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Video games containing paid loot boxes will be classified ‘M’ from September, as the Australian Government seeks to address concerns about the links between in-game purchases and gambling harm.
The new Mature classification – not recommended for children under 15 years old – will apply to games with paid loot boxes, while R18+ will apply to video games that contain simulated gambling.
A ‘loot box’ is a digital container of randomised rewards available in some video games, which can often be purchased for real world money.
Dr Aaron Drummond from the University of Tasmania says: the problem with loot boxes is that many resemble “very closely conventional forms of gambling”. For example: transactions involve money; there are chance based outcomes; some players win while others lose; and opting out is required to avoid losses.
His research shows that in about a quarter of games, players can even “cash out” their winnings, through a legitimate or third party marketplace.
The new mandatory classifications mean that video games containing paid loot boxes or simulated gambling will come with a warning label on the box.
According to updated government guidelines, simulated gambling involves interactive activity resembling a real world age restricted betting or gambling service.
In a statement, communications minister Michelle Rowland says the changes are designed “to protect vulnerable Australians from gambling harms – including children who may be exposed to gambling through video games,”.
“Research shows that children exposed to gambling-like content may be more vulnerable to gambling harm later in life – and we are determined to intervene early to keep children safe,” she says.
However Drummond’s research into current classification and warning labels in place in the US and Europe suggest consumers do not understand those warnings, and that the labels “fail to generate a perception of harm”.
Associate Professor Jim Sauer, from the University of Tasmania has collaborated with Drummond on research into loot boxes.
Sauer says it was video game players who initially raised concerns about the gambling-like reward mechanism in games.
As a cognitive psychologist, Sauer says the core psychological mechanism underpinning loot boxes is something called ‘variable ratio reinforcement’, a technique which is also used in conventional gambling.
By offering rewards on a randomised schedule, loot boxes reframe a loss in the mind of the player as instead ‘a step closer to a win’, which reinforces repeat behaviour, he says.
According to Drummond, research consistently shows that people with problem gambling symptoms are much more likely to spend more on loot boxes than average. Some evidence even suggests “by engaging with loot boxes, people might be more likely to migrate into conventional gambling activities,” he says.
Research by the Australian Institute of Family Studies finds young people who engage in simulated gambling games are 40% more likely to spend real money on gambling as adults.
This week Cosmos podcast ‘Debunks’ reboots with a new season on the science of screens. In the first episode, Drummond, Sauer and UNSW Associate Professor Michael Kasumovic join host Jacinta Bowler to answer the question – does violence in video games lead to real world aggression?
