Loot boxes could potentially be classed as gambling following calls for a review from UK Government ministers.
The Department for Digital, Culture, Media and Sport (DCMS) says it will begin an investigation into the increasingly common mechanic found in video games.
Concerns around loot boxes have increased following reports that suggest they encourage gambling-style behaviour among children; potentially leading them into addiction or problem gambling in later life.
Popular titles such as EA Sports’ FIFA allow users to purchase packs containing in-game rewards using real currency, with a random chance of what they may receive.
The random chance element some say is a form of gambling, and children are particularly vulnerable as they may not understand the implications.
Although they contain a certain degree of chance, loot boxes are currently not covered by gambling regulations, meaning they are becoming more and more coming in popular titles.
In September 2019, the DCMS proposed that loot boxes be regulated by the UK Government under the Gambling Act.
Gambling legislation in the UK excludes loot boxes because they do not meet regulatory definitions which “fail to reflect people’s real-world experiences” of spending in games.
Damian Collins, working as DCMS Committee chair at the time, said: “Social media platforms and online games makers are locked in a relentless battle to capture ever more of people’s attention, time and money.
“Their business models are built on this, but it’s time for them to be more responsible in dealing with the harms these technologies can cause for some users.
“Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm.
“Buying a loot box is playing a game of chance and it is high time that gambling laws caught up.”
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Loot box systems are incredibly lucrative for the gaming industry, with data suggesting that they earn companies £23 billion per year in after-purchase sales.
However, in April this year companies took a hit when the Pan European Game Information (PEGI) imposed new rules forcing companies to notify gamers in the UK if a title contains loot boxes or other types of premium add-ons.
In a statement at the time, PEGI said: “Video game publishers will start to provide additional information about the nature of in-game purchases if these include random items (like loot boxes or card packs).
“A text box will now be added to provide the additional information if the game features paid random items.”