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April 30, 2021

Multiple lawsuits files in relation to video game loot boxes

Slater Vecchio LLP has recently filed four separate class actions against numerous major video game developers for their implementation of “loot box mechanics” in their games.  The named defendants in these actions include, but aren’t limited to, Electronic Arts, Activision, Niantic, and Scopely.

Loot Boxes are a video game mechanism that rewards players for spending extra money in game, on top of the price of the game itself. The process begins when an individual spends real money on a Loot Box. This loot box will then reward the user with an assortment of random items, some of which may be beneficial to in game progression. The function of loot boxes operate very similarly to slot machines, which leads to users getting addicted into buying more loot boxes. The awarding of game items that are beneficial to in game progress also instills the idea that buying loot boxes is necessary to get an in game edge. The majority of games that have these Loot Boxes – FIFA, Madden, NHL, etc. – are rated as “E for Everyone”; therefore, these games could invite gambling tendencies in minors. For younger users, who haven’t reached the age yet where they cannot properly understand probabilities or the value of money, the grip of having an edge over your friends or competitors can be very strong. Especially given the psychological techniques these games also employ.

Loot boxes from the video game, Overwatch

The video game industry is not regulated to the same degree that casinos and online gambling websites are; yet they are encouraging the same behavior and to a younger demographic. Gambling is regulated for a very good reason. If this can be construed as gambling, should the government step in to regulate? Studies have shown a strong statistical relationship between loot box engagement and problem gambling. Loot boxes use a “psychological nudge” to push individuals to spend real money on them. Along with this psychological motivation, it is believed that these games employ a wide range of psychological pricing tactics to get users to spend money on the chance of in game items. This combination of minors, the potential for in game progression, and gambling, can be a dangerous one, and has even led to some minors to spending their parent’s savings.

At the end of the day, who truly wins with the implementation of loot boxes? The developers who have created a multi-billion dollar industry, or the consumer?  When questioned about the connection, video games developers deny that their loot boxes are indeed gambling, and instead compare them to items such as Kinder Surprises. However, the world has yet to see an individual spend their entire savings on Kinder Surprises.

Author - Slater Vecchio

Slater Vecchio LLP is a boutique law firm located in British Columbia. Over the past 20 years, Slater Vecchio has represented thousands of clients and has grown into one of the largest personal injury and class action firms in the province.