Gareth Hughes: When gaming becomes gambling

Written By: - Date published: 6:15 am, December 6th, 2017 - 62 comments
Categories: capitalism - Tags: , , ,

Cross-posted from blog.greens.org.nz, Green MP Gareth Hughes writes:

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I was really looking forward to playing the new Star Wars: Battlefront 2 game. It looked pretty cool and I liked the first instalment. But when I checked out the reviews online, nobody was talking about the new game; they were debating if the “loot boxes” within the game constituted gambling or not.

In the last week, loot boxes have been defined or investigated as gambling by various regulators in the UK, Belgium, Australia, and Hawaii. Gambling? Gambling in a computer game children at my kid’s school were playing? Gambling in a game rated M, meaning that anyone could play?

Loot boxes are virtual boxes that contain randomised in-game content or upgrades. Games often include a way to bypass time-consuming ways to earn content or upgrades by charging players to open them, despite the fact that you knowing what you’re paying for.

There’s a legitimate argument (some would say a gripe) about paying for in-game content when you’ve already forked out to purchase the game. Loot boxes take this to a whole new level, randomising what you’re buying. When you open a loot box, you’re treated to an array of visual and audio stimuli, very similar to what you would see when winning on the pokie machines.

Loot boxes have opened up a debate about gaming fairness – paying money to get a competitive edge — but more importantly there is a debate whether loot boxes should be regulated by gambling agencies. A big concern is that these games are available to children vulnerable to the addictive consequences of gambling.

Belgium’s Gaming Commission has said “the mixing of money and addiction is gambling.” Koen Geens, who is Belgium’s Minister of Justice, also stated that “mixing gambling and gaming, especially at a young age, is dangerous for the mental health of the child.” Geens wants loot boxes banned not only in Belgium, but in Europe and abroad.

However, our Department of Internal Affairs says:

The Department considers ‘loot boxes’ as a marketing tactic within computer games that use psychology to reward players and encourage them to spend more on the game. While the exact contents of a loot box may be unknown at time of purchase, the payment of the charge does purchase a box. This does not appear to meet the definition of gambling.

You have to ask then if you sold an Instant Kiwi scratch game ticket in a box, could you skirt gambling laws, arguing you’re just selling boxes?

Whether you think loot boxes are gambling or not, I think this an important discussion we should be having. We need to make sure our rules around gambling are flexible enough to cope with changing technology.

At the very least, games containing loot boxes should include labels and further information warning parents and caregivers of the potential risks that lie just inside the box.

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62 comments on “Gareth Hughes: When gaming becomes gambling ”

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  1. cleangreen 1
    6 December 2017 at 6:58 am

    Excellent article Gareth,

    I am very happy you have targeted the “monetisation”or ‘gambling’ evolving of play games.

    It is another crude and vile showing of soft manipulation of the young and old public.

    Just another display of how we are being ‘manipulated’ into becomming ‘gamblers’ rather than loosing our sanity for less pressure in life.

    • greywarshark 1.1
      6 December 2017 at 12:08 pm

      Interesting point cleangreen – we are all becoming manipulated to gamble.

      At a shop I might be offered a card with an email/web address and if I give comments on the store I get ….or the possibility of a trip to Auckland!

      So often it will be a chance of something for my email. I say no thanks. And the winning temptation crops up often. I might feel that to be offered a special price on something would be a sure winner for me but turn down the other enticing offer.

  2. BM 2
    6 December 2017 at 7:10 am

    Christ, what nonsense.

    It’s no different to buying a kinder surprise or lego surprise bag.

    • cleangreen 2.1
      6 December 2017 at 7:36 am

      “soft manipulation of gambling I see it as”
      BM; – you are welcome to your bland dimissals here but someone needs to draw the line somewhere I feel, or at least bring the issue to light.

      We do know that studies are reported as showing that some media systems do ‘influence the mind’ of all viewers as they say movies and other programs do with scenes of extreme violence, and hence they hasve warning captions ahead of those progrms so should they have with these ‘soft gambling porn’ games.

      So how much is enough?

