Videogames – what’s in the box?

The battle continues. After stirring controversy and regulatory attention worldwide, EA recently withdrew “lootboxes” from its video game Star Wars: Battlefront 2. What are lootboxes anyway and why they may be unlicensed gambling activity? In-game sales of digital content are lucrative (Candy Crush Soda made $120m last year) and, generally, not controversial. But “lootboxes” work like sealed packs of collectible cards: the user buys a box for a few dollars without knowing its exact digital content (additional “lives” etc). If lucky, the box will contain valuable items that she can trade in the game or, crucially, in marketplaces outside the game (yes, they do exist) for fiat currency. Many players do not bother but “whales” may spent thousands compulsively or in pursuit of profits. The powerful psychology behind “unboxing” is for another discussion. What got the attention of regulators is their elements of chance and payoff. Unsurprisingly given their game revenues, US/UK regulators initially responded that lootboxes are not gambling. But Belgium/Netherlands announced last week investigations into whether games (such as FIFA 18) engage in unlicensed gambling. This could be, ahem, game-changing and result in a general EU ban. Let’s see what’s in the box for them!