothing to show but the desire to continue betting for better items. Companies have been known to employ predatory sales tactics to sell loot boxes, thereby giving minors a chance to gamble. Despite Electronic Arts (EA) claim that loot boxes are not gambling, and are in fact “surprise mechanisms,” several studies have shown a link between loot boxes and gambling addiction.
Redemption of red tape
When Belgium banned loot boxes in 2018, it seemed that the first domino had fallen and further regulation from other countries would soon follow. Subsequent response, however, has been slow, despite countries like the UK agreeing that loot boxes are an issue that needs to be addressed.
One of the biggest hurdles for countries trying to regulate loot boxes is that they fall short of their current definitions of what gambling is, allowing companies to offer them and continue to operate outside of traditional gambling rules.
The Netherlands, following in the footsteps of the Belgian ban, also tried to get the gears moving by fining Electronic Arts in 2019 for the inclusion of loot boxes in its popular FIFA franchise. This fine was reversed earlier this year after an appeal.
However, EA couldn’t celebrate its victory for long as the Netherlands has now pushed for updating its legal definition of gambling to ensure better regulation of loot boxes. It remains to be seen whether this will result in an outright ban, or lead to EA requiring a gambling license and all associated regulations. If it happens, it’s likely that EA will simply remove the offending loot boxes from games sold in the Netherlands, similar to its response to the ban in Belgium.