      • BM 2.1.1
        6 December 2017 at 7:54 am

        In-app purchases are how many app developers make their money.

        You get a free game and then the user can purchase additional features or add-ons if they want.

        It’s a win for everyone, people try the developers game/app at no cost and if the user likes it they buy stuff and the app developer makes money.

        • dv 2.1.1.1
          6 December 2017 at 8:01 am

          Yes an 8 year old ran up $500 in app purchases. She thought she was buying gold with game credit.
          Murky.

        • cleangreen 2.1.1.2
          6 December 2017 at 8:06 am

          Money is your god not others BM.
          Leave kids alone here.
          So as said; – you are welcome to your views but we/others don’t see money as our “god” or in other words we dont get hooked or “addicted “on chasing money as gambling addition is known as being “an addiction”.

          All of us do have other views, and that makes our society more vividly alive.

          • BM 2.1.1.2.1
            6 December 2017 at 8:10 am

            You think people should work for nothing? spend months/years creating stuff than give it away for free?

            • Incognito 2.1.1.2.1.1
              6 December 2017 at 8:25 am

              When are you going to charge for your contributions here on TS? Do you work for nothing and create these deep insights and gems of intellectual prowess for free? You could make money man!

            • cleangreen 2.1.1.2.1.2
              6 December 2017 at 8:25 am

              Everything you say has money threaded through it.

              You are suffering a delussion that money is really everything in life, but as said some dont think you way to place money ahead of life itself.

              Yes we all need to work for life and use money to sustain our live but you seem to be openning the door to every angler to “sqeeze a buck”.

              We dont want young minds to become addicted to money as you apparrently have become now.

              So we want less active monetry values placed on the gaming industry by using the intense systems gareth speaks about here.

              savenz on post 5 has some very good points also BM, worth a read.

              Merry Xmas; – enjoy your addition if you must.

              • Incognito …
                6 December 2017 at 8:25 am

                Snap 🙂

              • Draco T Bastard …
                6 December 2017 at 9:27 am

                We dont want young minds to become addicted to money as you apparrently have become now.

                It’s not that the young minds are becoming addicted to money but are becoming addicted to gambling so as to make a profit for some far off shareholders.

            • Sanctuary 2.1.1.2.1.3
              6 December 2017 at 8:51 am

              BM, Because you are supremely ignorant, I will explain. Games like Battlefront 2 are FULL PRICE retail offerings. Battlefront 2 retails for around $85-130 for the game depending on retailer and platform. To my mind, to have ANY sort of micro-transaction for an in-game enhancement that you can’t grind or to have any component of P2W in a game that you’ve paid full retail price for is outrageous. That these loot boxes also incorporate the most highly addictive aspects of gambling, and are aimed at children, borders on the criminal.

              Now other games – notably the online free to play MMOs like DOTA, WoW, Eve Online or every dad’s favourite World of Tanks – make their money by in-game micro transactions. You download the game, and buy enhancements like fancy skins, camo schemes or premium items. But even these games have to walk a very fine line between micro-transactions and P2W. World of Tanks for example has introduced significant P2W elements this year and it’s US player base in particular has collapsed partially as a result of this.

              Got it? Good. Now fuck off.

              • Draco T Bastard …
                6 December 2017 at 9:28 am

                That these loot boxes also incorporate the most highly addictive aspects of gambling, and are aimed at children, borders on the criminal.

                They do seem to be breaking our laws which would mean that it’s actually criminal.

              • the pigman …
                7 December 2017 at 12:39 am

                BM is certainly out of his depth but his kinder surprise analogy is not totally irrelevant.

                As someone who plays a heap of games reliant on RNG (random number generator) microtransactions — Guild Wars 2, Battlefield 1, Overwatch — and a wife who works in the gaming industry selling products with RNG microtransactions, it’s true to say you get a toy with the paid content, even if it is not the toy you want.

                The redeeming quality is that (though I’m not up on Battlefront 2) this content is all available freely, just with a much greater time and effort investment, and generally speaking, it doesn’t make the game easier and is merely cosmetic. There is a sense of effort/reward, so I never pay for anything.

