Taking a Gamble

Analyzing how the Regulation of Loot Boxes in Video Games May Change a Billion Dollar Industry

With recent advancements in technology and a consistent increase in online dependence, the video game industry has hit record highs in profit and popularity. Due to this increased popularity, video game producers have begun to dramatically supplement their revenue through microtransactions. Microtransactions are in-game purchases that allow players to acquire downloadable content regularly released throughout the lifetime of a game. Loot box systems are a popular form of microtransaction that allow players to receive a random in-game item. Such systems, however, are becoming increasingly controversial as parents, players, and legislators have begun to liken their use of flashy lights, positive sound effects, and inherent random results to an illegal form of gambling. In response to these concerns, and a growing body of research finding potential connections between the use of loot box systems and problematic gambling behaviors, countries around the world have proposed or enacted laws to restrict their implementation. This Note examines various regulatory tools in an attempt to determine the appropriate course of action for legislators and industry leaders when regulating loot box systems. This Note argues that loot boxes should not be deemed an illegal form of gambling, but rather should be regulated to promote transactional transparency through the restriction of content offered in loot boxes and the prohibition of systems being accessed by young players. Such regulations will better protect both consumers making in-game purchases and the financial interests of producers.

The full text of this Note is available to download as a PDF.