adminLoot boxes, skin betting, and psychologically optimized incentives for purchases are increasingly turning video games into gambling. Consumer organizations are warning of exploitation, and research is revealing clear risk factors.
Game mechanics in video games are under enormous pressure
European consumer associations from 18 countries support a new report by the Norwegian Consumer Council (NCC), which describes the sale and presentation of loot boxes as exploitative and manipulative. The authors call on national and European authorities to ban misleading designs, strengthen protections for minors, and ensure greater transparency.
How loot boxes work and why they simulate gambling
Finn Myrstad, Director of Digital Policy at the NCC, sums up the criticism bluntly. He says:
“The sale and presentation of loot boxes often involves exploiting consumers through predatory mechanisms, encouraging addiction, targeting vulnerable groups of consumers, and more.”
Loot boxes are digital surprises with randomized contents. Players only discover what’s inside after purchasing. The principle is similar to gambling, as the bet is placed before the outcome is known, and chance plays a role.
Content can significantly alter gameplay, such as powerful equipment, or be purely cosmetic. Monetization occurs through both real money and a complex in-game currency that can obscure actual costs. Critics view this as a deliberate exploitation of cognitive biases, such as loss aversion, and a targeted approach to minors.
Psychological levers: from loss aversion to herd effect
According to industry observers and researchers, the mobile and online gaming industry employs a wide range of behavioral tactics. These include limited-time offers during so-called “hot deals,” the threat of revocation of existing bonuses, and social comparison incentives that make others’ spending visible.
One developer reported artificially created bottleneck levels that were virtually impossible to overcome without additional purchases. In another case, the supposedly random generator was manipulated so that players would receive large wins early in the game, then their chances of winning would become smaller to motivate them to make further purchases. This mechanic generates variable rewards, which are considered particularly addictive.
A billion-dollar market and the role of whales
The video game industry has turned microtransactions into a central source of revenue. Market research and analysis estimate annual revenue from games with mechanics like loot boxes at tens of billions of dollars. A significant portion of this revenue accrues to a small but particularly high-earning group known in the industry as “whales.”
The goal of many free-to-play models is to convert a portion of the large player base into these premium payers. VIP programs and data-driven identification of potential payers are important components of this process.
Several studies show that loot boxes appear in many popular games and that almost all young people between the ages of 12 and 17 have encountered such systems.
According to the survey, the average monthly spending by teenagers and young adults on loot boxes is in the double-digits. Particularly problematic is the finding that purchasing loot boxes increases the likelihood of developing gaming addiction later in life.
Skin betting in competitive games is considered a reliable predictor of gaming addiction. Parents also report their children’s control issues, hidden spending, and frustration when progress is limited without purchases.
Examples show proximity to gambling
Several isolated cases illustrate this mechanic. A player invested several thousand pounds in a slot app without any real payouts and went into debt. A data analyst spent five-figure sums over the years on player packages for a football match.
Both drew parallels with fixed-odds terminals and described typical patterns, such as loss of control, a desire for rare items, and a disregard for actual costs. These reports emphasize that, in certain situations, the allure of games can trigger behavior similar to traditional gambling.
Regulatory debate in Europe
The legal situation is mixed. In 2018, Belgium ruled that loot boxes violated its gambling laws. As a result, virtual currency was removed from the FIFA football series and packs containing earned rewards were limited.
In 2019, the Netherlands imposed a multi-million dollar fine on the publisher, but in 2022, a court overturned the fine. The court argued that while loot boxes added an element of randomness to the Ultimate Team mode, they were only part of a comprehensive gameplay experience that required skill.
In the UK, a government consultation identified a link between loot boxes and harm, but found no evidence of causation, and initially relied on industry self-regulation.
Industry positions and individual course adjustments
Companies have responded in different ways. EA’s CEO compared loot boxes to Kinder Surprise eggs and called their use in the FIFA football game ethical and engaging. EA emphasizes freedom of choice and points to parental controls and management tools that can restrict or prohibit purchases.
Some providers have increased transparency. For example, in 2019, players of a popular battle royale game were able to preview the contents of some boxes.
UK industry association Ukie recognises clear and easy-to-use parental controls for screen time, in-game purchases, online interactions and age-appropriate content.
From gaming disorder to preventive approaches
The World Health Organization included gaming disorder in the International Classification of Diseases in 2018. The American standard, DSM-5-TR, classifies video game addiction as a disorder requiring further study. It is estimated that a small but significant percentage of the population suffers from this disorder.
Warning signs include persistent gaming, withdrawal symptoms, development of tolerance, loss of control, declining performance at school and work, lying about gaming time, and gaming to regulate emotions.
Psychotherapeutic methods such as cognitive behavioral therapy, group therapy, and family counseling are considered effective. Preventative measures include setting clear time limits, placing devices away from the bedroom, alternative activities, family media plans, and consistent use of parental controls, including spending limits and password protection.
What government and industry should do now
With over 2.8 billion regular gamers and an industry larger than the film and music industries combined, consumer groups are calling for priority regulation. The NCC report, “INSERT COIN: How the Gaming Industry Exploits Consumers with Loot Boxes,” identifies specific problem areas.
He criticizes misleading design and marketing, confusing virtual currencies, and the deliberate targeting of minors. Finn Myrstad emphasizes the need for action. He says:
“Games manipulate consumers into spending large sums of money through aggressive marketing, exploiting cognitive biases, and misleading probabilities.”
The authorities and the industry must take responsibility and provide a safe environment for players.