                With that said, there are of course people with psychological vulnerabilities (either because they compulsively need to collect EVERYTHING in the game — the developers call these customers “whales” because they eat everything) or because they’re gambling addicts who like flashy lights and sounds and the thrill.

                I’m not sure we have the answers on how to protect them while maintaining the viability of the video gaming industry.

            • Draco T Bastard 2.1.1.2.1.4
              6 December 2017 at 9:24 am

              WTF did that come from?

              All we’re saying is that they need to work within our gambling laws. Not hard is it?

        • Draco T Bastard 2.1.1.3
          6 December 2017 at 9:22 am

          There’s a difference between buying what you want and buying a chance to get what you want. The latter is gambling and it’s against the law to sell it to people under age.

        • mpledger 2.1.1.4
          6 December 2017 at 10:51 am

          Additional features or add-ons are ok especially if the game was free to start with – and I usually buy *one* extra feature if I like the game. But this was a particular game that had the sticker price of most top of the range games and then it was necessary for people to spend even more money to be competitive.

          I play a few strategy games and it does become apparent that at the higher levels they purposefully make it so hard that it’s almost impossible to get any further without shelling out for special abilities. And when you’re in the moment it can become an impulsive descision rather than a rational one.

          My feeling is that any game that needs a credit card to buy in-game purchases should be rates as r-13 or r-16

          • mpledger 2.1.1.4.1
            6 December 2017 at 11:41 am

            I guess the other thing is that most r-13/r-16 game restrictions are pretty much never enforced anyway so that’s kinda moot.

    • Incognito 2.2
      6 December 2017 at 7:42 am

      I prefer fortune cookies because then at least I know what I’m getting …

    • One Anonymous Bloke 2.3
      6 December 2017 at 7:46 am

      Apart from the flashing lights and music, that is.

    • Gareth 2.4
      6 December 2017 at 8:59 am

      Given that Battlefront is the example, it’s more like buying a Lego kit at full price and then discovering that inside is a surprise bag that you have to pay more money to open. The surprise bag may make your Lego kit even better, or it may be a “meh” surprise that doesn’t add anything to your already purchased Lego kit. it’s a gamble….

    • Draco T Bastard 2.5
      6 December 2017 at 9:19 am

      Both of which should also come under the gambling laws and the kinder surprise probably needs to come some anti-sugar laws.

      Just because something is done now doesn’t mean that it should be allowed to continue or be expanded upon.

    • Tricledrown 2.6
      6 December 2017 at 9:53 am

      Hollow argument BM.
      Everybody knows you get a toy with your sugar transfat load.
      Marketing to kids with addictive substances.

  3. One Anonymous Bloke 3
    6 December 2017 at 7:11 am

    I suppose the difference according to the DoIA is that an Instant Kiwi scratch card can be worthless, whereas a ‘loot box’ always contains something of ‘value’.

    They don’t seem to have considered the Belgian view – the combination of money and addiction – at all.

  4. Sanctuary 4
    6 December 2017 at 7:58 am

    The Jimquisition sums it up…

  5. savenz 5
    6 December 2017 at 8:10 am

    Many applications are free to download and in-app purchases (upgrades) designed for adults are are OK, as developers have to make a living.

    I also don’t have an issue for kids learning products that are free to download but to upgrade to more advanced level with an in-app purchase.

    But in-app purchases like loot boxes for children is a whole different thing – they are designed to be psychologically addictive and hook kids into what is effectively gambling.

    Let’s not allow loot boxes in apps designed for kids – we don’t want a generation of gambling addicted kids.

    The pokies for convention centre deal under National is a moral step too far already for Kiwis – having the addicted pokies clientele subsidise Skycity for the build in a special deal by the National government. (Aside from the moral issue the business case for Skycity is a failure as they ended up building the convention centre 500 seats too small to even hold the conventions they said they would to get the numbers in their business case).

    Addicting kids to make money for developers is not ok.

  6. Stephen Doyle 6
    6 December 2017 at 8:55 am

    As someone who has suffered from a family member being addicted to the pokies, I find this appalling.
    The deliberate targeting of those, mainly children, who may have a predisposition to the gambling gene is abhorrent.
    If I was king of the world, there would be NO promotion of any type of gambling, including the TAB.

