In a 2019 video YouTube’s most popular personality, MrBeast, gave almost $US10,000 to a live streamer simply for playing RAID: Shadow Legends. It was not declared as advertising, but MrBeast was one of over 2000 “creators” to promote the video game as part of a marketing campaign by PR company HypeFactory.
RAID: Shadow Legends is one of a genre of games that features a type of gambling-like content called ‘loot boxes’. Loot boxes are items earned or purchased within video games that are “opened” to reveal a randomised reward – a virtual version of a lucky dip.
The rewards vary between games but range from cosmetic items to in-game advantages.
Some of these games have become popular among young people due to influencer-led marketing campaigns. Others have found that audience by being built on blockbuster Hollywood franchises such as Star Wars and Marvel.
Concerns around the potential harm of offering loot boxes to young people has prompted the Australian Government to introduce new restrictions on games featuring “gambling-like content”, which will take effect from September 2024.
RAID: Shadow Legends is owned by a subsidiary of Aristocrat Leisure, Australia’s largest manufacturer of poker machines. An Aristocrat spokesperson told Cosmos: “RAID: Shadow Legends is not made to appeal to, or be played by, young children.”
Under the new legislation games featuring in-game purchases linked to elements of chance – like loot boxes – will get a minimum classification of ‘M’, or mature, meaning they are not recommended for children under 15.
But Carol Bennett, the CEO of the Alliance for Gambling Reform, wants an R18+ classification on these games.
“We are effectively enabling underage kids to gamble at a very early age,” Bennett says.
Bennett argues the new classification downplays “the degree to which this is a serious and harmful product,” characterising it as part of the “widespread normalisation and exposure” of gambling culture directed at young people in Australia.
Aristocrat’s spokesperson says that RAID: Shadow Legends is not a gambling game, “It offers players no opportunity to win money, or anything else of real-world value, and is played purely for entertainment.
“Equally, loot boxes are not gambling, as the virtual items obtained are strictly for in-game use, and cannot be exchanged for money or anything of real-world value.”
Most paid loot boxes satisfy the criteria to be considered gambling, says Dr Aaron Drummond, a senior lecturer in psychology at the University of Tasmania. These are payment, an element of chance, and a potential prize.
Children’s exposure to loot boxes when playing video games has been nearly ubiquitous. A 2020 study, supported by the New South Wales Government’s responsible gambling fund, found that 92.7% of respondents aged between 12 and 17 had played a video game that featured loot boxes in the past 12 months.
Of that group, 32% had purchased a loot box, with a median monthly spend of $50. This was part of a growing body of research that prompted calls for restrictions on video games containing loot boxes.
While there is evidence of an association between loot box purchasing and higher gambling frequency, expenditure, session length, positive attitudes towards gambling, and future intentions to gamble with money, there is contention around whether there is a causal link. That is, do loot boxes cause these behaviours, or do people with these behaviours engage more with loot boxes?
Some initial studies have shown people who use loot boxes might migrate into conventional gambling at higher rates, but there isn’t evidence to what degree loot boxes are causing that migration, says Drummond.
The upcoming minimum classifications will give parents more information to make informed decisions, he says.
“The best defence is going to be a well-informed consumer base who can actually spot these things and understand what they are, and then make informed decisions about whether it’s going to be appropriate for them and their kids”.
Loot box games use psychological techniques similar to gambling. Drummond says they use “variable ratio reinforcement schedules”, wherein players are rewarded only occasionally for their spending, making it much more likely for players to spend in the future. Players think, “next time could be the one that’s a big one”, as people do with conventional gambling.
Questioned on criticisms of the looming reforms for not imposing an R18+ classification, a spokesperson for the Minister for Communications, Michelle Rowland MP, said: “While the M classification is advisory and places no legal restriction on the sale of these games, this classification sends a strong warning to parents about the potential risks associated with games with these features.”
The spokesperson said the mandatory minimum classifications are one of the ways the government is “responding to growing community concern about the potential harms of children accessing gambling-like content in computer games”.
For children, there is also peer pressure to access loot boxes. Many multiplayer games feature cosmetic rewards from loot boxes like “skins”, which change their character’s appearance. Drummond says if children don’t have the latest features they can be bullied.
Craig Velaris is a Victorian-based YouTuber who plays and makes videos about a subset of loot box games called “Hero Collector RPGs”. These involve collecting a large array of characters and making them more powerful with equipment or tokens earned from loot boxes.
Velaris, who has played these games for more than six years, says when his favourite superhero, Gambit, was introduced to Marvel Strike Force he spent about $700 to level the superhero to its maximum seven stars. He points out this is the cost for just one character and the game releases around three characters a month.
The games are designed to encourage players to spend, Velaris says. “The minute you log in with most mobile games, you get bombarded with different offers to spend and get some ‘amazing’ deals.
“You’ll also hit bottlenecks, where you run out of a certain resource and thus you will be led into the shop.”
People who spend big in loot box games are often considered rich gamers with lots of money who can afford to gamble. But research shows that problem gamblers and people with a risk of gambling problems are the ones who spend the most in these games, irrespective of their income bracket, says Drummond.
Loot boxes are part of a broader issue in Australian society around gambling, Bennett says: “[It] needs to be addressed and tackled now, before we end up with an even more serious problem.
“This is a serious and harmful product that can actually cause some serious issues for young people, and particularly as they get older and they’re exposed to real-life gambling products.”
The government recently closed consultation on the second stage of reforms to Australia’s national classification scheme. While it did not specifically seek feedback on how to address gambling-like content in computer games, Rowland’s spokesperson says the government is monitoring developments in research and international regulation and the applicability to the Australian context.
Govt introduces loot box legislation
This story is co-published with The Citizen, a publication of the Centre for Advancing Journalism at the University of Melbourne.
