Last week, MPs called on the government to classify online loot boxes as gambling and in the process highlighted a scandal: the $137.9bn (£110bn) gaming industry makes much of its profit by ripping off children. Young people are being nudged, enticed and coerced not only to carry on playing but also paying.
Loot boxes – mystery objects in virtual treasure chests that players pay to open – resemble nothing so much as a lottery. Gamers spent $30bn on them worldwide in 2018, a figure that has been predicted to rise to $50bn in the next five years.
Countries such as Belgium, the Netherlands and China have already either classified loot boxes as gambling or moved to restrict them. Several academic studies have found an overlap between loot boxes and problem gambling. The digital, culture, media and sport committee was right to urge the government to take precautions, certainly until more is understood about the relationship between this aspect of gaming and gambling.
Loot boxes, though, are simply the most egregious example of a pernicious business model that is exploiting most of Britain’s children. Recent research from Parent Zone found that 93% of 10-to-16-year-olds in the UK regularly play computer games; for boys, it’s 97%. The Rip-Off Games, of which I was a co-author, reported that three-quarters of those children believe online video games try to make them spend as much money as possible while they are playing; almost half (49%) think online games are only fun when they do spend.
Over the past 10 years, the business model of gaming has changed. What we once called computer games were bought, complete, on a disk. The advent of cloud computing allowed for software updates downloaded in the course of play – and for getting gamers to pay for them. Modern games are no longer products you buy and use – they have become a gateway to perpetual spending opportunities.
In-game transactions and microtransactions take various forms: new playable content, currency or cosmetic alterations to the appearance of characters or weapons (known as skins). These may affect play, avoiding “grind” (seasoned gamers sometimes talk disparagingly of “pay to win”).
Sophisticated behaviour-manipulation techniques borrowed from the gambling industry and elsewhere on the internet are deployed to incentivise spending. These include the use of in-game currency to make transactions impenetrable; loss-aversion (people are more likely to spend money if they are only one or two steps away from winning); reward-removal, where players are given a reward and threatened with its being taken away; “fun pain”, where a pop-up, say, offers a way out of a painful situation; and time-limited offers, delivered at a point of high tension.
Adults also play online games, but since almost all children are gamers, the general principle that children are entitled to a greater degree of protection from exploitative commercialism ought to prevail. Parent Zone’s research found dissatisfaction among adult gamers about the way that games were released piecemeal, in need of updates, or designed to require last-minute spending to complete. Older gamers were, on the whole, less impressed by skins, often preferring to play old, classic games or to put up with grind.
Most young people we spoke to knew someone who had spent too much – in some cases, hundreds of pounds of birthday money – and these children often tended to be younger or more vulnerable. For an insecure child, a cosmetic item that represents social cachet matters that much more.
No one is suggesting that games developers and publishers should not be rewarded for their creativity and enterprise. The games industry is hugely important to the UK economy. But the current business model is unsustainable. Rumblings of dissatisfaction from older gamers have been followed by a belated and half-hearted attempt by games companies to put their house in order: in August, Nintendo, Sony and Microsoft announced that they would require publishers releasing games on their consoles to disclose the drop rate of loot boxes.
The predatory business model of gaming may ultimately be self-defeating. But, in the meantime, it presents the possibility that the most vulnerable children will be subject to the strongest inducements and dark nudges.
Gaming’s positive aspects are not in doubt: gaming is fun, exciting and social. It fosters skills and forges friendships. Currently, though, the gaming industry relies for its profits on the manipulation and exploitation of children.
• Geraldine Bedell is executive editor of Parent Zone