  7. Gareth 7
    6 December 2017 at 9:05 am

    Apps and games need some scrutiny around this area. I think there’s a range of things developers have done to their games, some of which are definitely gambling, some of which are sorta, kinda and others that aren’t gambling but are a kind of grooming equivalent.

    Case in point, Jetpack Joyride is very big at my kid’s school. Even when in-app purchases are disabled, you collect ‘spin tokens’ while playing the game and at the end of the life you spend them on a simulated slot machine and gamble for possible rewards in-game. No money required, but lets get those primary school kids used to playing the pokies eh?

  8. Draco T Bastard 8
    6 December 2017 at 9:12 am

    I’m a gamer. Have been so for more than 40 years. Thankfully I’ve never been addicted to them even if i have played a few to excess.

    Within the last 20 years, though, I’ve done a lot of reading into psychology (I self-diagnosed with autism before I went and got an official diagnosis) and some of that reading was into the psychology of addiction and how it was used by the gaming industry to get people to play their games. It’s quite amazing, and disturbing, just how addictive a simple random result is and simple random results are so easy to generate in a computer game as it doesn’t actually produce/deliver anything.

    There needs to be limits on this type of psychological abuse so that it doesn’t damage people and society. I don’t know what those limits should be (obvious to start where our laws already are though) but this type of thing is obviously way beyond those limits.

  9. Roflcopter 9
    6 December 2017 at 9:34 am

    This issue isn’t so much about the existence and randomness of loot box rewards, it’s the way they are implemented.

    In most games, the loot box is designed as a “nice to have” where you have a chance to get an item quicker than you could attain via normal game play, or a chance at a vanity item that has no effect on the quality of your character.

    Even loot boxes that have a chance of dropping an item you need to progress, these style of boxes have always been able to be attained through normal game play and in-game currency… no real money required.

    EA overstepped the line on this one, where progression of a character is literally halted unless you buy a loot box with real money, and hope like hell you are lucky enough to get an item that enables you to progress.

    EA are getting roasted, and deservedly so.

    • Bill 9.1
      6 December 2017 at 11:16 am

      Thank you for throwing out an explanation that get’s to the root of it.

      …progression of a character is literally halted unless you buy a loot box with real money, and hope like hell you are lucky enough to get an item that enables you to progress.

      So EA are basically scamming people.

      • weka 9.1.1
        6 December 2017 at 12:13 pm

        That too, but also they’re using structures that are essentially gambling and designed to get people hooked.

        • Bill 9.1.1.1
          6 December 2017 at 12:25 pm

          The games are fundamentally highly addictive.

          Now I fucking detest gambling and what it can do to people, but…

          Throwing a “lucky bag” component into a game strikes me as being neither here nor there in the scheme of things.

          Charging “in game” credit for advantage or gaming aid? Meh.
          Charging real money for advantage or gaming aid? Meh.

          Charging “in game” credit or real money for a punt on gaining an advantage or gaming aid? Meh.

          Rendering the game unplayable without extra payments? See, that’s bullshit.

          • Gareth 9.1.1.1.1
            6 December 2017 at 7:59 pm

            It’s also not true. The Star Cards could all be crafted without loot boxes. It just took many many many hours to find the crafting parts to do so, OR you could spend money for loot boxes which had random things in them including Star Cards, including the most powerful ones.

            So do you spend 80 hrs of active gameplay to get an Epic Star Card, or do you buy a bunch of loot boxes hoping to get one?

            So your reaction to the EA loot box controversy falls into your Meh category.

            Most people’s reaction to being told to pay $100 – $120 (Std vs Deluxe) for a game and then that they’ll have to play the same parts of the game over and over for a huge number of hours to be any good, or they can pay lots more to sidestep all of that time…. is not a happy one.

    • Matthew Whitehead 9.2
      6 December 2017 at 5:03 pm

      Yep, I would agree EA went too far.

      It’s also worrying that we’re getting regulation to ban this practice that could, for instance, rule out microtransactions that are actually reasonable and fair.

