The Origin of Loot Boxes and why They are a Form of Gambling

With more AAA games being released with loot boxes in them, the discussion has been shifting towards legislation around their use and implementation. The ESRB came forth stating that they don't feel that loot boxes are a form of a gambling. I personally disagree with that, and to discuss it, we need to look at the foundation of their design.

orcs must die unchained

Randomized Progression:

Loot boxes/gacha design are of course built on the idea of randomized progression. You have the chance of getting something common, rare, or anything in-between.

The use of randomized progression started in the RPG genre and was popularized by ARPGs. What makes them so attractive is the fact that the player never knows what's going to drop next. Since the loot is randomized, it creates a haphazard progression curve as the player finds gear of varying qualities.

The important point is that loot drops are dependent on the player's skill at the game. If the player can't beat elite enemies or complete quests, they are not going to get rewarded. Let's move on and talk about loot boxes, and where things take a turn.

Loot Box Design:

Loot boxes have the same principle of rewarding a player, but their implementation is different. For games that reward loot boxes, it's about the time spent playing (or money spent), not the actual skill that determines drops. With randomized progression, the player is still making some progress as the loot tables scale up; not here.

Diablo 3

Due to the rarity system, higher tiered items are always scaled higher, and encounters are balanced around that.

It doesn't matter how good you are at the game if you're not getting lucky with the drops. As time goes on, your chance to see any progression lessens.

This is also why claims that because loot boxes still drop something that they are acceptable don't work. The end game of loot box design is when the player has no way of making progress unless they get better goods.

Anything that isn't at the quality level they're looking for is trash. We can take this a step further in games that require you to upgrade your options; requiring you to pull duplicates in order to keep them viable.

Even though loot box-based games have a milling system, or where players can recycle duplicate or useless items, the cost is still astronomical. If someone is at the point where they can only use the highest rarity items to progress, there is no way a milling system is going to get that for them in the foreseeable future.

And of course playing the game comes to a standstill, as the player is not able to progress in any area. When that happens, the player must either get really lucky with drops, or start spending a lot of money.

With all that said, I want to turn to a major point when it comes to arguing about gambling.

The Skill Debate:

Gambling by definition is about playing a game of chance, as in something where the participant does not have real control over the outcome.

If I'm playing poker or slots, or even betting on any sporting match, I as the gambler have no impact on the results. During the heights of probation in the US, the pinball industry was targeted by claims that it was just gambling.

Idle Heroes (Youtube)

In order to disprove that, designers had to show that there was real skill involved playing pinball, and there was and still is. Anyone who has watched grandmaster plays of a machine knows that you can manipulate the ball with skill.

When it comes to loot box design, another common defense is that the games that they are a part of require skill to play. The problem with that statement is that the act of using loot boxes does not contain any part of skill. In this situation, I as the player have no way to impact the use or quality of the loot box by playing the game.

This was a major part of the complaint when Payday 2 introduced the microtransactions for droppable safes. It didn't matter how good you were at playing the game, because the safes could only be opened by spending money.

Just the act of loot boxes themselves, regardless of being cosmetic or gameplay, is still considered gambling. The player is spending money on an unknown choice without any way to control it.

Valueless Value:

We could segue way into talking about what loot boxes mean for game development and profit, but that would take us off-topic.

Randomized progression is a powerful motivator to keep someone invested in a game, and things have taken a dark turn with the acceptance of loot boxes. By their nature, loot box design features similar pulls that have caused gambling addiction.

To see $60 games trying to integrate loot boxes into their reward and progression structure is not something I want. I said this in the video above, but I'll say it again here: Loot boxes do not provide value to the consumer. They are a tactic designed around manipulating consumers to spend money on the hope of getting something of value.

You can try spinning it all you like, but it is a dangerous precedent to see titles like Shadows of War and Battlefront 2 messing with loot boxes. If a game can't be profitable without using loot boxes, then it was never going to be profitable to begin with.