      For a counter-example, Guild Wars 2 offers packs of dyes to players for real-money transactions. (or for gems, which are mostly but not exclusively obtained through RMTs) These dye packs use the exact same mechanics as a loot box: They offer randomized items, through a package deal where you don’t know exactly what you’re getting, and they cost real money. But there is no analogy to gambling because there’s no huge difference between payoff and not buying: you unlock a few additional cosmetic colours for ingame items, when you probably already have dozens easily without ever spending money in-game. But a half-cocked “loot box ban” might capture mechanics like this, in fact even a good one would struggle to allow perfectly benign models like this that allow buy-to-play and free-to-play online games to maintain a reasonable business model without subscription fees. Instead gamers with money to spare who want to support the developers can get mild bonuses that don’t actually enhance their power: They can buy extra charater slots, bag slots, dyes, or simply buy gems to trade for items that other players are selling so they can buy those same benefits.

      I’m not convinced there is yet a need to regulate the market, even though EA is notoriously evil, as they demonstrably haven’t yet gotten away with it. If someone else starts pulling this crap, then I will concede we need to consider it, but I’m very wary of elected officials being able to sensibly regulate this topic when Gareth is the only competent IT spokesperson in the entire Parliament as far as I can tell.

      I think there is a real need to regulate digital gambling of all sorts, but again, I despair at the idea of current IT spokespeople getting their fingers on the issue.

      • Draco T Bastard 9.2.1
        6 December 2017 at 6:11 pm

        bad regulation is better than no regulation. After all – it can be fixed as more becomes known. No regulation simply leaves immoral practice in place and the businesses, with lobbyists in place, will simply keep saying that things are working now and so they don’t need regulation which is a simple and easily understood position that many fall for (EDIT: Which is BMs position BTW).

      • Gareth 9.2.2
        6 December 2017 at 8:27 pm

        This all goes back to the idea of “when is a game finished and how much does it cost?”

        If a game is released, and you pay $100 for it, should you get a finished product like a book? Should a developer put further work into an already published game? If they do, what should they charge for it?

        With Early Access or Kickstarters, you can pay a single amount of money and get any further content for free because you’ve “invested” in the game and helped the developer get the funds needed to complete the work.

        With DLC the additional content is charged on top of the initial fee and you can judge whether that content is worth the price. This is commonly used to create many different price points for a single product with varying levels of content. Your standard edition with the least amount of content, your deluxe edition with bonus content, your “Season Pass” which charges one price for all future additional content, and your individual DLC releases, each one adding different sections of content. You could argue that a “Season Pass” is a form of gambling since at least two games to my knowledge offered a season pass and then failed to release any DLCs that they could access. The common theme with DLC is that the base game is playable and enjoyable without needing the DLC. This doesn’t seem to be the case so much with the last type of charging.

        With micro-transactions you get another group of content which ranges from content no-one would miss, through to content which makes game-play easier and more rewarding. In the extreme, they can focus on this additional content to the point of the base game being NOT FUN since the additional content is required to make it fun.

        Micro-transactions seem to be more vulnerable to the gambling problem since developers make more money if they randomise the goods they are selling. Micro-transactions (and especially randomised ones) are a great way for developers to charge money for things that no-one would reasonably pay for otherwise and that are cheap to produce. If you spend a dollar to get a mystery bag and it contains a hat which is the same as the one you already had in every respect except that it’s blue, you don’t tend to ask for your money back because you’ve accepted that you had a CHANCE of getting that cool glowing sword you’ve always wanted. If they get the balance of cool stuff to rubbish right, then maybe you’ll spend another dollar. In the meantime the developer spent 10 mins adding different coloured versions of common items and can get much more money for that work than they can for actually developing the base game in the first place. Hence you end up with developers producing “just good enough” games which are platforms for selling you a few good things and a lot of crappy things because that can make them more money than the game alone ever could.

        • Matthew Whitehead 9.2.2.1
          7 December 2017 at 11:44 am

          The thing is, it’s not the randomization alone that makes it gambling. It is:

          Real-money investment (investment)
          PLUS
          Randomized reward (chance)
          PLUS
          Large potential for reward utility (potential payoff)

          My fear is that if we regulate this now, we’ll only hit two of those three factors in capturing the regulation. Microtransactions for non “pay to win” items aren’t gambling, even if they award randomized items. While I agree colour tinting may seem like a lazy thing to pay for, it’s actually a far more benign use of microtransactions than giving people new equipment or skills in an online game, for instance.

          We shouldn’t be banning MTs for things like in-game currency, cosmetic rewards, or non-random rewards.

          I also think there needs to be a lot more leeway for microtransactions in games you don’t pay a fee to access but are plainly online worlds, or genuinely free to play compared to games that you actually did buy and only have an online multiplayer component, or use matchmaking or similar bite-sized online presence rather than being always-online.

  10. One Two 10
    6 December 2017 at 11:15 am

    Violence, gambling, addiction

  11. mpledger 11
    6 December 2017 at 11:57 am

    IA quote
    While the exact contents of a loot box may be unknown at time of purchase, the payment of the charge does purchase a box. This does not appear to meet the definition of gambling.

    I think their point is that if you get something of value then it doesn’t count as gambling.

    But that’s too easy a thing to get around. I could make a gambling game where someone gets a sweet every time they don’t get a bigger prize. But gambling addicted people aren’t going to eat the sweets after the first one or two (or three or four), they are just going to leave them/take them home maybe/give them away/throw them away. The thing of value that they got increasingly becomes of no value to them.

    And that I presume is the same with the loot boxes. People aren’t after the things that give very little competitive advantage once they have got twenty or thirty of them – they are after the big ticket items.

  12. Rosemary McDonald 12
    6 December 2017 at 12:36 pm

    Excuse me, and I get that this ‘loot box’ thing is an actual thing, but is it the most important thing for the Green Party to be highlighting at this present point in time?

    You guys campaigned (and scored my votes) on the issue of poverty…

    https://www.stuff.co.nz/waikato-times/news/99027132/growing-demand-for-food-parcels-shows-poverty-is-on-the-rise-salvation-army-says

    Gaming is a voluntary activity, a time filler, a hobby.

    Having decent food to eat and a healthy home in which to eat it are not.

    Get back on track Gareth.

    • solkta 12.1
      6 December 2017 at 3:09 pm

      You would be waiting a long time before Gareth blogs about poverty as it is not and never has been one of his portfolio areas. There is though a very clear and definite link between gambling and poverty. Lots of kids go hungry because a parent has spent too much on the pokies.

      Children may choose to play these games but that does not mean that they or their parents are aware of the long term harm that it could be doing.

    • Draco T Bastard 12.3
      6 December 2017 at 6:13 pm

      It is possible for a political party to do more than one thing at a time and there are definite connections between gambling and poverty.

  13. Chris 13
    6 December 2017 at 12:58 pm

    Personally think the gambling is a bit of a stretch

    Have to say though. It’s a bit arseholey to make people pay more to get through levels after they have forked out a shedload to actually buy the game.

    We aren’t talking some Angry Birds crap where you get it for free or a couple of bucks to start with knowing you can probably spend a few bucks more

  14. Brigid 14
    6 December 2017 at 2:41 pm

    But having paid more, it’s a gamble on whether or not you actually do gain anything that allows you to continue on with the game.

  15. NZJester 15
    7 December 2017 at 7:06 am

    The other thing about these kinds of loot boxes is the secondary black market trading in a lot of these in-game items. I have been in games with people offering to sell hard to obtain items or in-game currency for real cash. These type of things attract the Gold Farmers in droves who cram people into small cubicles on computers to have them farm these items to sell for real cash. They are normally in sweetshop style conditions forced to work long hours for little pay with few breaks. You also hear horror stories about people who have agreed to buy these items only to have more than the agreed amount taken from their credit cards and a lot of the time receiving nothing in return or getting there accounts hijacked and stripped of valuable assets or the account sold to someone else. That normally happens when they get people to sign into a trading website setting up a username and password and stupid people or kids who do not know better use the same password as the one for their game account.